Apple’s new cloud data centre in the town of Maiden brings precious little economic relief to the North Carolina community. Guy Daniels reports.
With unemployment rates edging ever higher, and prospects for a quick end to the global recession receding into the distance, new economic growth opportunities are being welcomed by the politicians with open arms – and often large chequebooks. One of the high growth sectors in ICT is cloud computing, so the news that a major cloud provider is building a vast data centre in your impoverished town must be heartening. New jobs, new money – an end to the misery, right? Maybe not.
The huge 500,000 square-foot data centre in Maiden, North Carolina, which is housing Apple’s iCloud and iTunes operation, has been operating for several months, but any hope of kick-starting the local economy with a significant number of jobs has proven wrong. Total number of new full-time jobs created by the data centre – 50. This isn’t a new manufacturing facility, it’s not a steel mill or car production line, it’s a data centre. And that means a huge number of servers purring away with the minimal of supervision.
Apple came to the outskirts of Maiden, North Carolina (pop. 3,400), attracted by financial incentives. The local newspaper, the Charlotte Observer, reports that the town council cut the Apple’s property taxes by 50 per cent and its employee taxes by 85 per cent for a ten-year period. The Washington Post, citing published reports, added that North Carolina legislators, after debating for less than a minute, amended the state’s corporate income tax law to win Apple $46 million in tax breaks.
Yet despite the hefty reductions, Apple is still the town’s largest taxpayer, having already increased the town’s tax base by $369 million.
A few years ago, the economy of Maiden, which is situated in the North Carolina Foothills, was based on furniture and textiles. Now the town council will take anything it can. Unemployment in the county – even with Apple’s 50 jobs – is at a staggering 13 per cent.
Despite promising to create a further 250 jobs in maintenance and security through part-time contracting, newspaper reports suggest these have gone to people from out of town.
According to an interview with Maiden’s Town Manager, Todd Herms, in the Charlotte Observer, the town will receive property and personal taxes of around $700,000 from Apple and its new employees, which represents about 15 per cent of Maiden's $4.8 million general fund budget:
“When you get a $1 billion investment over nine years, it makes an impact… They are a great corporate neighbour.”
There is speculation that Apple wants to double the capacity of the data centre as it places a greater emphasis on its iCloud service, which would bring the total investment to around £1 billion. It has also obtained planning permission to start work on a solar power facility next to the data centre, in partnership with Leaf Solar Power.
Google has also created a data centre in the area. It invested $600 million in its facility and employs more than 100 people, including contractors. And Facebook is also going to be joining the party, announcing recently that it will be building a data centre in North Carolina. North Carolina Governor Bev Perdue was quoted as saying:
“The investment and jobs at the data centre will be a boon to that region of the state.”
Yes, the same state that drove legislation through its House and Senate to prevent local authorities from building and operating their own municipal broadband networks – arguably a far greater economic driver and job creator than a couple of under-staffed data centres (see countless previous articles and videos on TelecomTV). One has to wonder about the political process and the influence of lobbying and campaign donations…
The local politicians argue that although cloud computing doesn’t create a great volume of jobs, these data centres play an important part in a wider strategic development mission. North Carolina, for instance, is keen to emulate neighbouring Virginia’s success in creating a tech corridor.
Business analysts are not so sure. Todd Cherry, director of the Center for Economic Research and Policy Analysis at Appalachian State University, told the Washington Post:
“Data centres are more of a political benefit for those communities and politicians than for the community itself. They give the region the psychological benefit of having someone who wants them – somebody wants to come there and locate there.”
Michelle Bailey, a data centre analyst at IDC, added:
“There is not an immediate payback – there’s no doubt about that. What you hope is that you can modernise the town, hope it can be relevant in the future and attract more companies.”
Apple bought the land for $1.7 million from a local couple, who used the money to build themselves a new house nearby. So at least two of Maiden’s residents are happy.
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