Lawsuit Challenges Google N.C. Incentives

A group called the North Carolina Institute for Constitutional law (NCICL) has filed a lawsuit challenging the incentive package state legislators passed to help attract a Google data center in Lenoir, North Carolina. The group, which has ties to the state Libertarian party, says the Google package of tax exemptions and a $4.8 million state Job Development Investment Grant violate provisions of the state Constitution.

Google said the lawsuit is not expected to have any impact on the progress of its $600 million data center in Lenoir. "We believe the lawsuit is without merit and we will defend against it vigorously," the company said in a statement. "While the courts decide, we will continue with construction, hiring, and the planning of our future in North Carolina."

The NCICL previously filed suit to challenge an incentive package for a $225 million project by Dell computer. That suit was dismissed, but the group is appealing that decision.

The lawsuit names North Carolina Gov. Mike Easley and Commerce Secretary Jim Fain in addition to Google, and claims the incentives discriminate among taxpayers and create a taxing scheme that is not uniform. "The problem is twofold," said Dean Webster, the institute's executive director, told the News & Observer. "It involves special treatment for a single for-profit business ... and the government presumptuously is involved in making economic decisions it's not competent to make."

The North Carolina Department of Commerce has estimated that Google's Lenoir data center project will add $1.06 billion to the state's gross economic product over the next 12 years, and produce a net state revenue benefit of more than $37 million. Wages at the Lenior data center are expected to average $48,300 per year (excluding benefits) in a county where the average annual wage is $27,300.