Google makes Berkeley County cornerstone of the innovation economy

GOOSE CREEK -- They came, they said, looking for a site that had everything: ready access to electricity, access to water, a dependable, diverse infrastructure, a supportive business environment and, most importantly, room to grow as the market dictates.

In the end, representatives of Google Inc. said there just wasn’t any question that the 520 acres they’d set their sights on in the Mount Holly Commerce Park satisfied all their needs.

“It was a site that we looked at for a very long time,” said Rhett L. Weiss, Google’s senior team leader for Strategic Development of Global Infrastructure.

“And it wasn’t a decision we made lightly,” he continued. “We wanted to make sure this was a place worthy of a $600 million investment.”

After months of intrigue, Google Inc. has officially announced plans to open a data center in the Mount Holly Commerce Park in Berkeley County.

The revelation ended months of cat-and-mouse with the search engine giant that began last December when an entity called Maguro Enterprises LLC purchased the land for the price of $1 and “other valuable consideration” totaling more than $16.9 million.

Coming out from behind Maguro’s shadow — it was Weiss who came up with the cover name — Google executives went out of their way to be neighborly on April 4, visiting select media outlets, including the Charleston Regional Business Journal, and hosting a “community” barbecue at Cypress Gardens the following day.

The first phase of the data center, which Weiss described as an “environmentally safe and friendly use of the land,” is scheduled to open by the end of the year.

When the entire facility, presently conceived of as two large buildings on a large campus, is built out six to eight months later, it will employ about 200 people, he said.

Barry Schnitt, Google’s spokesman, said jobs created by the facility will be spread over 24 hours, minimizing the facility’s impact on local traffic during peak travel hours.

Of secrecy and server farms
Google’s Goose Creek data center will be one of a network of large service the company operates on the East Coast. In addition to this new site, Google is building a similar facility in Lenior, N.C., and is also considering another South Carolina site just outside of Columbia.

Weiss said the company is continuing to evaluate the site, but like the lead up to the announcement regarding the facility in Goose Creek, the valuation appears to be far more than that.

While he didn’t get into specifics of progress on that site, he did mention both the U.S. Army Corps of Engineers and wetland mitigation, two phrases that typically aren’t mentioned until well into the land-planning process.

“What all of these locations have in common is that they are all part of our global infrastructure,” Weiss said. “We began to look more earnestly at the Southeast and South Carolina in particular because it was quickly becoming a tremendous population center.

“You know, when people do a search on Google, that process doesn’t just happen. It has to be processed by a huge server farm, and the closer you are to your users, the faster that process can happen,” he said.

One question that begged to be asked was why Google was so secretive about its interest in the Mount Holly Commerce Park site.

“The reason, simply, is that we are in a very competitive business environment, and in that environment, any kind of expansion is a very sensitive situation,” Weiss said. “If you’re Google, you don’t want to provide Yahoo with information about where you think your customer base is and where it’s growing.

“Who knows, given what they know now, Yahoo might be building a facility right up the road,” he joked.

“The other thing is it’s an industry standard to keep business negotiations confidential, and I think that’s good not just for us, but for the states we want to talk to,” Weiss continued. “If it had gotten out, officially, that Google was actively considering South Carolina, the state would have been hit with all kind of competitive challenges of their own.

“In the end, that’s why we didn’t want anything said until we were sure of what we were going to do,” he said.

Google officials also emphasized that while confidentiality was key, all of the public officials involved in talks with the company fulfilled their legal obligations as the economic development matter progressed.

“They did publicly what they had to do publicly,” Weiss said.

What’s in store
Andrew Johnson, Google’s East Coast regional manager of hardware operations, said that while he couldn’t go into details on all the specifics of the data center, the easiest way to describe it is as a specialized facility that contains lots of computers that run Google’s services.

“It’s literally where your search goes when you request information,” he said.

The company will be hiring a wide range of employees, from system administrators to entry level hardware technicians to managers, food service workers and ground keepers.

The average salary of these workers will be about $48,000 plus benefits.

“We’re trying to hire locally where we can, although certain jobs requiring specific skills sets will probably go to applicants from outside the area,” Johnson said.

Unlike many large companies that have located here in recent years, Google is not leveraging the ability of the state’s technical college system to provide worker training.

“We honestly feel that the Charleston area work force is sophisticated enough to suit our purposes, and whatever training is necessary can be done in-house,” Johnson said.

Like other Google facility’s, the internal culture will stress creativity and have the accouterments of a college dormitory, with access to free food, ping pong tables and video games, and even an in-house laundry being made available to employees.

As for how the facility will function, Weiss said the design of data centers is constantly evolving as Google rethinks ways to optimize its operations.

“Safeguarding the environment and finding ways to reduce the amount of power we use are constants at Google,” he said. “Toward that end, we try to use the most efficient servers as possible at our data centers, and we use an evaporative cooler, which uses a lot less electricity that traditional air conditioning units.”

Weiss said while presently the company has concrete plans only for a data center on the site, there will be plenty of land left over for future expansion as Google grows and enters new business markets.

“Who knows what this facility might be in the future,” he said. “It could be that in the future we add a research and development facility. It could be we add a training facility. This is the first time, by virtue of the size of the site, that we’ve had the flexibility to think that way.”

South Carolina officials just got it
As for what it took to lure the technology giant, Weiss said Google didn’t come to South Carolina looking for freebies or exclusive incentives geared solely to the company.

“Basically what got us here was a great state, county and local economic development team,” Weiss said. “In a phrase, they got it. They understood what we needed to establish a presence here and they also saw us as a good fit in regard to their objective of transforming the state into a knowledge-based economy.”

Weiss said for all the secrecy attached to them, Google’s approach to projects such as the Goose Creek data center is fairly straightforward.

“We basically come in and say, ‘this is what we’d like to do’ and explain that we are trying to launch multiple interconnected projects in multiple places, which makes normalizing our costs between projects important,” he explained.

“If officials indicate their state has or is willing to create that environment, then the discussions continue; if not, or if they feel it’s not in their best interest to create that environment, that’s fine. We’ll look elsewhere,” Weiss said.

With that as context, Weiss said South Carolina was very receptive to Google’s interest and marketed itself well, telling the company of its keen interest in creating a new, innovation-based economy and laying out the full menu of initiatives it had already adopted to try to make that a reality.

Weiss said Google was very impressed that the state legislature had recently updated the state tax code to exempt the electricity and the capital investment in equipment needed by internet-related companies from sales tax.

“This is something that the state had been doing for some time for the manufacturing sector, and it showed they were modernizing their tax and economic development regimes to better fit this new economy,” Weiss said.

“It wasn’t a Google-specific move, but it is one that is good for our industry,” he said.

Google also applied for another standard incentive, the state’s Job Development Credits, an application that was approved by the Coordinating Council for Economic Development.

The JDC program is a performance-based incentive directly related to new job creation and new capital investment. It offers quarterly partial refunds of new full-time South Carolina employee withholding taxes, once Google meets the investment and job thresholds, pays payroll taxes and provides proof of having paid qualified project costs.

The first million dollars of JDCs may be advanced, if Google so elects, from the governor’s closing fund, which is a fund approved by the state legislature for economic development efforts. This funding would reimburse the company partially for site preparation and infrastructure.

Google stands to receive approximately $4.8 million in JDC funds over the next 10 years if it invests $600 million and creates 200 jobs. That 10-year period can become 15 years retroactively if the company creates 400 jobs, company officials said.

The company has also entered into a fee-in-lieu-of-taxes agreement with Berkeley County. If Google invests exactly $600 million in the Goose Creek project, its annual fee payment will be $1.96 million. The fee depends on the amount of investment the company makes: If Google invests more in the area, the fee will go up; if it invests less, the fee will be less.

Google said its fee-in-lieu of tax payments will amount to approximately $58.8 million over the 30 of the agreement. In addition the company expects to pay about $7 million in sales tax for the purchase of building materials.

More than that, Weiss said, Google’s initial investment in the land and two subsequent fee-in-lieu-of-tax payments will pay off Berkeley County’s debt service on the Mount Holly Commerce Park, a cooperative economic development site it operates in partnership with Alcoa and the Santee Cooper utility.

In return for such considerations, Weiss said Google essentially brings three things directly to the local economy: tax revenue, money paid to directly to employees and local businesses and diversification.

Speaking of the latter, not only did Weiss appear well-versed in the history of the Navy base closure, but also was well aware of the Angelou Report and its blueprint for diversifying the economy through implementation of specific business clusters.

Weiss said in addition to the state’s business-friendly incentives, another critical factor in Google’s decision to invest in Goose Creek was feedback the company solicited from existing businesses in the region, not the least of which was Alcoa Mt. Holly, which aside from now being a neighbor to Google, also controlled the land in which the company was interested.

“They reinforced our view of the positive business climate in the state and said a lot of the things people traditionally say about the Charleston region — that it’s a great place to live and work,” he said.

“Our discussions with Alcoa were particularly important, because they are a company that has made a significant strategic investment in the area, as we have now done,” Weiss continued.

Officials express satisfaction with the deal
In a joint statement with the company, Gov. Mark Sanford said Google’s announcement was “a positive sign that our efforts to improve the state’s business climate are paying dividends when it comes to attracting high tech, knowledge-based industries that will enable us to further compete in the global economy.”

“Given the stature of this company and the magnitude of this investment, this is a real win for South Carolina that will have a tremendous impact on the local and state economy,” he said.

S.C. Secretary of Commerce Joe Taylor said the state’s ability to attract a world leader in technological innovation will yield substantial results for the state.”

He said Google has vowed to make a concentrated effort to use as many local vendors and suppliers as possible so that the economic impact of this investment will have the greatest benefit.

“This state-of-the-art operation will bring tremendous economic opportunity to residents and businesses in the Charleston area,” said Bill Finn, chairman of the Charleston Regional Development Alliance. “The international recognition of the Google brand will also solidify our reputation as a top location for innovation and technology.”

In the face of such comments, Weiss emphasized that regardless of whether Google expands into Richland County, its commitment to Goose Creek is for the long, long term.

“At Google we’ve always stressed that not matter how much growth the company experiences, additional projects don’t take away from the projects that preceded them,” he said. “We seemed to have seized onto something, and customers seem to want more and more of our services.

“It’s a big world out there, with plenty for everyone,” Weiss said. “And lots of information to connect people to.”


Want to work for Google?

Andrew Johnson, Google’s East Coast manager for hardware operations, said the company’s first order of business for hiring will be to find local managers for the overall facility and on-site technical operations.

Jobs descriptions for these positions and instructions for submitting resumes will soon be posted on Google’s Web site.

Johnson suggests that prospective applicants take a look at the positions the company posted for its previously announced project in Lenoir, N.C., to get a better idea of what these positions entail.

Personnel hired for these positions will be in charge of staffing the facility with maintenance, facilities, hardware and software technicians, which will make up the bulk of the job openings.

Other interested applicants and vendors can send information to info@mthollyproject.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Thursday, 05 April 2007 - By Dan McCue - as provided by South Carolina's Media Engine for Economic Growth