Spinoff from Google seen as minimal

But officials hope its prestige attracts others to region

CHARLOTTE -- As officials in Caldwell County negotiated a deal to land Internet giant Google, they envisioned a high-tech revival for their ailing community.

Reality, or just wishful thinking?

Under pressure to produce jobs, they sold the $600 million Google computer center project and its 210 jobs as a generator of spillover business and spinoff growth for Lenoir and the region.

But economic development experts -- and the company itself -- say the center won't be more than an isolated building filled with computers. And for the extent of the incentives -- which could amount to $1.24 million per job -- the deal doesn't come close to matching the benefits of projects such as Dell's N.C. computer factory.

By incentives, the Google deal might be characterized in the same ball park as Dell, which got between $242 million and $267 million when it located in Winston-Salem in 2005, said Andrew Brod, director of the office of business and economic research at UNC Greensboro. But, he pointed out, the Dell plant brought 1,100 jobs and at least six new companies.

"The spill-over effects have been phenomenal," Brod said. "Really this (Google) project is just an air-conditioned warehouse to hold computers."

Even Google says the center is not likely to spin off new local industries.

"It's a building filled with computers," said company spokesman Barry Schnitt.

Google won't be manufacturing anything that needs to be shipped, packaged or assembled. It's not the same as a new auto plant that needs a brake pad factory nearby, Schnitt said.

There is a staff -- the 210 jobs -- dedicated to keeping the computers healthy, he said. The Google workers -- averaging more than $48,000 in annual salaries -- will need places to live. They'll shop at local grocery stores and eat out, he said.

"It depends on how they're defining spin-off businesses. Will there be a need for more hotel rooms during construction? Will a local security firm hire more?"

Earlier this month, Lenoir Mayor David Barlow defended the deal. "Look back at BMW in Spartanburg," he said. "The incentives offered there now look like nothing because of what has happened."

South Carolina won the German automaker in the early 1990s with an incentives package of about $130 million -- $108,000 for each of the 1,200 jobs promised. As of last summer, the company employed nearly four times as many people as it initially projected and invested more than 10 times its original estimate of $250 million.

"There's no guarantee that will happen here, but if (we) didn't get (Google), there was no chance that we would have it," Barlow said in an interview.

During the Google negotiations, the Caldwell County Economic Development Commission predicted Google's presence would grow more business.

As spending to recruit Google drained its special projects account, the commission in December applied for an emergency grant from the Golden LEAF Foundation, a nonprofit funded by state tobacco settlement money to assist poor N.C. counties.

The EDC listed five ways the proposed project would revitalize its distressed county. Among them: "Spillover economic benefits generated by higher wages, increased tax base and growth in related businesses serving the new industry."

In a September 2006 letter seeking a different grant, commission chief John Howard wrote: "If we are successful, we anticipate several future phases. This project would provide a major step towards the revitalization of not only Caldwell County, but the entire region."

Google, when it announced the deal in January, said it could build another data center on the 215 acre site. But the company says there are no immediate plans.