Sherburne County offers incentive to Google to build Minnesota data center

Sherburne County commissioners voted Tuesday to give Google Inc. a break on property taxes if it builds a data center in Becker, about 60 miles northwest of the Twin Cities.

The decision, coming in a 4-0 vote, represents the first government incentive for the project, which was revealed in January by Xcel Energy Inc., owner of the approximately 300 acres of land where the data center would be built.

Google has not publicly acknowledged the project.

Sherburne commissioners agreed to tax Google only at the property's current value for 20 years. An open field with no improvements, the land generates about $16,500 in annual property taxes, with the county getting about $9,000, city of Becker about $3,000 and the rest going to the Becker School District and special projects approved by local referendums.

In granting the abatement, the county estimated it will give up about $390,000 in prospective taxes annually, or about $7.8 million over the 20-year period. The Becker City Council on Tuesday will consider a similar break on its portion of the property tax bill.

The Becker School District decided not to grant such an incentive and is positioned to instead collect about $300,000 a year in property taxes from Google, according to an estimate discussed by the County Board.

Separately, the Legislature is considering a bill to provide $20 million for infrastructure improvements to help lure Google to Becker.

For local officials, the incentive debate for the Google project is part of a broader discussion about how to adjust the tax base as the area's largest taxpayer, Xcel, scales back.

The utility operates the state's largest power plant, called Sherco, in Becker, but it plans to close two of its three coal-fired generators by 2026 and build a new natural-gas generator. The utility has been working with local officials to replace jobs and tax revenue that will decline as it downsizes.

Becker Mayor Tracy Bertram said she will support the city's tax break for Google at next week's meeting. "I feel it is the safest way to go to attract or to be able to bring in this type of corporation," she said.

She said her support is based in part on an assessment that the data center will impose few new costs on city services. "They frankly want nobody there," Bertram said, noting the plant will even have its own fire-suppression system.

Sherburne County administrators estimated the local economy will get a boost of about $7.5 million annually from jobs that are directly and indirectly created by the Google project. The data center will employ only about 50 people, but hundreds, perhaps more than 1,000 people, will be employed building it.

Xcel disclosed in January it has been talking with Google for several years about the prospect of building a data center on a portion of the thousands of acres it owns around Sherco. The firms also have discussed beefing up Xcel's wind production in other parts of the state to fill the power demands for a Google data center.

The data center is essentially a large warehouse filled with computers to store and index websites, photos and other content and run applications such as e-mail for Google's consumer and business customers. Since 2006, Google has built six giant data centers and is building three more, spending more than $1 billion on each, chiefly for the computers and complex electrical system that is a 100 percent redundant power supply.

Google's data center would be the first one in Minnesota to be built by one of Silicon Valley's giant firms.

Several local businesses, such as U.S. Bancorp, and institutions such as the University of Minnesota operate very large data centers around the Twin Cities. But Google's would be far larger.

Xcel has described a data center that would be more than 100,000 square feet and cost $600 million to build, likely representing just the first phase. In Omaha for instance, Google has spent more than $2.5 billion on a data center that opened in 2008 and has been expanded several times since.

Google last month said it would spend $13 billion on new data centers and offices in the U.S. this year, but it didn't mention Minnesota as a site for one.

Evan Ramstad • 612-673-4241