Google sweetens the deal for proposed Hermantown data center

Google has put forward a new draft development agreement and tax abatement plan for its proposed 1.2-million-square-foot data center in Hermantown, Minnesota. The technology giant aims to make the project more appealing to the city and its residents, particularly as it faces renewed environmental review and organized opposition from citizens. Under the proposed deal, Google has offered to finance approximately $130 million in necessary public infrastructure, including water and sewer extensions and road improvements. City Administrator John Mulder stated that Google would build these systems to city specifications and then transfer ownership and maintenance responsibilities to Hermantown. Economic Development Director Chad Ronchetti noted that this infrastructure would also unlock future growth opportunities for the city, as identified in a University of Minnesota Duluth study. In return for this investment, Hermantown plans to offer Google a tax abatement worth an estimated present value of $33.5 million over 28 years. The school district, Independent School District 700, would be a major beneficiary, receiving an initial $850,000 annually from Google, escalating to over $2 million by the final year, totaling around $40 million. While the city would collect only 15% of its normal property taxes, Ronchetti estimates this still amounts to about $450,000 annually upon full build-out. The agreement also includes job creation clauses, requiring at least 40 full-time positions initially, increasing to 120, with salaries at least 20% higher than the average county wage.