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Local officials ran a computer analysis that determined a state job-creation grant of almost $5 million would generate more than $45 million in state revenue over 12 years. But they didn't study whether committing to three decades of tax breaks made economic sense.
"Intuitively, the numbers showed it was a good deal," Lenoir City Manager Lane Bailey said Wednesday. Other local leaders also have defended the decision, saying Google's investment will be an asset to the struggling community.
The Internet search engine giant announced last month it would build a $600 million data center and create as many as 210 jobs with average salaries of $48,000 near Lenoir. The town, about 70 miles northwest of Charlotte, has been hit hard by the collapse of its furniture industry in recent years.
Records show that city and county tax breaks given to Google amount to $165 million over 30 years, in addition to state tax breaks and incentives totaling $94 million. The incentives package is among the richest in state history.
Bailey said the recent scrutiny of the Google deal has prompted local economic development officials to resume a study they said they started before the deal was reached.
"I am not sure where it is in the pipeline," Bailey said. "The only reason we're doing the study is to explain it to folks in the media who are raising questions about the economic impact."
The state runs economic models and analyzes economic influence from investment, said Bill Schweke, vice president of the Corporation for Enterprise Development. The Washington-based organization advocates for investing in poor communities.
Schweke said running economic models is a "standard national practice." He said and local officials should run the models, which "can surprise you. You can't really tell if you don't run the numbers."
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Information from: The Charlotte Observer, http://www.charlotte.com
