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Hewlett-Packard lured to Gwinnett

LAWRENCEVILLE - Gwinnett County commissioners reeled in their first big economic development catch: a $240 million business investment with 140 high-paying jobs from Hewlett-Packard.

The bait - $8 million in county, school and city property tax breaks and $25 million in state sales tax exemptions - was enough to land a data center for the Fortune 500 company on Satellite Boulevard in Suwanee.

Officials said the county's new economic incentives program gave Gwinnett an edge in negotiations Wednesday, the day California-based Hewlett-Packard announced it would open two data centers in metro Atlanta. The other location will be in Alpharetta.

"It's good to have them locate into Gwinnett," Chairman Charles Bannister said. He said the company contacted Gwinnett in November, two months before commissioners signed off on a potential inducement package.

"We knew they wouldn't have come here if they could go to Cobb County, where they had the incentives," he said. "We decided to move posthaste with establishing the program."

Hewlett-Packard officials would not comment as to whether the county would have been considered without the incentives, only saying the package was "a piece of the decision."

"The state and the communities involved in this project worked together to ensure that we had all the information we needed to make this decision," the company's government affairs manager Carlos Cardoso said. "We look forward to bringing these data centers online and providing our customers with the service they are accustomed to from HP."

The Gwinnett Development Authority voted Monday to issue taxable bonds on the building and equipment at 120 Satellite Blvd.

Economic Development Director Alfie Meek said the deal is worth it because the county is only abating about half of the expected economic impact of the data center or $1.6 million.

He said the company would pay an average of $300,000 in property taxes for each of the 10 years of abatement and other economic benefits would add another $500,000 to the county each year - "not to mention the taxes they will pay after the 10 years."

State officials sweetened the deal, with the governor announcing both data centers as the second largest incentive package in state history.

"Atlanta is a hub for telecommunications and information technology, so it is not surprising that a great company like HP would choose Georgia," Gov. Sonny Perdue said. "HP's investment means the company is committed to being a member of Georgia's business community for a long time to come."

Bert Brantley of the Georgia Department of Economic Development said the company qualifies for an $875,000 job tax credit on corporate income taxes for the first five years for the Suwanee center.

Because Fulton County is considered a less prosperous county by state statutory guidelines, the company will get a job tax credit of about $2.1 million for the Alpharetta branch.

The largest portion of the incentive package, according to Brantley, is a sales tax exemption on equipment purchased for the new centers.

In total, the state is expecting a $25 million exemption - well above the $14 million given as part of the deal to bring a Kia plant to West Point, which was the largest incentive package in Georgia history.

Brantley said the state has also set aside a $750,000 grant to help with purchasing either land or a building. While the grant is expected to go to Gwinnett, Brantley said that detail was unclear.

According to Suwanee Mayor Nick Masino, the company received a permit to begin alterations at the Satellite Boulevard site about 45 days ago.

He said the tax break isn't a great deal for Suwanee because the average household wage in the city is $95,000, well above the $60,000 wage the data centers are expected to bring.

But the city will get a large franchise fee based on the large amount of electricity used in data centers.

"This is a big win for Gwinnett County, and it's a win for Suwanee because of the franchise fees," he said. "A lot of us have felt for a long time that Gwinnett should have been focused less on residential and more on commercial growth."

While Gwinnett is still considered a leader in the Georgia economy, officials became concerned several years ago when a recession hit local businesses.

While the number of jobs continued to rise, high-paying technology jobs were replaced with lower-paying service sector and sales jobs.

In the past several years, the county's tax base has tipped toward homeowners bearing the tax burden instead of businesses.

So, late last year, county commissioners agreed to offer economic incentives for the first time since growth erupted in the 1970s and 1980s.

Because incentives meant business property taxes could be taken off the county's rolls, officials made the standards for qualifying for incentives high - the company had to offer jobs at least 11⁄2 times the county average, or about $60,000.

Plus, the county has provisions that stipulate the company must pack back any abated taxes if it fails to make the economic commitment it agreed to.

"This move helps to ensure the continued high quality of life for Gwinnett citizens," said District 1 Commissioner Lorraine Green. "When companies like HP locate here, they not only bring the jobs and investments directly associated with their company, they also bring a demand for goods and services, which strengthens other Gwinnett businesses."

Economic development officials said they hope that Gwinnett's first big incentive package leads to even more business growth in the county.

"It is exciting to have one of the world's largest corporations joining our already strong technology sector in Gwinnett," said Gwinnett Chamber of Commerce President Jim Maran. "We also appreciate the leadership the county took in providing tools to help us bring companies like HP to Gwinnett. Without the new economic development ordinance, this project would not be located in Gwinnett County."