Google searched for the best location to build a new $300 million data center and found its top choice in a familiar place: Council Bluffs.
The project will bring the Internet search giant's total investment in the Bluffs to nearly $1 billion. But equally important, Iowa and Council Bluffs officials said, is that the state and city have secured a “yes” from the Mountain View, Calif., search giant for the second time, priming the western Iowa hub for future development by the high-tech company.
Tuesday, at an event hosted at the site for the new project, Google representatives already were hinting that more expansive plans were in the works, and that Council Bluffs could play a significant role in the company's future expansion.
“(This project) certainly indicates that Council Bluffs has been attractive to us so far,” said Chris Russell, the manager of Google's Council Bluffs data center. “We can't talk about future plans at this point. We just got done getting all this arranged. But, yeah, this is definitely an attractive place.”
The new data center will serve the same major functions as Google's first center: Processing emails sent through the company's Gmail client; Google Maps requests; posts and updates to the company's Google+ social network; and a growing number of Google searches from around the world.
Global demand for Google's vast digital product offerings have forced the company to expand its processing capacity and build more data centers, Russell said.
The larger, $600 million data center opened in 2009 and employs about 200 people.
So why Iowa, again?
Russell said the company settled on building in Council Bluffs again for a variety of reasons, including an available and educated workforce, land it already owned here, low energy prices and infrastructure that includes a vast network of underground fiber optic lines that pass through the Omaha-Council Bluffs metropolitan area.
“But what really tips the scales is having a state and community willing to work with us to create a good business environment and to allow us to work at Google speed,” Russell said.
Last Friday, the Iowa Economic Development Authority passed $9.6 million in property and sales tax incentives tied to the creation of jobs. In addition, the company is due to receive tax abatement on its property from the City of Council Bluffs. The agreements calls for an 80 percent abatement in years one to five; a 60 percent abatement in years six to 10; and a 45 percent abatement in years 11 to 20.
Iowa Gov. Terry Branstad said the tax incentive package offered by the state wasn't the most attractive Google had to pick from, but on top of other cost savings (including lower utility costs and a low cost of living), it was a situation that financially made sense for Google.
“We don't have nearly the incentives that a lot of other states have, but we do have a really solid, low-cost place for doing business,” Branstad said.
He attended the Tuesday announcement with Lt. Gov. Kim Reynolds; Debi Durham, director of Iowa's Economic Development Authority; and Teresa Wahlert, director of Iowa Workforce Development.
Up until the passage of the tax incentives, Google had kept economic development officials in the dark about its final plans, Branstad said.
“Google is a different kind of company,” he said. “They're not quite as open as some other companies. But you just have to have trust and understand their culture.”
Preparation of the 1,000-acre parcel of land the company owns east of the MidAmerican Energy generating plant on the east side of Interstate 29 began this week.
The construction will add hundreds of jobs as the center is built, said Council Bluffs Mayor Tom Hanafan. After that, Google will hire “at least 50” computer engineers, digital security experts and technicians — good-paying jobs expected to offer salaries of $50,000 or more — who will remain permanently, Russell said.
But he hinted the new development is just a piece of what Google has planned in the Midlands.
“Relatively speaking, it's going to be a bit smaller (than the original data center), for now,” Russell said. “Obviously, we have space to grow. So, we could get bigger.”
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