Western New York’s investment in Yahoo was not inexpensive, but few people, we suspect, will argue that it wasn’t worth it to snag a leading, if struggling, technology giant. The company’s data center opened in the Town of Lockport less than three years ago with 77 jobs.
Now, it plans an expansion that will increase its employment by another 115 jobs, including 100 at a new call center. Once again, there will be a public cost.
The goal for Western New York is not simply to help Yahoo grow, but to position the region as a desirable location for other large companies to build data centers. It hasn’t happened yet, which makes the proposed new public investment in the project an uncertain thing. The region will get the new jobs, but will it be able to leverage them into something bigger?
It’s unknowable at this point, but as one expert observer noted, failure to provide incentives could be a show stopper that puts an end to those ambitions. Given that the region has already jumped into this pool with its first incentive package to Yahoo, it would be foolish not to follow up with another.
The project is valued at $168 million. To land it, the town plans to give Yahoo a package of incentives similar to the one the company obtained in 2009. That includes an 18-year property tax break, including no property taxes at all for the first 10 years. It will also exempt the company from sales taxes for 20 years on building materials and equipment.
In addition, the New York Power Authority is providing 7.2 megawatts of electricity under a seven-year contract. Finally, Empire State Development is expected to offer $200,000 a year in tax credits.
The presence of Yahoo offers a path to a new high-tech economy to supplement, if not replace, Western New York’s diminished manufacturing economy. While there is a steep price to pay, this is a worthy investment.
Yahoo’s announcement was not the only good news Western New York received last week on the jobs front. Citigroup plans to continue its rapid growth in Amherst. Just six years ago, the company had 650 employees. That has grown to 1,300 workers at its facility in the CrossPoint Business Park and will soon increase to 1,475 as Citigroup adds another 175 jobs to its global corporate and investment banking division.
More jobs could yet come, according to Sen. Charles E. Schumer, D-N.Y. And why not? As Citi’s CEO for North America, Williams Mills, observed, “Citi believes that the cost-effective location and highly educated workforce in Amherst offers a terrific environment to grow our business.” We suspect that Yahoo feels the same.