Google Secretly Expands Tech Empire Across the U.S., Getting Millions in Tax Breaks
Amazon spent much of the last three months in the media spotlight, with its search for a second headquarters outside Seattle leading both to bidding wars between cities fighting for its affections, and extensive backlash from residents and elected officials in New York City, one of the winning locations. The protests against the new development were loud enough to cause Amazon to cancel the deal last week.
While Amazon received both suitors and scrutiny, another tech behemoth was quietly expanding its footprint across the United States. At the end of 2018, Google CEO Sundar Pichai announced expansion plans leading to a presence in 24 out of 50 states. The Verge reported in December that “So far, most of Google’s facility development plans in the US have been met with little opposition outside of the Bay Area.” According to a new report in The Washington Post, however, that might be because the public wasn’t aware of them.
Post Reporter Elizabeth Dwoskin writes that Google’s “development spree has often been shrouded in secrecy, making it nearly impossible for some communities to know, let alone protest or debate, who is using their land, their resources and their tax dollars until after the fact.”
In Midlothian, Texas, Google, under the name Sharka LLC, received over $10 million in tax breaks from local government for developing a data center in the town. Larry Barnett, president of Midlothian Economic Development, one of the agencies that negotiated tax breaks, told Dwoskin that he knew Sharka LLC was really Google, but the company had asked for secrecy, and didn’t reveal itself publicly until the deal was finalized. Travis Smith, managing editor of the Waxahachie Daily Light, a local paper, said, “I’m confident that had the community known this project was under the direction of Google, people would have spoken out,” adding, “We didn’t know that it was Google until after it passed.”
The process repeated itself in multiple cities.
In San Jose, Calif., where Google is planning its second-largest campus after its original home in Mountain View, the company has used nondisclosure agreements with local officials and developers to keep its plans under wraps. Records of this, going back to 2006, were obtained via Freedom of Information Act requests by the San Jose branch of the Partnership for Working Families, an organization that advocates against economic inequality. The organization requested documents from local governments in eight cities in which Google already has data centers, plus Midlothian and seven cities in which Google has offices. The FOIA’d documents revealed:
Officials in eight of the cities signed non-disclosure agreements, or NDAs, in their real estate dealings with Google, according to the documents. The documents also show that the search giant used shell companies to negotiate to build data centers in five of the six localities with data centers that responded to the records requests, including Midlothian; Berkeley County, S.C.; Council Bluffs, Iowa; Lenoir, N.C.; and Clarksville, Tenn. Google’s identity was eventually revealed, but often so late in the process that it precluded public debate.
Google spokesperson Katherine Williams told the Post that Google is committed to engaging communities in its development plans, saying in a statement: “We believe public dialogue is vital to the process of building new sites and offices, so we actively engage with community members and elected officials in the places we call home. … Of course, when we enter new communities we use common industry practices and work with municipalities to follow their required procedures.”
While real estate development negotiations are not exactly paragons of transparency in general, the level of secrecy surrounding data center deals, especially when it comes to Google, is particularly egregious. As Michelle Wilde Anderson, a Stanford Law School professor specializing in state and local government law, told Dwoskin, “If you scrutinize the winners and losers in this bargain, you see that Google is overwhelmingly the winner. Google has a strategic interest in getting their name out of these deals so that they go down more quietly, without public debate.”
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