(Guest column reprinted from March 7 (2019) issue of This Week New Albany News; authored by Jennifer Chrysler, New Albany’s community development director)
With the recent announcements that Facebook and now Google are building data centers in New Albany, the New Albany International Business Park’s Information Technology and Mission Critical cluster has emerged as the city’s fastest-growing sector and a leading economic engine for the state of Ohio.
Multinational technology leaders, as well as Fortune 500 and 1000 companies, including American Electric Power, Discover Financial Services, Motorists Insurance Group, Nationwide Mutual Insurance Co. and TJX Cos., now have invested $2.8 billion in data centers here.
What does this mean for New Albany residents?
Data centers provide millions of dollars in revenue to fund city services and support our New Albany-Plain Local School District, which ultimately helps reduce residents’ tax burden.
For example, beginning in 2021, Google will generate for the city a minimum of $750,000 in annual revenue derived from income taxes, community-authority payments made by the company, city-related property taxes and direct payments from the company.
This revenue, designed to fund infrastructure and capital needs, would reduce the burden on the general fund, enabling the city to allocate more revenue to support police protection, road maintenance, leisure trails and other amenities.
And because the payments are not based solely on income taxes, they would not be affected by the layoffs that typically accompany economic downturns, providing a recession-proof benefit.
When it comes to data centers, New Albany Plain Local also is a big winner. Google’s site is expected to generate approximately $33,000 in property taxes for New Albany-Plain Local in 2019. When the facility is built, the schools will receive more than $500,000 annually from the same land, a 1,515 percent increase, even with a 100 percent tax abatement because the abatement applies only to the building, not the land. As land values increase, revenue increases.
Google plans to hire a minimum of 50 employees when construction is complete. However, as a result of the revenue structure, the city will receive revenue equal to the amount it typically would get from a company with 750 employees and a payroll of $37.5 million. Consequently, the city and schools benefit from significant revenue increases with minimal impact on city services, traffic or the school district population.
Revenue derived from data-center construction is another benefit.
According to a 2017 U.S. Chamber of Commerce study, data-center construction typically employs up to 1,688 local workers, provides up to $77.7 million in wages for those workers and produces $243.5 million from the local economy’s supply chain.
The same study estimates an annual injection of $32.5 million into the region when construction is completed.
These data-center projects are a win for our entire state, our region, our city and our schools.