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American Express picks Guilford County for data services center

Friday, May 21, 2010
(Updated Saturday, May 22 - 6:35 am)

GREENSBORO — Guilford County got the best of both worlds Thursday.

American Express has decided to locate a $400 million data services center in the eastern part of the county and agreed to do so without requesting any local financial incentives.

“I would say congratulations to all of us. This is a big deal. A big deal,” said Pat Danahy, president and CEO of the Greensboro Partnership.

It also is a big deal that the company decided to forgo incentives. The decision left local leaders puzzled but delighted.

“That’s refreshing,” said Keith Debbage, a professor of urban geography at UNCG. “I suspect a major reason for this is (their) level of familiarity with the marketplace. Greensboro is no stranger to American Express.”

The company already has a large call center at 7701 Airport Center Drive. That operation opened in 1985 and employs about 2,000 people.

Debbage said the company could have other reasons for eschewing incentives.

“I suspect they don’t want people poking their noses in their business.” he said. “It is also possible that a rapid decision is needed, and they didn’t feel the need to get tied up in the public realm.”

At one point, local officials said city and county governments would consider putting up as much as $13 million in incentives. Some would have come in the form of infrastructure improvements. That would have been the largest outlay ever for area municipalities.

Greensboro and Guilford County tentatively had scheduled incentives hearings related to the project but quickly canceled those efforts.

Guilford County had been competing with Des Moines, Iowa, for the center.

Data centers such as the American Express project are huge computer storage facilities that preserve company information.

Local officials said American Express will build two buildings in eastern Guilford County. One will go up at a 100-acre site at Rock Creek Center, an industrial park south of Interstate 40-85 that is seven miles east of Greensboro, according to Assistant City Manager Andy Scott.

Richard Beard, a partner with Simpson Schulman & Beard, the company that manages and markets Rock Creek, declined to comment.

The other building will be at an undeveloped corporate park across Interstate 40 from the first site. That site is owned by developer Roy Carroll. The cost of the land transactions could not be determined Thursday.

The buildings will go up one after the other. The larger will be built first at Rock Creek and cover 350,000 square feet and cost between $350 million and $400 million. It will serve as the main data center.

The second will be 150,000 square feet and act as a back-up for the main building. Its cost could not be determined. It will be built in about two years, Scott said.

The Carroll property likely will be annexed into the city. It will need water and sewer access, Scott said.

Initially, the company will employ 50 to 60 people, but that number could grow to 150.

Several attributes lured American Express to the Triad: a strong, uninterrupted power supply from Duke Energy, well-positioned Internet cables and a location generally free of natural disasters.

Experts say more data companies will take a hard look at coming to Greensboro after the American Express deal.

“Sometimes we see the effect of data center clustering,” said Rich Miller, editor of Data Center Knowledge, an online news service. “One company will identify an area as being ideal for a data center and others will follow in short order.”

Dan Lynch, president of the Greensboro Economic Development Alliance, the city’s top economic developer, said American Express counts as a bull’s-eye for this city’s business recruiting strategy, which includes data centers.

“It’s in the sweet spot of our marketing strategy,” Lynch said.

The initial investment could exceed $400 million. Local officials have said the project ultimately could exceed $1 billion.

“It remains to be seen how big it might become,” Danahy said.

The city will earn an estimated $1 million in annual property tax revenue from the facility when it is fully operational, Scott said. Guilford County stands to make two or three times that amount from property taxes on both facilities, he said.

Danahy said he did not know the company’s timetable, but he added, “they are anxious to get going.”

American Express notified local recruiters of their decision Wednesday night. The company declined to discuss its decision.

“Our policy is not to comment on our technology facilities,” said Susan Korchak, a spokesman for American Express in New York.

The Triad has plenty of experience with big-dollar incentives packages. They include Dell, which built a factory in Forsyth County in 2005 with about $280 million in state and local incentives, $37 million of which came from local sources.

FedEx built a massive package-sorting plant at Piedmont Triad International Airport with a $500 million package of incentives from  the airport and state and federal governments.

Dell said last year it would close its plant, but it continues to operate at reduced capacity. And FedEx is running at minimal levels until the economy improves, the company has said.

Still, a few companies have opened major operations with little or no incentive money.

Lenovo opened a computer distribution center in Whitsett in 2008 with no public incentive money.

In 2007, Kay Chemical said it would spend $12 million to expand its plant despite being rejected for county incentives.

And Honda Aircraft got a relatively modest incentive package of $8 million for its $100 million headquarters and assembly plant at PTI.

Commissioner Paul Gibson said he applauds American Express.

“They did the right thing,” he said. “They came for good business reasons.”

Staff Writers Amanda Lehmert and Donald W. Patterson contributed to this report.

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com

Accompanying Photos

What does this mean?

JOBS

  • Initially, the company will employ 50 to 60 people, but that number could grow to 150.

COST

  • The company did not request any financial incentives from Greensboro and/or Guilford County.

Comments

This article has been closed to new comments. Comments are generally closed after 14 days. However, comments may be closed earlier at the discretion of the News & Record.

Inappropriate content? Please report abuse.

thirstytarheel

May 20, 2010 - 2:11 pm EDT

This is great news for these economic times. Did our senior Senator Richard Burr have any comments about the new AMEX facility? Did you folks at the N & R attempt to contact him, and if so, was he unavailable, refused to comment, you haven't heard back, etc.? This story gives the impression that Senator Hagan is the only one of our senators concerned about jobs. If that is the case, so be it, but it would nice to know if Senator Burr was attempted to be contacted. And also what about our representatives in the House, Howard Coble, Mel Watt, and Brad Miller?

Mark Binker

May 20, 2010 - 2:44 pm EDT

Thirsty:

We're asking a variety of people to comment, including Gov. Perdue and Sen. Burr. However, this is breaking news and we're not going to hold up publishing while we wait for folks to decide whether they want to weigh in or not. If they come, we'll have those comments in tomorrows paper.

Thanks for reading.

rmacz

May 20, 2010 - 4:19 pm EDT

Mark, you might want some input from Google also.

onbe1kanoby

May 20, 2010 - 4:59 pm EDT

good news,
@ RMACZ... way to go

mediaspeaks

May 21, 2010 - 7:27 am EDT

Senator Burr was too busy voting AGAINST Wall Street Reform to protect his fat cat donors from the banking/investment industry and was not worried about good news on Main Street, therefore he had no comment. Burr really needs to remember that 500,000 people voted against him on May 4th and only 300,000 people voted for him.

Dogwood

May 20, 2010 - 4:52 pm EDT

Welcome.

Greensborough

May 20, 2010 - 8:32 pm EDT

There are of couse many questions that taxpayers might be asking:

1. Just how much are we paying for this payola?

2. Has anyone estimated the additional infrastructure costs (schools, police and fire protection, etc.) of bringing in these new people in to our area?

3. How many of the jobs will go to Greensboro folks as opposed to out-of-staters or folks in Alamance and surrounding counties?

4. As a Greensboro/Guilford county taxpayer who started a business here 28 years ago with NO help from any government, why should I be excited

I now have to get back to work.

Greensborough

May 20, 2010 - 10:24 pm EDT

I have a suggestion. If North Carolina would reduce taxes (which of our neighboring states have income taxes or sales taxes as high as N.C's?), companies would not be as eager to leave - Indeed, I believe we'd see an influx of employers.

Payola was illegal in the record industry. Why is payola in the record industry different from states paying off companies to come ?

And it's a zero-sum game. And worse for taxpayers.

novel

May 21, 2010 - 5:16 am EDT

2nd paragraph of the article: "American Express has decided to locate a $400 million data services center in the eastern part of the county and agreed to do so without requesting any local financial incentives."

Later in the article: "The city will earn an estimated $1 million in annual property tax revenue from the facility when it is fully operational, Scott said. Guilford County stands to make two or three times that amount from property taxes on both facilities, he said."

The article also said the center will eventually employ up to 150 people.

What "payola" are you talking about?

Rolling

May 21, 2010 - 8:04 am EDT

Novel, don't confuse Greensborough with facts. His mind is already filled with Teaparty/Limbaugh poisoning and he's got his hands full repeating what he heard on the radio.

holland4

May 21, 2010 - 7:16 am EDT

Welcome -- again -- to Greensboro, American Express. Thanks.

I love how the local talking heads and bureaucrats immediately think "cha-ching" when a private company relocates or expands here. Tax revenue windfall extravaganza! It happens everywhere and in all localities of course, but it must weigh heavily on your self-esteem knowing that it takes someone else's innovation and productivity to keep you employed.

Rolling

May 21, 2010 - 8:06 am EDT

It wasn't a bureaucrat that immediately thought "cha-ching", it was a small business owner. Are you too poisoned from too much right wing radio?

Guess what, they pay taxes for services. Or did you think roads, sewers, transportation infrastructure and schools for the children of the employees was all free?

rmacz

May 21, 2010 - 8:22 am EDT

http://www.youtube.com/watch?v=Q59ZcFguUOo
Hope you enjoy it Rolling!

holland4

May 21, 2010 - 9:00 am EDT

Who is this small business owner you're talking about?

You and your fellow liberals are so economically naive. That's a dangerous character flaw when you're playing with other peoples' money. AmEx will pay many times over any direct benefit they'll receive in services. And that's not including the taxes paid by new employees. It's AmEx's investment in the buildings and job creation that will generate tax revenue. And all in a private industrial park no less.

Cha-ching.

novel

May 21, 2010 - 9:12 am EDT

GREENSBOROUGH is the small business owner. Read his posts above.

Rolling

May 21, 2010 - 6:09 pm EDT

Link please to your "facts" that Amex will pay many times over for the benefits they receive.

So the private industrial park will also pay for roads that lead to the park, the schools that will educate the students of the employees, the fire and police protection for the park, the water that goes to the park, the highways that lead to the park as well as the waste that comes from the park?

Turn off AM radio Holland and educate yourself.

InventorNC

May 21, 2010 - 8:58 am EDT

OMG: all the doom and gloom types give me a headache. I bet most of us are gleeful that an outstanding company like Amex has decided to plunk a huge pile of money into hard assets here in Guilford County. Plenty of other counties and states would love to have this plum dropped in their laps.

We have had so many successes in recent years - helping us climb out of the bomb crater left by the loss of the tobacco, furniture and textiles industries. Let us celebrate and quit the bellyaching.

Hooray for the North Carolina and hooray for the Triad.

FWIW: I'm a former (New England) Yankee who has lived in NC nineteen years. It can be nice there but not one morning passes that I don't thank God that I am here.

Green

May 21, 2010 - 9:06 am EDT

Greensboro commerical properties lease rates are very high, compare to national average. I compared with silicon valley rate, cheap to do business in those cities than in GSO. That is why high tech compaines are not willing to relocate to Triad.

gogso

May 21, 2010 - 12:14 pm EDT

A great announcement for Greensboro, Guilford County and NC. Unbelieveable their are idiots out there that want to nitpick this deal and be negative about a great asset coming to our area. You guys are unreal! MOVE, MOVE MOVE!!! GET THE HELL OUT OF HERE!!! Go climb back under your rock and LEAVE US ALONE!!!!

Rolling

May 21, 2010 - 6:11 pm EDT

I moved from Palo Alto 2 years ago and I'm in commercial real estate financing. You have no clue what you are talking about. Lease rates in "Silicon Valley" are at least 5 times as high as they are here. By the way, they are dropping here like lead balloons because of the high vacancy rates. Go to any office park in the county and count up the vacancies.

Green

May 21, 2010 - 9:11 am EDT

Probably high speed rail project will help Greensboro economy.
Bytrain.org - 40% discount.

InventorNC

May 21, 2010 - 9:26 am EDT

Green: OMG! And how are you gonna have high speed when the distance between stations is a few miles.

Ever heard of buses?

And have you checked out the loading on our many buses? Almost nil in case you haven't noticed.

InventorNC

May 21, 2010 - 9:21 am EDT

Green would you care to submit some hard fact? I have not compared lease rates but in real estate I am aware that a hovel in Silicon Valley will set you back at least a million. In the Triad we can buy a very decent home for 15 or 20% of that. I know - I looked, and settled here.

Silicon Valley has had the momentum for decades. Don't look for that to cease quickly, if only because the financial backers are there. And the attitude in California is far more adventuresome than here: we tend to fight new ideas - fiercely. I know - my inventions always fly on the Coast years if not decades before here.

We will change. It just takes time. And patience. In the meantime NC people are bedrock strong and straightforward - nice qualities to have in our neighbors.

Green

May 21, 2010 - 9:50 am EDT

InventorNC - I know a lot of my friends (few among the 1000) have lost their jobs in Greensboro during this economic disaster - travelling to Cary, Raleigh and Charlotte keeping their home & family in GSO. I don’t think we have such a bus frequency – in I-40 & I-85 corridor -frog in a well - Used to describe a situation or individual who cannot or refuses to see the big picture because of being sheltered…

sladejone11

May 21, 2010 - 10:22 am EDT

Am I missing something here?

“Has anyone estimated the additional infrastructure costs (schools, police and fire protection, etc.) of bringing in these new people in to our area?”

"Guess what, they pay taxes for services. Or did you think roads, sewers, transportation infrastructure and schools for the children of the employees was all free?"

I thought the whole point of wanting AXP to come here was to provide jobs to our community. Are some people here expecting that AXP provides their own infrastructure since they’re the *jerks* bringing jobs to the area and straining our infrastructure??

Rolling

May 21, 2010 - 6:16 pm EDT

No, the county should provide the infrastructure and AMEX should pay taxes to offset those services, which by the way they are going to do. There was a post further up by Greensborough that would indicate that the county only thought about the taxes and that he, as a small business owner would benefit by paying lower and or no taxes. My response was to the fact that those taxes pay for things that many people, especially right wing nutjobs, simply take for granted because they only think about themselves.

Green

May 21, 2010 - 10:31 am EDT

We need to welcome AXP, since a lot of our kids coming out of UNCG, GTCC and other schools with major/minor in technology areas, need to land some where.

Rolling

May 21, 2010 - 6:20 pm EDT

Agreed and the fact they are doing it without asking for corporate welfare says a lot about their management. I welcome AMEX and its Progressive business practice in this case. By the way, a liberal runs AMEX for all you right wing nutjobs out there. He's being responsible, unlike many that running large companies today.

http://www.newsmeat.com/ceo_political_donations/Kenneth_Chenault.php

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