Data storage company seeks incentives

Network Appliance, which three years ago was awarded millions of dollars in state incentives, is seeking a new round of tax breaks for another major expansion.

The Sunnyvale, Calif.-based data storage company is considering a new data center in Research Triangle Park that would cost $25 million to $40 million and employ at least 50 workers, Ken Hibbard, vice president of East Coast operations, said. The scale of the data center, which would be on Network Appliance's RTP site, is still being worked out.

NetApp also is looking at sites in Pittsburgh and Washington state. Hibbard said that incentives packages will be an important factor in the company's decision. "It's not the sole consideration, but it is a factor," he said.

Other considerations include the availability of talented workers -- where the Triangle scores high -- and the cost of electricity, where NetApp executives say RTP comes in second to the cheap hydroelectric power available in Washington.

NetApp has worked out a deal with the state for Job Development Investment Grant money. "We have terms that are drafted," said Mark Skiff, the company's director of workplace resources for East Coast technology sites.

Department of Commerce spokeswoman Deborah Barnes declined to comment. Commerce oversees the job development program, among the most lucrative incentives that the state offers. NetApp was offered $8.9 million from the program in 2004 for creating 361 jobs over five years.

"We have blown through those numbers," Hibbard said. The company, which employs about 675 people at RTP, has added about 520 jobs since August 2004.

If NetApp were awarded another job development grant, it would be only the third company to get more than one such grant. The others are Credit Suisse and General Electric.

Skiff said the company also is talking to Wake County officials about tax breaks.

Tony Gurley, chairman of the Wake County commissioners, said that the board is to take up an economic incentives matter in closed session May 7. He declined to identify the company.

NetApp also qualifies for an economic incentive from Duke Energy that allows the utility to offer discounted rates for a four-year period, Skiff said. Duke spokesman Tim Pettit declined to comment.

NetApp occupies one of the buildings it acquired from Cisco in 2004 and will soon begin interior construction of a 156,000-square-foot building that is just a shell today. The target for completing the construction is February, Skiff said.

In January, NetApp negotiated a contract to buy a 100-acre parcel across the street from its RTP site with the Research Triangle Foundation, Skiff said. That site, at Kit Creek Road and Louis Stephens Drive, would accommodate more expansion. "We have 120 days to decide whether we want to buy it or not," Skiff said.

Hibbard said the company's operations in RTP are growing faster than any of its other sites because of the favorable cost of doing business and the ability to attract good workers locally and recruit others from out of state.

Corporations' demand for more data capacity is turbo-charging NetApp's business.

The company has projected that annual sales in the current fiscal year, which ends this month, will increase 36 percent. In the next fiscal year, NetApp estimates that sales will rise as much as 30 percent, to $3.65 billion.

(Staff writer Jonathan B. Cox contributed to this story.)