Google gives back state grant

Search engine company didn't like all the terms, cites current economy

RALEIGH -- Google has given up a $4.7 million grant offered by state officials as an incentive to lure a computer data center to Lenoir.

A committee at the N.C. Department of Commerce approved the Internet company's withdrawal from the incentives program Thursday.

In December 2006, the panel, called the Economic Investment Committee, awarded the money to Google as it contemplated building a large facility in the North Carolina foothills to house computers that store data and fuel its massive operations.

The grant was among the smallest concessions offered Google, which agreed to create as many as 210 jobs. Tax breaks on electricity, incentives from Lenoir and other perks offered Google could still top $250 million over three decades.

Google has not received any of the $4.7 million offered by the Commerce committee. It never signed the contract accepting the funds.

The company didn't like all the terms, which was a factor in the decision to turn away the money, according to a Nov. 18 letter sent to Commerce officials by an attorney representing Google.

Another factor: "Recent volatile economic conditions make business planning even more difficult," the letter stated.

Google "fully expects to achieve employment and capital investment levels" consistent with those promised the state. But it might take longer.

Despite its prominence as the world's most popular Web search engine, Google is suffering amid the economic recession just like many other businesses. It has trimmed some perks for workers and cut other costs.

State leaders have ended incentive agreements with other companies in recent months as the economic downturn as taken its toll. On Thursday, for example, the Economic Investment Committee terminated a grant made in 2006 to boat maker Chris-Craft.

The company had agreed to create 640 jobs in Kings Mountain by moving production from Sarasota, Fla. Boat sales have since slumped, though, and earlier this year Chris-Craft closed that North Carolina factory. The company might one day return to the community, but not anytime soon.

"The company believes that it may be three years before expansion outside of Florida could be considered again," according to records from the Economic Investment Committee.