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Google-NASA Partnership Backlash 270

Posted by ScuttleMonkey
from the everybody-wants-a-piece-of-the-pie dept.
Morgalyn writes "Apparently having more jobs moving into the area isn't enough for Santa Clara County. They want some revenue from Google, and are peeved that they are avoiding paying property taxes by building on government land. According to a representative of the county, 'If public land is being used for private purposes, the tenants should be paying local property taxes... We have $30 million in unfunded retirement liabilities. We need the money.' They aren't getting the land for free according to NASA: 'Google will not save any money by building on our property. They have to pay full ground rent based on fair market value and all the municipal-like services we provide like police, fire and garbage.'"
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Google-NASA Partnership Backlash

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  • by HugePedlar (900427) on Sunday October 02, 2005 @08:09AM (#13697805) Homepage
    I suppose if they find government land tax too much of a burden they could always try here: http://www.lunarintl.com/ [lunarintl.com]
  • by Oh the Huge Manatee (919359) on Sunday October 02, 2005 @08:12AM (#13697814)

    From this morning's San Jose Mercury News (URL: http://www.mercurynews.com/mld/mercurynews/news/12 798126.htm [mercurynews.com] )

    Is Google's NASA campus a search for a tax break?

    By Jessica Portner and Julie Patel, Mercury News

    Just how sweet of a deal will Google get by building a major research park on a so-called federal enclave at Moffett Field that sits just beyond the reach of local tax assessors?

    Depends on whom you ask and how you slice it.

    NASA/Ames Research Center's Michael Marlaire bristles at the suggestion that his agency's planned partnership with Google, unveiled last week, would provide a tax shelter for the Mountain View-based Internet giant.

    Terms of the deal are in the works, but Marlaire said Friday that Google would help build the 1 million-square-foot project, upgrade infrastructure, pay fair-market rent and shell out about $4.5 million a year to NASA/Ames for services, such as fire, police, sewage and other utilities.

    ``I don't want people to think they are coming here for a sweetheart deal. That is not what is happening,'' said Marlaire, Ames' director of external relations. ``Google isn't going to save a dime for coming here.''

    The company might pay less, however, if it builds services that other Ames tenants, such as universities and small tech start-ups, could use, he said.

    Still, some local officials, such as Santa Clara County tax assessor Larry Stone, say such a setup would cost local taxing bodies like schools, nearby cities and the county up to $3 million in annual property tax revenue.

    Google pays about $850,000 in annual property taxes on the 34-acre site it leases in Mountain View for its world headquarters, Stone said. The company would escape paying local property taxes by building its research center and up to 2,000 homes in NASA's research park, which sits on part of the former military base that local taxing bodies can't touch. State and local tax rules are invalid on land classified as a federal enclave.

    Bustling neighborhood

    NASA/Ames envisions a bustling 95-acre neighborhood to sprout up around the park -- complete with shops, cafes and parks -- where the chatter on the street is nanotechnology and supercomputers. Like a McDonald's and other shops already located on Moffett Field, those retailers also would probably be off-limits for local taxes, Stone said.

    NASA has already prepared a 900-page environmental impact report that paves the way for the project. Mountain View officials will watch closely from the city right outside NASA/Ames' gates. But they won't have much say over the process, which the federal government alone controls and laid out in a 2002 study on the proposed mega-R&D campus.

    Bayfront property

    NASA's review looked at environmental impacts on air, land, water, traffic and storm water, as well as other issues. It calls for on-site housing and bike paths to reduce congestion and pollution, but environmentalists worry that NASA will overlook many of the ecological and traffic issues on the sensitive bayfront property.

    ``Nothing against Google, but this plan would have significant impacts,'' said Lenny Siegel, executive director of the Center for Public Environmental Oversight.

    Mike Braukus, a spokesman at NASA headquarters in Washington, said the Google project appears to be the biggest of its kind for NASA, whose leaders say they want to transform Ames into something akin to a Silicon Valley company. The two sides have set a February deadline to arrive at a final deal.

    Google would join university research groups and small start-ups that also rent space from Ames. Most pay about $4.50 per square foot a year for police, fire and other services.

    Randy Nickel, the founder of Nxar, a start-up software company that rents a tiny workspace of a few hundred square feet at Ames, said his company's one-year lease

    • I guess it depends on who really benefits.

      I think in most cases, property taxes are collected by the local municipality, and it's really their primary form of income.

      Sales tax is usually state-wide. So all that added commercial activity in the area is going to California, not the local municipal governments.

      Paying NASA is just paying NASA.

      The city is now going to have to deal with issues such as increased traffic, upgrading public utilities, etc., and they're not going to get the money to handle it. I'm n
      • by John Jorsett (171560) on Sunday October 02, 2005 @11:31AM (#13698465)
        I think in most cases, property taxes are collected by the local municipality, and it's really their primary form of income.

        Sales tax is usually state-wide. So all that added commercial activity in the area is going to California, not the local municipal governments.

        Actually, post-prop 13, the state ends up with the property tax revenue. The state doles it back, less its 'cut' to the counties and cities, though some are "more equal than others" in what they get. What the counties and cities get is most of the sales tax. That's why you see cities doing everything humanly possible to get more retail businesses built: they get more sales tax revenue for every one of those.

        Paying NASA is just paying NASA.

        Paying NASA is paying the federal taxpayer. I don't know about you, but I pay lots of federal tax and anything that reduces federal deficits I'm in favor of.

        The city is now going to have to deal with issues such as increased traffic, upgrading public utilities, etc., and they're not going to get the money to handle it. I'm not surprised that they are ticked off at this.

        The city is going to get lots of new, very high-paying jobs. Those people will pay sales tax, buy homes and pay property tax, and in general add to the prosperity of the area. The city is getting a good deal, on balance. However, like many governmental entities in California, they've also bloated their payrolls and overpromised on their benefits, so they think it's up to taxpayers to bail them out. Rather than cut payroll or benefits to fit reality, they're looking at any way possible to shake more money out of the pockets of the people. That's why they're ticked that somebody might be able to escape their clutches.

        Google is winning big, and at the expense of the local people.

        Exactly the opposite.

      • That's a bit of a simplified view of the picture isn't it? As the article stated, increased traffic leads to more business and more businesses. Both of these contribute to the local economy which help funds the local taxes. The price of land and homes in the nearby will be raised due to the influx of new jobs and businesses. The local owners of homes will see the price of their homes increase even more.

        The thing is Mountain View is complaining because they're seeing potential revenue that they aren't goi
    • by surprise_audit (575743) on Sunday October 02, 2005 @08:47AM (#13697893)
      Still, some local officials, such as Santa Clara County tax assessor Larry Stone, say such a setup would cost local taxing bodies like schools, nearby cities and the county up to $3 million in annual property tax revenue.

      Now, see, that's the bit I have trouble with - it's going to cost Santa Clara $3M?? The land/buildings/whatever wasn't being used anyway, right?? If NASA went out and acquired the land specifically to rent it to Google, then OK, I'd see their point. If NASA's owned the land for a long time, it's entirely up to them who uses it.

      Even if Google was going to give up some other property in Santa Clara county to make this move, that other property would still exist and garner property taxes for the county.

      WAh, wah, wah, bitch, whine, moan. We have a right to that money. It's ours, and Google's stealing it by using NASA property. Moan, bitch whine.

      • by aussie_a (778472) on Sunday October 02, 2005 @09:30AM (#13698017) Journal
        it's going to cost Santa Clara $3M??

        Looks like the government's caught onto the business use of "cost."

        "By going open-source, Linux users are costing Microsoft untold millions. They should all be forced to pay for a Windows license."

        Unfortunately, Microsoft has made good headway in making Linux users pay the Microsoft tax.
        • A better analogy would be someone who buys a cheapo Linux-only computer from Wal-Mart and then installs an illegal copy of Windows on it. We can get into Stallmanist hairsplitting about whether that "costs" Microsoft anything, or whether it "costs" Santa Clara to have a for-profit company appear on untaxed land, but it seems clear to me that both represent abuse.
          • But they arn't getting illigal land. This is like you moving to the edge of a county into another county and the county complaining that you arn't moving onto their land. This land is effectivly its own county and provides its own fire/police/etc services. Just because it physically exist within the municipal county is meaningless.
      • Try getting to NASA's research center without going through Santa Clara. Having increased traffic on roads costs money to maintain. Money they usually get from property tax.

        As well how do you think NASA deals with sewage, water, garbage, etc? They have a contract with the nearest municipality to: attach to their water system, their sewage system, and probably dump on their dump. All of these things will be used to a much greater extent than was ever envisioned with just NASA on the property.

        Just b
        • Try getting to NASA's research center without going through Santa Clara. Having increased traffic on roads costs money to maintain. Money they usually get from property tax.

          How is this different from (for example) people in Santa Monica driving through Beverly Hills to get to downtown Los Angeles? Or any one of thousands of similar traffic situations throughout the country? Besides, most traffic to Moffett Field, unless it's from very close nearby, comes in off Highway 101. 101 is maintained by CalTrans

        • As well how do you think NASA deals with sewage, water, garbage, etc? They have a contract with the nearest municipality to: attach to their water system, their sewage system, and probably dump on their dump. All of these things will be used to a much greater extent than was ever envisioned with just NASA on the property. Just because you don't see the costs clearly doesn't mean they aren't there.

          If the feds have are contracting with the city for these services, then it's being PAID FOR! And if you think

      • If NASA's owned the land for a long time, it's entirely up to them who uses it.

        Yes, it's been government land for a long time -- it's an old Zeppelin base from WWI.

        And I certainly don't think it's "entirely up to NASA" -- NASA is only acting as stewards for the public with this land, and it's their responsibility to act in the public good.

        Is letting Google build an office park in the public's best interest? You have to go and visit the area -- it's entirely surrounded by hundreds and hundreds of office par
      • I was going to make a comment about that exact part of the article. It really an interesting choice of words. The setup would not "cost" the county anything. That $3 million is potential tax revenue "not gained." I don't think this is a matter of semantics because using the word "lost" gives the impression that the tax payer is losing money by this development instead of not gaining revenue if they built on local land.
    • The municipality is whining that they have unfunded pension liabilities - sounds like they are not competent to manage their financial affairs, and they're whining and trying to shift the blame. NASA is making it clear that google is paying them for for services that the minicipality would otherwise provide. Why should google pay twice, once to NASA and once to the municipality?

      • I would be willing to bet that these unfunded pension liabilities were a result of pension changes made in favor of employees during the Internet bubble. The county in which I live is facing bankruptcy because it made changes based on anticipated growth that expected the bubble to continue forever, and now is $2.3 billion short of what it needs to fill existing pension obligations.
      • I noticed that too. It's like saying--well, we missmanaged our money before so now we need you to bail us out. There is just one time cost savings in not paying pension liabilities, so they were essentially spending too much or not taxing enough (read pandering). This publicity stunt looks to be along a new but alo pandering line--don't fix the problem, blame someone else.
    • ``The taxes are substantial, but it's just a piece of the puzzle,'' he said. ``The millions lost by the county could have been hundreds of millions if they built in Oregon...''

      Heck yeah. Move it to Oregon! We'll find you a beautiful patch of land, and give you the tax break of the century the way we already have to Intel and Nike. We have plenty of geeks here who are plenty competent, and can really use the work. Heck, Google already has a new facility in the works in The Dalles; add it to that.

      Go

  • by ScentCone (795499) on Sunday October 02, 2005 @08:25AM (#13697842)
    First, there are all sorts of government facilities (or, "public land", per the article) in/on which private companies ply their trades and make money. Every company with contractors present on an Air Force base is using a footprint there to do their private-sector business. There are whole buildings in federal campus-type areas, or large swaths of office space essentially subletted to private companies so that those companies can do what it is the taxpayers are paying them to do for the agency that's hired them. This is hardly new.

    Further, most towns with any sort of federal activity would be delighted to hear that a bunch of high-end nerds from Google were moving in. It's not like they (the Google people) are going to live on the public property. These people are going to be buying coffee at Starbucks, eating out at restaurants, buying their kids' school supplies, etc., and that's all economic activity for the local communities.

    It's a shame that the locals have such a huge unfunded retirement liability (um... I suspect there's a little more to that story than gambling that someday Google would move in and pay a lot of property taxes, and darn, it didn't work out), but there's another way to look at this. Google may not even have lined this gig up if they'd have to had built on private land and passed all of that expense, through the contract, on to NASA as a higher cost. Even if the deal had still gone through, it just would have been a bigger tab for the feds (meaning all of the rest of us) or less for NASA to spend on other things. In the meantime, only the locals get the other local economic benefits of having those new G-men/women moving into the area.

    Sorry, but I smell a grasping local government that has just won the demographic lottery of having this happen in their area at all, and want to grab some more cash out of the deal to make up for what sounds like retirement fund planning sins of the past. Personally, I'd welcome a larger Google Presence in my area - it would raise the local IQ average by a couple of points, and make the area that much more attractive to other tech ventures... no matter which square feet of what bit of (unused!) federal property is being used to house the activity.
    • > It's not like they (the Google people) are going to live on the public property.

      The company would escape paying local property taxes by building its research center and up to 2,000 homes in NASA's research park,
    • This is a lame excuse. With your argument no businesses should pay taxes since they bring people and people pay for lots of other things the community will benefit from.

      Its wrong because its not balanced. Its always hard to argue against stuff like this because businesses shouldn't pay taxes at all. Were always put into the position of arguing for taxes out of fairness because we the people pay them and are tired of special treatment for businesses. But we shouldn't pay them either. I wonder if google
      • This is a lame excuse. With your argument no businesses should pay taxes since they bring people and people pay for lots of other things the community will benefit from.

        Actually, that's not a bad way to look at it. Businesses are nothing but people, after all. No people, no business.

        But that's not what I'm getting at, anyway. My point was that there are plenty of businesses that perform services for the federal government, and avoid some expenses by leveraging land or facilities run by the government.
    • This comment is completely ignorant of the realities of what is going on. The Moffet complex recently had most federal functions taken away which is why the land is being used now for other purposes. Google grew in the valley and would almost certainly put most of its expansion in the valley, so there is none of this luring business with tax incentives junk that usually goes on. Businesses themselves have been campaining for bigger freeways and more light rail such as recently installed in this location,

      • This comment is based on a thorough misunderstanding of local history, politics, services, and commercial activity in this area.

        No, this comment is in response to the editorial choices made by the poster, who (if you read the summary), practically implies that Google is looking to leech off of the local taxpayers, and that somehow what they're doing there won't benefit the local community or increase the activity of the local economy. How can expanding what they're doing locally not, though countless pro
    • Personally, I'd welcome a larger Google Presence in my area - it would raise the local IQ average by a couple of points, and make the area that much more attractive to other tech ventures...

      I understand what you are saying in theory. However, although you qualify your statement with "in my area", I'm guessing you aren't familiar with the geography of the area that is being discussed. By making a move to Moffett, Google is literally moving down the street. They are already located in Santa Clara (read: Si

  • Benefit and loss? (Score:5, Interesting)

    by plnrtrvlr (557800) on Sunday October 02, 2005 @08:32AM (#13697860)
    OK, so Google isn't locating it new venture on public property, and the article seems to indicate that it wont be using any public services It is unclear (by the article) who will be providing actual sewage services, though it does state that Google will have to construct them. Has anyone in the county bothered to do a benefit and loss comparison with what remains? How many new employees will be purchasing fuel, lunches, snack food, stopping for groceries on their way home, paying sales taxes as they do? How many people will relocate to the area and build new homes, paying property taxes and school taxes? How many new jobs will be created in the service economy of the area to support these people working and moving to the area? Here in upstate NY it would be afairly safe bet that most any town/county would welcome an arrangement where a large company movs to the area, doesn't consume services and so doesn't pay for them, but adds significantly to the local tax base in terms of jobs and consumption. Think about it, If it is such a terrible deal for the area, then why would they even want the Ames research facility there inthe first place? Why would any town, county or state want any government installation located within their borders? Most places with a military base near them shudder at the thought of a base closing, and it's because such bases contribute greatly to the local economy without adding to the service load. Furthermore, most places meter such services as water with a built in assumption of "what goes in must come out" and bills the water and sewer together based upon that assumption. Somebody needs to get their facts together as to what new jobs will be created and do a side by side benefit and loss comparison before they start screaming about the lack of tax revenue. One million square feet of development could easily employ enough new people to more than make up for the property tax loss.
  • by Morgaine (4316) on Sunday October 02, 2005 @08:37AM (#13697871)
    They want power, by having people and companies dependent on local infrastructure.

    And they want money through taxes, which equates to power for them to implement whatever *they* want. The near-zero regard that politicians have for the wishes of the people who elected them is almost universal.

    I hope Google tell them to take a running jump.

    The issue of Google not contributing to the building of extra transport infrastructure for 4000 jobs is easily handled, and it's not just specific to Google. All large corporations should be expected to make good use of teleworking and office hot-desking wherever it is desired by the workforce and feasible in the business, as it certainly is in IT. In a networked age, a company's whole IT staff driving in at 9am and home at 5pm is just plain nuts.
    • ok.. you work in IT department, when is the last time you drove in at 9 AM and drove home at 5 PM? I work in IT department and I only heard of such myth by my parents back in 1960's.
      • I'm not an IT professional, but I also do work which requires a lot of thinking: I do research in physics. I work 8 hours a day, period. Not a minute more, unless something seems captures me very strong and/or I have a deadline very near. I find I'm as productive as if I were spending 10 or more hours a day on work.

        Human brain cannot be forced to work equally good for abritrarily long period. People who think they'll do more work by spending all day at work, are either doing mechanical tasks or confusing th
      • you work in IT department, when is the last time you drove in at 9 AM and drove home at 5 PM? I work in IT department and I only heard of such myth by my parents back in 1960's.

        Odd. I worked in an IT department, and for the most part, I worked 8 hour days, though it was more 10a-6p because I liked to sleep in (that wasn't your point, was it?). Sure, I might occasionally have to do stuff outside of those hours, but it was the exception rather than the rule.

        This was even the case when I was the enti

      • Practically everyone who responded to the parent post focussed on the 9-5 timekeeping or on the number of hours worked. That wasn't the point being made at all, but the fact that the majority of IT workers are expected (by a very large majority of companies) to commute in to work, and that puts load on the transport infrastructure.

        The rush hours around 9am and 5pm aren't the only points of the day that matter. Driving at any time of the day has a wear and tear effect on the tarmac for example.

        If you want
  • by layer3switch (783864) on Sunday October 02, 2005 @08:41AM (#13697876)
    "We have $30 million in unfunded retirement liabilities. We need the money."

    So when local government/state government fail to meet the obligation to its citizens, wait until Google land on your town and milk it for what it's worth?

    Oh, I can see it now... "Eric Schmidt for Mayor!"
    • by ZoneGray (168419)
      Politicians see money, politicians want money.

      Shucks, I have a couple hundred thousand dollars in unfunded retirement needs, but I sure as hell don't expect Google to give it to me. Their search engine might help me earn it, though.
    • "We have $30 million in unfunded retirement liabilities. We need the money."

      Wouldn't it be nice if government considered things like this before they promised the money to someone else? Good thing the city didn't promise the money to loan sharks. Or maybe by the tone of that statement, they actually did...
      • Good thing the city didn't promise the money to loan sharks.

        I think it would be better if they had promised it to loan sharks. At least then there would be a good chance the fuckwitted local gummint officials would get their legs broken, or worse.

        Hey! Maybe this could be a workable way to control local expenditures! Require that local gummints borrow their money from and lodge their pensions with the Mafia. Then it becomes a self-limiting process, since the local officials only have so many legs t

  • by putko (753330) on Sunday October 02, 2005 @08:48AM (#13697894) Homepage Journal
    This is how the system in the USA works. The idea is that local communities can't tax the Feds or impose regulations on them. Otherwise they clearly would, and it would lead to chaos. E.g. the City of Berkeley would tax the hell out of the Feds, until they agreed to make the whole country a nuclear free zone, or cut off all business with Myanmar (Burma). That's how things went after the Revolution and until the formation of the United States -- there was terrible fights like this between states and the feds.

    So the feds have property that they control. Then they turn around and provide this to private companies (typically contractors). Theoretically, because the contractors get the services for free, the market price of the rent should be higher. E.g. suppose a contractor has a choice: fed property or a neighboring plot that is otherwise the same, but comes with taxes. The market price of the fed property will be higher by the cost of the crap that the company avoids.

    Google theoretically shouldn't save any money by doing its stuff on govt property: the price should be higher than on state-controlled or country-controller property, all things being equal.

    Onen neat place to see this is the NV/CA border on Lake Tahoe. The same pile on the NV side costs more, because taxes are lower.

    So the "problem" is due to the law, not Google. Unless they get that property for below-market costs (perhaps due to corruption), there's nothing awful going on here. Perhaps you think we need to change our constitution to make it possible for states to tax the feds, but that's another issue, and it doens't involve Google.
    • The idea is that local communities can't tax the Feds or impose regulations on them. Otherwise they clearly would, and it would lead to chaos. E.g. the City of Berkeley would tax the hell out of the Feds, until they agreed to make the whole country a nuclear free zone, or cut off all business with Myanmar (Burma).

      There's no fundamental reason why the local governments couldn't (if that was the law) tax federal land. Perhaps there would be some friction, but whenever one entity is charging another entit

  • by whoda (569082) on Sunday October 02, 2005 @08:49AM (#13697897) Homepage
    We have $30 million in unfunded retirement liabilities.
    Piss poor planning on the part of Santa Clara county doesn't make this mine, yours, or Google's problem.

    If they want/need more tax income, they can go and get Prop 13 repealled. Freezing a giant part of the states tax income, and then trying to increase services year after year is not a winning plan.
    • Freezing a giant part of the states tax income, and then trying to increase services year after year is not a winning plan.

      Or - hold on, here comes the craziness - they could just stop spending more money. My boss put his own Prop. 13 on me: I can't just arbitrarily increase the income I collect from him. I can and do adjust my spending according to how much is coming in, though.

      But that's just me and my obvious failure to grasp economic laws that affect individuals but never governments.

  • by jmulvey (233344) on Sunday October 02, 2005 @08:50AM (#13697898)
    The federal government, much less NASA, doesn't get local tax exemptions so that they can rent the land to corporations. And just because NASA is charging them "full price" rent, doesn't mean they will when some other corporation that makes the "right" campaign contributions will have to pay "full price".

    This arrangement is not fair to the other corporations in the city, and it's not what federal tax exemptions were designed for.
    • Because they don't own the land. Any property taxes due are payable by the owner, not the renter. You want to make an exception just for Google? Idiot.
    • The federal government, much less NASA, doesn't get local tax exemptions

      No, you don't get it. The federal government doesn't get tax exemptions from local government -- federal property is simply not subject in any way to State or local tax jurisdiction. That means that federal property is not taxable by State or local authorities and operations conducted on federal property by the federal government, such as, say, a supermarket for federal personnel, owe no sales or income tax to the city, county or

  • by WetSpot (874382) on Sunday October 02, 2005 @08:55AM (#13697909)

    When public entities whine that they don't have enough money to pay for everything they want to have, and they need more. Especially, when it's thosedamn capitalists who aren't paying enough. errrrgghh!

    I don't have enough money for everything I would like, either. As a result, I match my spending with my real income. Perhaps the Santa Clara County official needs to learn the concept of Opportunity Cost [wikipedia.org] before they whine about their productive citizens not paying enough!

  • by RWerp (798951) on Sunday October 02, 2005 @09:11AM (#13697941)
    Imagine such article published on Slashdot:

    "Apparently having more jobs moving into the area isn't enough for Redmond. They want some revenue from Microsoft, and are peeved that they are avoiding paying property taxes by building on government land. According to a representative of the county, 'If public land is being used for private purposes, the tenants should be paying local property taxes... We have $30 million in unfunded retirement liabilities. We need the money.' They aren't getting the land for free according to NASA: 'Microsoft will not save any money by building on our property. They have to pay full ground rent based on fair market value and all the municipal-like services we provide like police, fire and garbage.'"

    Can you imagine that? Because I can't. Slashdot has become a Mouth of Google.
    • Good point, but the difference here is that Microsoft can make up for the tax loss by increasing or "extoring" local government's OS/server license cost at expense of tax payer's money.

      Either way, it's not about MS or Google. It's about local government officials looking at their own interests in short sighted manor with disregards to their obligatory responsibility to citizens and what they represent.
      • "Good point, but the difference here is that Microsoft can make up for the tax loss by increasing or "extoring" local government's OS/server license cost at expense of tax payer's money."

        I fail to follow the logic. It's OK to rob a monopolist because he can compensate for it?
  • Are companies forced to pay up for building on government land through a deal with such an organization, or not?

    I mean... This isn't (or rather shouldn't be IMHO) about whether they "want" or "need" Google's money or not.

    The article makes it sound like there isn't something preventing Google from doing that, and in that case, stop bitching and try change the laws instead of Google.
  • The tax base in that area is so bad. Home prices are in such deep decline. A parking space goes for $2 million. Who will think of the politicians?
  • by tkrotchko (124118) * on Sunday October 02, 2005 @09:25AM (#13697990) Homepage
    If google is *renting* the building, how would they be liable for any special taxes related to coming to the county?

    I get that by moving to a federal building on federal land they don't get money from the federal government for property tax.

    But think of the alternative. Google rents some space from "Joe's Management Company". There still is no additional revenue from taxes. I'm not a tax expert, and I can't even spell "CPA", but this article seems to have a flawed premises.
    • I'm not sure what the laws are at Google's new location, but here in Connecticut business property is taxed in two different ways.

      First of course is the actual property itself (the land and the building) second is the assets the company owns. The building and land taxes are typically paid by the owner of the building and passed onto the tenant in their rent. The other property is billed directly to the tenant.

      My business owns a building that is leased to a manufacturer of sporting equipment. We pay t

      • "I'm sure there are literally millions of dollars in computers being moved into that facility."

        I'm not so sure.

        Google's paradigm is centralized computing, probably not within this facility. At best, they'll lease some office equipment, desks, etc. Seems to me there isn't going to be anything to tax.

        Google's value is not in its physical assets, but in its people. I don't see anything for the county to tax here.
      • I'm not sure what the laws are at Google's new location, but here in Connecticut business property is taxed in two different ways.

        I don't know the law in Google's new location, either, but you seem to presume that all States are personal property tax States, like Connecticut. That's a false presumption. In fact, your neighbor, New York State, has no personal property tax.

        California is, it happens, a personal property tax State, but it's not at all clear to me that the tax is applicable to personal p

  • by mr_tommy (619972) *
    Right, so anyone else wondering if rent / land costs are one of the smallest parts of the google expense bill?
  • by Crixus (97721) on Sunday October 02, 2005 @09:42AM (#13698063) Homepage
    Apparently it's OK to give Walmart tax-free access to land to build ugly stores with low-paying jobs, but it's not OK to do this?

    Our system is incredible. People can't afford to pay their bills and taxes, and cities need the tax revenue.

    This will all reach critical mass within the next 50 years, and it will be ugly.
  • by meehawl (73285) <meehawl,spam&gmail,com> on Sunday October 02, 2005 @09:49AM (#13698091) Homepage Journal
    Moving onto "federal" land to dodge local responsibilities is as old as the hills. Or last year, in fact, if you consider the relocation of the George Lucas Dark Empire into the federally owned Presidio in San Francisco. By doing this, Lucas manages to dodge paying local, state and city payroll taxes. Meanwhile, it gets to rent out around 200,000 square feet of its Presidio space. If it gets a high market rate of $30 per square foot this will bring in maybe $6 million a year -- $200,000 more than the rent Lucas will pay for the entire 23-acre lot. And of course, it then gets to dodge local and state taxes on rent profits as well. Swete deal for everyone except the citgizens of San Francisco.
    • Swete deal for everyone except the citgizens of San Francisco.

      So, how much money would SF get if Lucas finally gave up on the rampant local governmental stupidity and moved to a saner locale instead? Seems like a few percent of something is better than zero percent of nothing.

      • rampant local governmental stupidity

        Find me a borough where everyone is happy with all of the decisions and activities of their local government, and I will show you Elysium.

        If you are going to live in a city with many different cultures, ethnicities, and lifestyles, then you should expect a city government that reflects that diversity. And of course, many of the things they do will strike you as bizarre, ugly, or stupid. Just as, presumably, many things you do appear to others.

        If you want a homogeneous cit
  • "Hey, whoah. You're creating a magnet to draw a ton more six-digit income workers and Google stock millionaires into our tax base. What's in it for us?"
  • So let me see if I understand it - this is merely a more nakedly obvious example of the government which we empower to tax us, showing that its only concern is revenue.

    Anyone see a conflict of interest there? Would you give your landlord the LEGAL power to not only set your rent, but compel you to pay it (and you have no real chance to evade it by moving elsewhere)?

    Tangetially, this is the problem with an estate tax...personally, I have a serious issue with a government that directly PROFITS by the death o
    • Tangetially, this is the problem with an estate tax...personally, I have a serious issue with a government that directly PROFITS by the death of its citizens.
      Well, if you can be 1099'd for stealing cash out of the till, you pay top tax rate for any gambling/lottery winnings over $10,000, etc...

      I don't have a problem with the estate tax, but it should be paid by the inheritees, not out of the estate. It's windfall income, just like capital gains, stock dividends, etc.
  • Cry me a river (Score:5, Interesting)

    by hotspotbloc (767418) on Sunday October 02, 2005 @10:26AM (#13698227) Homepage Journal
    Greg Perry, a member of the Mountain View City Council, echoed that sentiment. "If public land is being used for private purposes, the tenants should be paying local property taxes," he said. "We have $30 million in unfunded retirement liabilities. We need the money."
    Over the last few years the real estate prices in Mountain View have skyrocketed almost solely because of Google and their cash rich employees (like $2m USD for a nice three bedroom house that would cost ~$400k in a typical "farm belt" community of the US). As prices rises, surrounding values rise and real estate tax revenue rises (to a certain point). Mountain View is now enjoying a major cash influx but yet they want more like most other government entities.

    The conflict echos of many past economic conflicts: Company A (the City of Mountain View) is well seasoned, controls the market and has become fat, lazy and leech-like from the lack of competition. While they do many good things they are unwilling to fix the major flaws that are bleeding them dry like, for example, a vastly overstaffed police department unwilling to cut a single position. Company B (Google) is the new upstart, flexible and lean, that is creating wealth for themselves and those that support them. The City of Mountain View has seen quite a few local businesses created to support Google and Google employees that generate millions of dollars each year in tax revenue.

    It's a bit like the City of Cambridge, MA vs. MIT and that other school. While they do pay into the local coffers what would be a somewhat appropriate tax for their real estate the City still wants more. But what would Cambridge be like without them? How many local businesses with their high paying research jobs would be there without the talent these schools recruit? While these schools generate less direct tax revenue from their properties then their commercial counterparts they do generate, IMO, much more overall indirect tax revenue. Will MIT every move off of Mass. Ave. because of high taxes: doubtful. Google, on the other hand, could easily leave Mountain View for greener, and cheaper, pastures.

    Like it or not "free market" forces can not be denied. If Mountain View becomes too rich for Google they will move elsewhere like so many other businesses and Mountain View will be left as a rotting shell like so many other US cities that have lost their major private employer. Be it to another city, state or county they will move. It's happened millions of times in the US since the early 1970's.

    Here's my suggestion for Google employees: take one weekend and everything you buy locally buy with $2 bills. For those outside the US the $2 bill, while rarely used, is legal tender. $2 bills stand out and the massive influx of them will get noticed. Each $2 bill used that weekend is an advertisement for Google's economic force in the community. Those $2 bills will spread to many, many people that think they have no connection to Google. I suspect the media would latch on to the story too.

    Google brings in a ton of money to Mountain View and IMO their positive economic impact needs to be taken into consideration when judging what their fair tax responsibility should be. City officials in Mountain View need to take a moment to imagine their city without Google and where they'd be.

    • What is silly about Mountain View is that if one of the major US pro sports teams (NFL, NBA, Baseball) were to express interest in moving to Mountain View, if only the City Lords were to build them a stadium and give the team the proceeds from the concession sales and parking fees, chances are the city would bend over backwards to do so, for all the "indirect revenues", jobs, private enterprise around the stadium, etc., the team would generate for the city.

      Of course, it's not quite like Nike and Beaverton,
    • (like $2m USD for a nice three bedroom house that would cost ~$400k in a typical "farm belt" community of the US).

      Umm, try like maybe $220K.

  • We have $30 million in unfunded retirement liabilities. We need the money.

    Enter 'Santa Clara County' into Google. See the #1 result:

    "THAT'S NOT OUR FUCKING PROBLEM!"

  • "'If public land is being used for private purposes, the tenants should be paying local property taxes... We have $30 million in unfunded retirement liabilities."

    Translation : We fucked up, we're going to try to make someone else pay for our mistake.
    • Whether Santa Clara needs the money, or whether they "fucked up" handling money in the past, are both irrelevant.

      The issue is whether a governmental entity can lease out its property for a profit-making purpose and have that property remain untaxed. If you think the answer to this is an unqualified "yes", then you would not be opposed to any of California's state parks being leased out to car dealers or trailer park owners.

      The issue is whether the activities of Google are consistent with the mission of the
  • only in America... (Score:2, Insightful)

    by Scudsucker (17617)
    ...can a city complain about a corporation being exempt from taxes, and it's the city that's greedy. Seriously, if the rest of us have to suck it up an pay taxes, there's no reason whatsoever that a multi-billion dollar corporation can't do the same.
    • "Seriously, if the rest of us have to suck it up an pay taxes, there's no reason whatsoever that a multi-billion dollar corporation can't do the same."

      Yeah, they CAN pay taxes, but that doesn't mean they will or should. You CAN live off bread and water, donating your labor to the state, but that doesn't mean you will or should.

      Frankly, I think we should stand with Google against these taxes, not degenerate into warfare over who isn't paying their "share" of taxes. You keep the game your playing, the politic
  • Local governments don't like it when eminent domain abuse isn't in their favor?
  • Google announced the opening of its new campus in the Bahamas. That comes after last week's announcement that they were moving their headquarters to Nevada, citing the high cost of doing business in California.

    Just keep up your whining about nit picky little crap and that headline will be true one day. It's a lot easier to move a tech company than a company like Boeing, but they still managed to shift a lot of their work to other states.

  • From an an article [sfgate.com] [sfgate.com] at SFGate.com last Wednesday, "Google's deal with NASA Ames will be a long-term lease of at least 60 years that would allow the company's rent payments to be plowed back into the campus for improvements, real estate sources said."

    It seems odd at least for a company whose motto is "do no evil" to negotiate a deal in which the rent paid on public property is turned around to their 100% benefit rather than being used for something like offsetting other tax payer funded costs at
  • RTFA People (Score:3, Interesting)

    by bilsaysthis (411014) on Sunday October 02, 2005 @12:43PM (#13698841) Homepage
    Forget about Greg Perry's underfunded pension whining, that's a red herring. Though as someone who's lived in Mountain View for eight years I would say that our city council has done a pretty good, though far from perfect, job in the face of a terrible economy the last four years.

    A big problem I have with this deal is that Google is not just building office space on federal land but also housing (up to 2,000 units) and retail space. Guess what? There won't be any taxes paid on the homes and stores either. Most Google employees are younger, many in the age range when having kids is common, and those children will be going to local schools even though this deal will avoid paying into the school district to fund the increased enrollment.

    For those of you who said that hey, it's not like Google was paying local taxes now, I guess you forgot where the company's main office complex currently sits. That would be Mountain View and so, yes, they do pay local taxes because of it and that money would evaporate with this deal.

    Even given these negatives I do believe that Google and NASA should make the deal; the underfunded pension liabilities are indeed irrelevant. However, if the company executives want to live up to "Do No Evil" then they should alter the terms to account for the cost the development will incur. Otherwise this will be just one more in the recent skein showing Google's corporate morality is now second banana to a misguided self-interest.
    • A big problem I have with this deal is that Google is not just building office space on federal land but also housing (up to 2,000 units)

      While I understand your position, the fact that California (especially the Bay Area) has ASTRONOMICAL HOUSING COSTS due to the housing bubble, I totally support Google's efforts.

      Look folks, if a very successful company is willing to do all this to keep high-paying jobs in America, good for them. (yes I know they have Google India, etc.)

      The number one factor facing
  • by saikou (211301) on Sunday October 02, 2005 @01:11PM (#13698982) Homepage
    There's a big NASA chunk of land in Houston. And I am sure local government would not object of a bunch of people with BIG income to move into the area. After all, if pension fund is so screwed up, probably other locally provided services too (and overpriced)
  • The feds could Eminent Domain the mayor, police chief, city council etc's house for Google executives to live in.

    Since they would be paying higher income taxes, and if would keep Google from relocating to Canada.

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