20 jobs, but $54 million in tax breaks for Google center in Columbus

NBC4 Investigates

COLUMBUS, Ohio (WCMH) — A multibillion-dollar tech company will benefit from more than $54 million in tax breaks, to build a data center that will bring 20 jobs to Columbus.

The Columbus City Council overwhelmingly approved the deal in March by a 6-to-1 vote, months before learning that the company receiving the tax break was Google.

In its Economic Development Incentive Application, dated Feb. 18, 2021, lawyers for Magellan Enterprises, LLC described the company as “a subsidiary of a U.S.-based technology company,” without naming the parent company.

The application outlined plans for a $300 million data center at 5076 South High Street. The company promised the 150-thousand square foot center by the end of 2025.

“Without the availability of the tax abatement, the site will not be a competitive location for the proposed project,” attorney Scott Ziance wrote on behalf of Magellan.

Ziance declined to comment for this report.

Per the deal, Magellan will not pay property taxes on the site for 15 years, resulting in projected savings of $54,335,376, according to a project tax breakdown provided by the city to NBC4 Investigates.

In its application, Magellan said the data center would employ 20 full-time staff members, with salaries between $74,000 and $150,000.

“20 jobs for a $54 million (!!!!!!) tax benefit. I don’t understand,” wrote Columbus City Council president pro tem Elizabeth Brown in an email to a staffer, less than two weeks before she ultimately voted in favor of the project.

“Yeah, I had a lot of questions,” Brown said in an interview with NBC4 Investigates.

She said she decided to support the deal after doing more research.

“One of the things that was really important to me, was the not just the sort of jobs created by the company locating there, but the jobs created by the project itself,” Brown said. “I learned that there would be there will be 300 to 500 prevailing wage construction jobs. So these are really good, really middle class jobs.”

Robert Dorans said he was also skeptical of the deal at first glance. Like Brown, he was swayed by the construction jobs.

The Columbus Building Trades Council and International Brotherhood of Electrical Workers sent letters supporting the project.

Dorans said the $54 million tax burden would be spread across multiple entities. The city’s share would be roughly $2 million over the course of the 15-year abatement.

“The city recoups that those dollars right back on the income tax that’s generated by those 20 jobs,” Dorans said.

Projections in public records provided by the city estimate $750,000 in revenue from the 20 jobs over the initial 15-year period.

On Aug. 19, five months before the deal was approved, a press release from Google announced the tech giant had acquired land in Columbus to build a data center. The same day, a Forbes article called Magellan Enterprises a “shell company” for Google.

Brown, Dorans, and councilmember Emmanuel Remy said they found out Magellan Enterprises was owned by Google as a result of the Forbes article, but said that knowledge would not have influenced their vote had they known sooner.

“This is a performance-based incentive. We didn’t hand anybody any money to come here. And so, you know, if they never perform, they never get the benefit,” Remy said. “We felt very confident that it’d be a very reputable, strong, publicly traded company. And of course, we were right.”

Dorans said he wishes he and the people of Columbus would have found out sooner.

“I certainly think that we can do a better job, from a transparency standpoint, of being very clear about who the city is doing business with,” Dorans said.

Council president Shannon Hardin and members Mitchell Brown did not respond to emails seeking comment. Councilmember Priscilla Tyson was unavailable due to medical leave, according to a staff member in her office.

A city council spokesperson said councilmember Shayla Favor, who cast the only vote against the deal, was unavailable for comment.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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