Justified economic incentives or just an inferiority complex?
To lure Microsoft’s new data center here, the San Antonio City Council on Thursday will consider giving the technology giant a 10-year tax abatement and $5.2 million in incentives.
Oh my gosh, it’s Microsoft! Let’s give it all the money it wants so that it will relocate here. After all, there couldn’t be any other reason for Microsoft to move here. We’ve pretty much established that if Texas ranks last in park space, we’re leading the state. Our symphony seems unable to remain solvent for more than a few years at a time and we’re only now catching up on libraries.
Never mind the fact that the data center doesn’t meet the requirements set for tax abatements in the area concerned. C’mon, we’re talking Microsoft here!
Even with the abatement, the Microsoft project is estimated to contribute $14.7 million in sales taxes, new property and utility payments during its first 10 years, according to Economic Development Department documents.
In addition to the tax abatement, the city is asking CPS Energy’s board for approval of up to $5.2 million to help pay for electrical infrastructure for the project from CPS Energy’s Community Infrastructure and Economic Development Fund. The fund has a balance of $24.4 million.
“San Antonio is competing with multiple sites across the country for this proposed project,” according to an Economic Development Department statement recommending the project. “Thus, reduction in this incentive package may result in the project not coming to San Antonio with the resultant loss in the positive economic and fiscal impact to San Antonio.”
The project would establish San Antonio as an attractive site for data centers, according to the Economic Development Department.
The tax abatements are okay since they would still be paying money like sales taxes and utilities. Of course the children of the families that move to San Antonio will be attending school for free for ten years and you and I will be paying to build the critical electrical infrastructure needed for a data center. But it’s worth it since the only reason why Microsoft is even considering San Antonio is because we’re ready to give it money. And maybe if they come, it will give other companies a reason to come.
You see, Microsoft is considering relocating to San Antonio out of the goodness of Bill Gates’ heart. It couldn’t possibly have anything to do with our natural competitive attributes such as cheap labor, low utility rates, and cheap land.
Austin a hot spot for data centers, but competition heats up
The Boyd Co. of Princeton, N.J., says Austin ranks well down the list of potential locations for major data center projects being built by financial-services companies.
Boyd, which represents some major banks and insurance companies that are in the hunt for new data centers, ranks San Antonio, Denton and Sioux Falls, S.D., among the top 10 because of lower wages, lower utility rates and lower real estate costs than other towns, including Austin.
And even though UTSA does have one advantage over UT Austin, that couldn’t possibly be a factor either.
Austin a hot spot for data centers, but competition heats up
There are other considerations, too. The Boyd Co. says Sioux Falls and San Antonio also have nearby schools that are certified by the National Security Agency, the super-secret spy agency that Boyd Co. considers the gold standard in data security.
The University of Texas at Austin lacks such a certification, Boyd said, but UT-San Antonio is certified by the NSA.
Much of the driving force behind the datacenter boom is the rise of increased regulation and civil lawsuits related to security breaches and identity theft, the Boyd Co. says. Some financial-services companies are pulling back some of their customer support operations from Asia because of those new security concerns, Boyd adds.
If Microsoft doesn’t choose us, how will we ever be able to attract another data center in the future? I know, maybe we could focus on assisting local companies in their development. Anyone ever hear of RackSpace?
E-Commerce News: Servers: Rackspace: A Study in Fanatical Customer Support
“We have remained true to that specialized offering, which has helped us to maintain profitability since February 2001,” Rackspace CTO John Engates told TechNewsWorld. “As a result, we are the fastest-growing managed hosting specialist in the world.”Engates pegged that growth at 60 percent annually.
The firm has been steadily increasing the number of workers it hires to service an expanding customer base. Rackspace does not purchase other companies and absorb those workers, Engates said.
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Within that 50-50 infrastructure split, Rackspace hosts over 22,000 servers. The company employs 1,200 workers, including 200 based in London. The remaining workforce is deployed throughout seven data centers.
But helping a local company doesn’t fit into the San Antonio inferiority complex where anything from outside the city is considered better than what we already have. Okay, this is bad, I’m starting to sound like Rodney Stinson.
The point is that as a community we seem unwilling to support local development because that might mean that one part of the city may benefit more than another. Maybe throwing money at outside investment isn’t such a bad thing if it eventually results in enough people moving to the city who are interested in local community development. And will someone tell me why Westover Hills has a Reinvestment Zone?
Technorati Tags: Microsoft data center, San Antonio, Economic development, tax abatement, Economic Development Department, business relocation, CPS Energy’s Community Infrastructure and Economic Development Fund, Westover Hills Reinvestment Zone
Filed under: Economic Development department, Economic development, San Antonio, Tax Abatements, Uncategorized, Westover Hills Reivestment zone, business relocation, cps Energy's Community Infrastructure and Economic Deve, microsoft data center
