LINCOLN — Nebraska lawmakers wasted no time Thursday in advancing a bill to lure a billion-dollar data center to the state.
A second project "almost as large" is now eyeing the state as well, said State Sen. Abbie Cornett of Bellevue, the sponsor of the data-center incentive proposal.
"I believe this bill is absolutely essential to building Nebraska and providing good-paying, high-tech jobs for the state," Cornett said.
The World-Herald reported Sunday that Nebraska was in a race with Iowa for a data center known only as "Project Edge" that would cost more than a billion dollars to build.
The company, officials have said, hopes to break ground by May, so lawmakers are moving quickly to adopt new state incentives.
Project Edge is thought to be the largest new business prospect, in terms of dollars, in state history. It could grow to a project 10 times larger than the $140 million Yahoo data center that was lured to La Vista in 2009.
"The math says we've got something big on the horizon," said Lincoln Sen. Tony Fulton. Based on a legislative fiscal note, Fulton said nearly $1.8 billion would be invested by the project in the first two years.
Kearney is said to be the leading candidate for the new project. The central Nebraska university town is one of a handful of rural cities in the state that have invested hundreds of thousands of dollars to create "shovel-ready" sites for data centers called power parks.
Omaha, officials have said, did not have a site ready for such a large project.
Cornett said Nebraska has a 50-50 chance of landing Project Edge if the incentive measure, Legislative Bill 1118, is passed. Companies would earn sales, property and personal property tax breaks if they invested at least $300 million and created at least 30 jobs — high-tech jobs that the senator said would pay $60,000 to $80,000.
Kearney Sen. Galen Hadley, who has made LB 1118 his personal priority bill, said Thursday that his community had invested $800,000 in local funds and $680,000 in state funds to create a power park.
Nebraska, Hadley said, has many of the qualities that data centers are looking for, including cheap electricity, wide-open spaces and access to fiber-optic lines. Right now, he said, demand for data storage in industries such as banking, insurance and health care is exploding across the country, with companies expecting to invest $100 billion in new data centers this year, and with 1,000 new data centers projected to be built in the next decade.
"If Nebraska lands a mere 1 percent of those projects, that would mean 10 new projects resulting in good-paying jobs for our young people," Hadley said.
He added that once a state lands one data center, others usually follow, citing states such as Iowa, North Carolina and Utah that have attracted more than one project.
Also Thursday, Debi Durham, director of the Iowa Partnership for Economic Progress, told the Associated Press that Project Edge is considering two locations in Iowa and one in Nebraska.
She said the Iowa Economic Development Authority Board expects to hear the plan and consider incentives to attract the business at a March meeting.
Durham said the new company is not Google, Microsoft or IBM, all of which already have operations in Iowa.
Nebraska officials have declined to comment on the identity of the prospect, citing confidentiality agreements. One Nebraska official said the company is not Facebook.
The Nebraska incentive bill was advanced from first-round debate on a 41-0 vote after about an hour of discussion Thursday.
The bill would add immediate personal property tax breaks to the incentives already offered to companies under the Nebraska Advantage Act. Cornett said other states, such as Iowa, offer more attractive tax breaks on purchases of personal property, such as computer equipment, which accounts for the vast majority of spending on data centers.
Under a second incentive bill being considered by Nebraska lawmakers, a big data center could negotiate lower electric rates for up to five years.
Two senators raised concerns about the data center bill, though neither said they opposed the measure.
Omaha Sen. Rich Pahls rattled off a list of the sales tax breaks being sought by businesses in the Legislature this year, saying all of them would amount to $16 million less in taxes paid to the state.
"There's a lot of big money here," said Pahls. "It's something to think about. Not on this particular bill, but in the future."
Omaha Sen. Brenda Council also questioned the "real and lasting" employment offered by such data centers. She said some young people are disqualified from working at such facilities because of poor credit ratings. Council said she wants to know whether Project Edge will have similar hiring policies.
Nebraska identified data centers as an economic opportunity in 2010 after a study of job-growth prospects. The state passed an incentive law for smaller data centers but didn't initially envision prospects that exceeded $1 billion.
Sen. Bob Krist of Omaha said that the responsibility to develop such shovel-ready sites rests with mayors and city councils and that no one should "bad-mouth" the state if a local community didn't develop such sites.
Contact the writer:
402-473-9584, paul.hammel@owh.com
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