The City of The Dalles and Wasco County have negotiated an agreement with Google to provide the company with millions in tax breaks in exchange for a long-term investment in public services.
To qualify for a second Rural Enterprise Zone agreement, Google has to invest $200 million or more into its expanded operation and create at least 10 new jobs. In return for a tax break tied to expansion of its facilities, the company will pay a $1.2 million project fee by the end of 2013 and then $800,000 for the next 15 years after the new 164,630-square foot data storage center is completed.
“As we consider expanding in The Dalles, we have applied for a second Enterprise Zone agreement with the city and the county. We’re proud to be a part of The Dalles community and we look forward to hearing the outcome of the upcoming vote,” wrote Kate Hurowitz, a spokeswoman for Google, in a statement released Friday morning.
The city council has added the draft agreement with Google as a supplemental item on its Sept. 23 meeting agenda. The agency is seeking public comment on the proposal that has been posted online at www.city.the-dalles.or.us. The elected body convenes at 5:30 p.m. in the municipal chambers at 313 Court Street.
“The city and the county are pleased with this result of the proposed agreement,” said Nolan Young, city manager. “We appreciate Google’s awareness of some of the community issues that were identified for use of the fees.”
He said the company’s added investment into the community will not only provide direct and indirect jobs but aid in economic development. He said although some people may disagree with giving the corporation start-up tax breaks, they are necessary to compete with other communities that are pursuing Google’s business.
The search-engine giant has spent $21 billion altogether on data centers all over the world since opening its first facility in The Dalles in 2006, according to an Oregonian report released Friday morning.
On Sept. 24, the Wasco County Commission invites area residents to comment on the proposal at a special meeting that begins at 8:30 a.m. in Room 302 of the county courthouse, 511 Washington Street. The agreement has been posted online under the commission link for agendas at www.co-wasco.or.us.
“We are going to be waiting to hear what the public thinks of this draft agreement that we believe will bring significant economic benefits,” said Commissioner Scott Hege, who represented the county in negotiations with Google.
The annual fee starts after the completion of the new facility in the middle of the 37-acre Google campus, between Building 1 and Building 3, in the Port of The Dalles’ industrial park.
Google currently has five buildings, excluding guard shacks, and three of them house data center infrastructure. The other two are a cafeteria and meeting space, and a storage facility.
The initial $1.2 million fee for the second zone is proposed by the city and county to be divided as follows:
• Mid-Columbia Fire and Rescue will receive $484,464 to remodel and put Station Two in Columbia View Heights into service.
• Northern Wasco County Parks and Recreation District will be given $100,000 to use on a number of projects with community benefit.
• Wasco County gets $425,845 to pay off the remaining Discovery Center infrastructure debt. This will free up about $85,000 each year including $25,000 from the city to use for other services.
• The city wants to use $129,691 to pay off the Union Street Undercrossing debt. That will allow about $43,000 from the transient room tax that is currently allocated for this purpose to be turned over to the parks district each year, as called for in the ordinance that set up the distribution system.
• Sixty thousand per year will go to the Columbia Gorge Regional Airport to help with infrastructure improvements and expansion of facilities.
The city and county will each receive 35 percent of the $800,000 annual fee, or $280,000, and 30 percent, about $240,000, will be given to North Wasco County School District 21. That funding will be used by the district for “curb appeal” projects and help transitioning with the high school’s state-mandated change of mascot.
The county has not yet identified how it would spend its annual share of funds but the city has included a break-down of how that money is proposed to be distributed in its Sept. 23 meeting packet.
The city would like to retain $115,000 to cover operational costs or street needs. Columbia Gorge Community College is then slated to get $75,000 for workforce training, and Mid-Columbia Fire and Rescue will receive $90,000 that will be split, with $34,000 used for a student-volunteer program and $56,000 to retire a 15-year, $580,000 debt to build a new training tower at the main station.
The new deal is separate from the first Enterprise Zone, established seven years ago, that required Google to pay an initial $280,000 and $250,000 a year for 15 years, with eight more years left on that commitment. The tax abatement funds are distributed between the city, county and college and used to support veterans’ programs, workforce training and economic development programs.
In return, Google is reported to have saved at least $100 million in taxes.
To get that start-up break, the company had to invest an amount equal to or greater than “one percent of the real market value of all nonexempt taxable property in Wasco County, or $16.9 million, based on the 2004-05 Oregon Property Tax Statistics.” The company also had to employ 35 or more “full-time equivalent year-round employees” but currently reports a workforce of 80 full-time staff, a figure that rises to 150 when contractors for security, food and other services were factored in.
Since opening for business in The Dalles, Google has contributed $300,000 to area schools and various other local programs involving technology, education and green energy. The city also receives about $340,000 annually in franchise fees generated by the company’s electricity consumption.