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NE: Incentives not enough to lure billion-dollar data center; IA may get it

By   /   November 15, 2012  /   7 Comments

By Deena Winter | Nebraska Watchdog

LOSER? Nebraska has been using economic development incentives to lure a data center to Kearney, but it may have lost out to Iowa.

LINCOLN — Nebraska may have lost out on a $1.5 billion data center that it had been battling with Iowa to land.

The Des Moines Register reports that the Des Moines suburb of Altoona is finalizing details with an unnamed company to which the two states have offered a myriad of economic development incentives.

Altoona City Administrator Jeff Mark told the Register that he expects the mystery company to buy property for the data center by year’s end.

If Iowa indeed has won the project, it will be a tough blow for the Nebraska city of Kearney, which spent about $2 million to buy 165 acres to prepare a shovel-ready power park for the data center Nebraska officials call Project Edge.

Although the state kicked in a $1 million grant to help Kearney, that’s still a lot of money in a city of 30,000 with a total annual budget of $66 million — although Kearney Mayor Stanley Clouse said in August the site was being marketed to other companies, too.

Nebraska officials signed a confidentiality agreement banning them from naming the company, rumored to be Facebook or Apple.

Data centers, or server farms, are basically big warehouses full of computers that use huge amounts of electricity and require a lot of water to keep cool. Some economists say they’re not worth all the incentives placed at their feet because they employ few people.

Earlier this year, Nebraska lawmakers passed legislation to match Iowa’s economic development incentives and were told the company would break ground in May. But May came and went and talk of the project died.

By August, Catherine Lang, director of the Nebraska Department of Economic Development, told Nebraska Watchdog that the project was on hold. Lang could not be reached for comment Thursday.

Nebraska lawmakers passed legislation that would allow the state to offer economic development incentives on par with Iowa’s, including:

  • Refunds on sales and use taxes;
  • A property tax exemption;
  • A refund on personal property taxes on computers and software.

The company still would pay sales tax on electricity and employees would pay income taxes. The overall impact on state revenue over 14 years was estimated at $12 million.

Contact Deena Winter at deena@nebraskawatchdog.org. Follow @DeenaNEWatchdog

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Deena Winter has been a journalist for over 20 years, writing stories for the Northwood Gleaner, Bismarck Tribune, Associated Press, Denver Post and Lincoln Journal Star before joining Watchdog.

  • OutWst

    Hilarious. The company’s probably looking for a few smart people to hire, and Iowa definitely gets the nod over Nebraska in that arena. Nebraska’s collective IQ is perfectly reflected in its dug-in Republican dominance. Nebraska. Red. Duh.

  • Spike

    Perhaps that’s what NE got for voting Rummey & Fishmonger. These tech cos aren’t dumb!!

  • http://www.facebook.com/people/David-Harbert/100001406372795 David Harbert

    Nebraska, the also ran state. They probably liked the idea of using wind generated electric (Iowa-NOT Nebraska), good public relations.
    Although after dealing with Heineman, they probably knew Nebraska was a lost cause.

  • http://www.facebook.com/MarkEWelsch Mark Welsch

    I’ve heard that the company involved wants to use sustainable energy, not coal, so they picked Iowa that generates over 20% of their electricity with with wind. Wind is a free, local fuel.

  • http://twitter.com/GerardHarbison Gerard Harbison

    I love the clueless comments from people who probably have never seen a server farm, and think this is somehow political.

  • http://www.facebook.com/paul.fisher.79025 Paul Fisher

    There is nothing free about wind generated power. C’mon man!!!!! get real.

  • Michael James

    When states compete against states the average taxpayer picks up the tab. I am not in favor of such bad tax policies. Average families taxed to subsidize billion dollar businesses, that is just not right.