Tuesday, November 10, 2009

Will Project Delays Kill Data Center Incentives?

In the big-picture analysis, the decisions by Google and Microsoft to delay major data center projects seem prudent. The projects cost $550 million to $600 million apiece, and neither company appears likely to run out of data center capacity anytime soon.

But state and local officials in Oklahoma and Iowa are focused on a smaller picture. The postponements of Google’s project in Pryor, Oklahoma and Microsoft’s facility in West Des Moines, Iowa dash any hopes that huge data center projects will create jobs in the midst of the economic crisis. Both states offered significant tax incentive packages to attract these companies, with expectations of a payoff in high-tech jobs.

Iowa Gov. Chet Culver “is obviously disappointed by the news that Microsoft has decided to delay their plans for a new data center in West Des Moines,” Culver’s office said in a statement Friday. “This is just one more sign that no one is immune from the economic recession gripping our nation. The Governor remains hopeful that conditions will improve and Microsoft will begin construction on their new facility soon.”

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