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Regional Report Western January 2011


Manufacturing’s loss is data center’s gain

Nearly two years after Springfield, Mo.-based boat builder Mako Marine International Inc. closed its plant in Forest City, Facebook Inc. announced it would spend $450 million to create a data center at the site. Completion is slated for early 2012. The 40 or so jobs promised by the Palo Alto, Calif.-based social-networking giant don’t come close to matching the 150 that went down with Mako, but they show once again how western North Carolina has become a magnet for high-tech data centers, aided by cheap electricity and available land. “The main thing is that the infrastructure they need is here,” says Glenn Bottoms, professor of information-management systems and economics at Gardner-Webb University in Boiling Springs. “They can put in all the special, fast Internet lines they need — T1, T4 or whatever — and Rutherford County, with its decline in textiles, has a lot of space available. Data centers can be not only capital-intensive but land-intensive.”

Apple Inc. is building a $1 billion data center that will employ about 50 in Maiden, and Google Inc.’s $600 million data center eventually will employ about 210 in Lenoir. T5 Partners Inc., based in Atlanta, says it will build a shell to house a server farm on 260 acres in Cleveland County, and Wipro Ltd., an Indian information-technology company, said a few days after Facebook’s announcement in November that it would open a $75 million, 17-employee data center in a building vacated in 2009 by another boat company, Chris-Craft, near Kings Mountain. Those aren’t random events. Spokesman Jason Walls says data centers are one of Charlotte-based Duke Energy Corp.’s economic-development targets. Its electricity rates are among the lowest in the nation, and it has plenty of generating capacity, partly because of the state’s shrinking manufacturing base.

While landing big-name high-tech companies burnishes the region’s image, some people are skeptical about the economic impact of data centers. Facebook’s incentives total more than $11 million over 30 years. Because many jobs will be filled by outside contractors or relocated workers — Bottoms estimates Facebook will hire 10 to 20 local workers, most with two-year college degrees — that could amount to nearly $1 million per job. To collect its incentives, Facebook must pay $13.45 an hour, the average wage for Rutherford County. “The multiplier effect will be tiny, and mostly in the construction phase,” Bottoms says. “In the long term, for every job generated by, say, the Carolina Panthers in Charlotte, another eight are created in Charlotte. For data centers, the numbers are nothing like that.”

BLACK MOUNTAIN — Buncombe County commissioners agreed to support supermarket chain Ingles Markets in its quest to get $100 million in low-interest federal bonds. Ingles plans to build an 830,000-square-foot refrigerated distribution center in Black Mountain that would add 160 employees by the end of 2012. Its existing warehouse employs 750.

CANTON — The Western North Carolina Regional Livestock Center will open next month, giving cattle farmers in the region a more convenient place to sell their animals. Many have had to travel to South Carolina or Tennessee since the local market closed in 2004.

HENDERSONVILLE — Kris Hoce resigned as CEO of Margaret R. Pardee Memorial Hospital to take a job as chief operating officer at Morton Plant Hospital in Clearwater, Fla. Gerald Maier, former CEO of the University of Oklahoma Medical Center in Oklahoma City, was named interim CEO.

HUDSON — Austrian textile maker Sattler plans to buy the Outdura brand from Shuford Mills and form a company with the same name as the brand. It also plans to spend nearly $5 million within three years to expand Shuford’s plant here and add 16 workers, bringing the total to 76.

HENDERSONVILLE1st Financial Services, Mountain 1st Bank’s parent, plans to close two of its 14 branches by March because of the weak economy. About 20 of the company’s 175 employees will lose jobs.

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