The Google Negotiations, Part 1: Several sites considered

According to documents released by the North Carolina Department of Commerce this week, Google examined several other sites in North Carolina and discussed splitting its sever farm project between Caldwell County and Gaston County.

The materials were obtained through a Freedom of Information Act request by the News-Topic and other media outlets. Additional documents by the Commerce Department, along with those from local government, are being prepared for release.

Google announced Jan. 18 that it will build a large-scale data processing center in the Overlook Drive and Virginia Street area of Lenoir. In addition to tax incentives granted by Caldwell County and Lenoir, the company received a $4.77 million Jobs Development Investment Grant from the state’s Economic Investment Committee. The state incentives are targeted to the creation of a minimum of 168 jobs by 2010.

A global leader in Internet search and Web applications, Google also obtained a tax exemption on power usage and computer equipment from the state.

IDENTIFYING A SITE

The state first became aware of Google’s interest in a Nov. 14, 2005 e-mail from Google representative Taliver Heath. In the e-mail Heath inquired about “what counties/regions should I be looking at for favorable property tax rates?”

One month later, Google Senior Leader Rhett Weiss met at the Duke Energy offices in Charlotte with the economic development directors of Burke County and McDowell County, along with Caldwell County Economic Development Commission Executive Director John Howard and Marketing Director Alan Wood. Harry Poovey, a state economic development manager for Duke Energy, also was at the meeting.

Google officials returned to the area in February and toured sites in Caldwell, Rutherford and Rockingham counties. After follow-up meetings with Caldwell and Rockingham officials Feb. 22-23, Caldwell emerged as the front-runner for the project. In a Feb. 24 e-mail to Poovey, Weiss said he would be returning to Lenoir “with a couple of professional engineers from the client’s consulting engineering firm to perform a detailed site investigation.”

SECRECY AND UNCERTAINTY

Google’s demands to keep the project quiet began in March, with the company pressing the Commerce Department to sign a non-disclosure agreement (NDA). In a March 3 e-mail circulated within the Commerce Department, its general counsel and state legislative liaison Don Hobart said, “In light of the Department’s status under the public records and open meetings act, we will not enter into an NDA.”

Four days later, March 7, Weiss sent an e-mail to Commerce Department representative Peggy Anderson and said “please dissuade your department’s counsel from suggesting any changes (to the NDA) at all…Trust me, getting any changes made will take a long time if made at all…At best the project’s progress in NC will slow down appreciably relative to its progress elsewhere. That slow-down effectively could put NC out of the running due to timeline constraints.”

Anderson had written Weiss a day earlier, suggesting that “it would be a good idea to get a proposal from Gaston County on the Gaston Technology Park…The incentive proposal is their typical package. I have told them they will need to make it more attractive.”

In an e-mail to Howard March 8, Weiss forwarded the non-disclosure agreement for Lenoir and Caldwell County officials to sign. Weiss noted that the Commerce Department had not signed the NDA and said, &#8220Commerce’s failure so far to sign the NDA is causing the client concern and could have quite a chilling effect on the project and its communications, if this course continues.”

In a March 13 letter to Weiss, Commerce Secretary Jim Fain sought to assure him of confidentiality. “I will take the necessary steps to ensure that we limit access within our Department to the identity of the company and the existence of details of your project,” Fain said.

The next day Weiss met with Commerce and N.C. Department of Revenue officials then traveled to Lenoir for discussions with the Caldwell EDC, Caldwell Commission Chairwoman Faye Higgins, then-County Manager Bobby White, Lenoir Mayor David Barlow, City Manager Lane Bailey, Lenoir Planning Director Chuck Beatty, Bernhardt Furniture attorney Jason Hensley and Poovey. The trip also included a stop in Gastonia to tour its technology park.

By April 6, Anderson sent an e-mail to Hobart and said, “Rhett (Weiss) said that we are not considering sites other than Caldwell County at this time. If for any reason the buildings cannot be located on that site, we have other sites that have already been considered that we can fall back on. The client does not want me to expand the search at this time…The bottom line is that they want a break on the property tax, sales tax and possible Duke Power rate reduction.”

One week later, Weiss wrote to Howard about efforts by the company to acquire land owned by Bernhardt Furniture Industries. “(A)nother constraint I’m up against is, believe it or not, I have a small budget for land acquisition per se, and all these various and sundry parcels combined with Bernhardt’s prices are creating a brain teaser as to how to acquire everything within budget.

“We don’t want ‘free land’ on the one hand…but we also don’t want to deploy more capital there than need be…Between you and me, and I do not want this circulated, we will not pay Bernhardt’s prices for their parcels (clearly too high), but at this point I’m truly not sure what a reasonable counter-offer will be…”

In an April 21 memorandum from Anderson to Sandy Jordan, the Commerce Department’s director of business recruitment, she said, “Project H-3 is considering Caldwell County for a high-tech data center. They had planned to do a mega-site at the Lenoir location but do not feel that the site will accommodate the large footprints they have planned. They have asked for additional information on the Gastonia Technology Park as a possibility for splitting the project into two locations.

“The company is also considering South Carolina and New York for the project.”

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