Google seeks expansion

“Although there are a lot of factors to work out before making a final decision, we’re excited about exploring the possibility of expanding our operations.”

According to information provided by the city/county negotiating team, Google expects the new data center to create about 50 more jobs. Currently, the company reports a workforce of about 150 full-time workers and contractors.

In exchange for 15 years of tax breaks, Google will make an initial payment that is estimated to be about $1.7 million to the city and county and then yearly payments of at least $1 million.

That is a 42 percent and 20 percent increase, respectively, over the fees to be paid on the data center that opened its doors in April.

Google has also agreed to provide the port with $250,000 to prepare other industrial land since it will be taking over a large percentage of the new business park on River Trail Way.

“This is a wonderful opportunity to again work with our partners and provide an incredible economic boost to this community,” said The Dalles Mayor Steve Lawrence, a member of the negotiating team.

Public Process

A public hearing on the agreement negotiated over several months by two officials from the county and two from the city takes place at 5:30 p.m., Aug. 3, on the third floor of the county courthouse, 511 Washington Street.

Next week’s meeting is being held jointly by the government entities, which must both sign off on the agreement that gives Google tax breaks for a new data center on 23 acres of River Trail Way. The Internet search giant is in the process of purchasing the land from the Port of The Dalles.

“I am pleased to see that Google is considering expanding their operations here locally,” said Scott Hege, chair of the county commission and one of the negotiators.

“A keystone of economic development is expanding your local businesses and it speaks volumes about the business climate and how a community welcomes business.

“Google has had a significant impact in the local area for a number of years. That impact is measured well beyond just the jobs directly related to their operations and I look forward to the possibility that that positive impact will grow.”

Lawrence and Hege were joined at the negotiating table with Google by: Nolan Young, city manager; Tyler Stone, county administrative officer and Scott Hege, chair of the county commission.

Young said the actual amount Google will pay each year to the city and county is to be calculated at 11.4 cents per cubic foot of the new building. The actual amount of the initial fee will be computed at 16 cents per cubic foot.

Google opened its first complex in 2006 on nearly 31 acres off Steelhead Way. The new data center was built on eight acres of the same parcel.

Under the first 15-year agreement, Google pays $250,000 each year to the city and county. The initial fee was $250,000.

The second agreement, finalized in 2013, finds the company paying $800,000 annually for 15 years, plus an initial fee of $1.2 million.

The money local governments receive per year from the two existing agreements is shared with several other public entities.

The sum total of these payments equals 6 percent of the current city general fund operating costs and 15 percent of what the city receives in property taxes, according to the benefit report provided by the city and county.

BENEFIT BREAKDOWN

Tax breaks for Google are made possible by the Enterprise Zone designations granted by the state. These zones exempt businesses from local property taxes on new investments for a specified amount of time.

State law requires that the company receiving the benefit of lower taxes provide at least 10 new jobs that pay 150 percent of the roughly $30,000 average salary of Wasco County residents.

That would make Google’s average annual salary about $45,000.

The benefit report outlines that Google provides more money under the Enterprise Zone agreements than the top taxpayer, which is Union Pacific at $532,998 per year.

“Google and other large data center companies in Oregon are locating only in enterprise zones or other areas where they can receive reduction in taxes,” states the city and county’s report.

“Because of the large personal property value of the machinery located in the data centers, it is cost prohibitive for them to do otherwise.

“Without an enterprise zone, Google would not have the three buildings they currently have in The Dalles, nor would they build the fourth building proposed under this new agreement.”

Officials have figured the average property tax amount per acre paid by businesses located in the west port industrial area, where Google’s data centers are located, is $12,447 per acre.

The average of the top five is $23,573. The highest amount paid for any development is $34,305 per acre.

For its almost 31 acres, Google pays enterprise zone fees and property taxes for land and improvements that, when totaled, equal $35,772 per acre.

REVENUE PLANS

Government leaders say the fees to be paid by Google will help both the city and county address their road and street problems without raising taxes.

The city will also recoup revenue from Google’s water and wastewater use, which the report said will help keep the bills down for individual customers.

Google is reported to be one of the largest customers of water, wastewater, broadband and electric services.

“The utility fees that they pay significantly impacts rates for the whole community. If they were not in the community purchasing at the volume they do, rates to the individual rate payer would be higher,” states the report.

The city charges a 3 percent franchise fee on gross revenue that Northern Wasco County PUD gets from all customers. Google’s fee allows the city to have more police officers on the street, according to the report.

Google is shown in newly released documentation to have contributed $1.2 million in grants to Wasco County schools and non-profits since 2011. An additional $350,000 was provided to The Dalles Public Wi-fi project.

“I would encourage those interested in seeing growth in our economy to take a look at the project and information that is available and participate in voicing your opinion,” said Hege.

“This can be done directly at the public hearing next Monday, but also easily by sending emails, letters, or talking with city councilors and county commissioners.

“We want to know the community's thoughts on the potential project. My phone number is 541.288.1616 and email is scotth@co.wasco.or.us.”