Tuesday’s Becker City Council meeting featured a public hearing to consider the tax abatement request for the Jet Stream Data Center for Google.

 

Dozens filled city hall to listen to the terms and provide feedback or ask questions. Some who signed up to speak during the hearing turned down their chance to voice their opinion while four representatives from near and far away stood to express their support for the measures to obtain the multinational technology company.

 

The representatives were from the Greater St. Cloud Development Corporation, Elk River Chamber of Commerce, Central Minnesota Initiative Foundation, and Greater MSP.  All spoke in favor of it, saying data centers like this are highly sought after, and that it would hopefully attract other technology-based companies to the region.

 

The tax abatement request from Google is to reduce their taxes for a 20-year timeline on the 375,000 square foot data center on property currently owned by Xcel Energy.

 

Community Development Director Marie Pflipsen says it is not a 100-percent abatement because the company would still pay about $300,000 in taxes annually to the school district.

 

“When it comes to the city and the county it's not 100 percent of the property taxes either, so if you walk out to the site today you won't see much. It's a field and there are taxes coming in on that property now.  There's about $15,000 coming in every year.  Those taxes will still be paid, so it's nothing new.”

 

Pflipsen says the projected annual abatement from the city would be about $312,000, which is just about $6.2 million over the 20 years.  She says while $312,000 a year is a lot of money for Becker to give-up in tax revenue, it is what they have to do to compete in a global market.

 

The proposed data center, when fully operational, would create at least 50 new jobs with an annual average income of $80,000 a year, and have an annual payroll of over $4 million.

 

With Xcel Energy shutting down two of the three units at the coal-powered Sherco Power Plant in the next seven years, Becker city officials are working to attract new companies to town to replace the lost jobs and revenue. Last year, Becker brought in Northern Metals, which houses about 80 jobs.

 

Google’s total investment to the Becker area would be around $600,000,000 — $300 million in construction and $300 million in equipment purchases. It is estimated the project would bring in 2,300+ direct jobs during the two-year construction phase.

 

The project will bring needed road, sewer and water and fiber infrastructure to the Becker Business Park. It would also help raise the county and state’s profile as a growing data center market.

 

In other areas where Google has built a data center, other large tech companies such as Facebook and Microsoft have followed.

 

The project can serve as a catalyst to help attract other businesses, jobs and investment and will pay nearly $300,000 in school general and referendum taxes annually.

 

During the construction phase, in total, the economic activity associated with these construction expenditures in 2019 would include $223.4 million in gross domestic product (GDP, which corresponds to the size of the county economy), $169.1 million in labor income, 3,170 job-years. All of these impacts are considered in the model as temporary, one-time impacts.

 

For the state, the economic activity associated with these construction expenditures in 2019 includes $309.3 million in GDP, $226.6 million in labor income and 3,857 job-years.

 

During the operational phase, the proposed facility would include 50 new jobs in data processing, hosting and related services with pay estimated at an average of $80,000 annually. These impacts are for the first year of operations in 2020; but, assuming that the company maintains the level of activity at the data center, these operations phase estimates are expected to be ongoing into future years.  

 

In what is often called either a “ripple effect” or “multiplier effect”, increased economic activity triggers additional spending.  The total economic impact of the economic activity is the sum of three effects:  the direct effect (the change in activity that stimulates other activity, in this case construction or operations phases of the proposed data center), the indirect effect (resulting from industries purchasing from other industries due to increased demand) and induced effects (resulting from the expenditure of new household income generated by the direct and indirect effects). 

 

Besides the tax abatement request to both the city and the county, there are two other pieces to the puzzle in order to get Google to come to central Minnesota:  Xcel Energy has a petition in to the Public Utilities Commission to serve electricity to the site and they've asked for a review and vote on their proposal by the end of June.  One-hundred percent of the energy would come from wind farms in the Dakotas.

 

Also, a bill has been introduced in the state legislature for over $20 million in bonding money for wastewater infrastructure improvements to the city's industrial park.

 

Sherburne County's Economic Development Authority will hear Google's request for a tax abatement from the county Thursday, and the county commissioners will hold their public hearing this coming Tuesday.

 

The city council did not vote on the abatement request Tuesday night; they instead decided to hold it over for a vote at their next meeting April 2 to give residents more time to weigh in.