Wednesday, September 21, 2011

Compare and Contrast

A couple of new business deals were announced yesterday. In the first,

San Francisco-based Digital Realty Trust Inc. hosted a grand-opening ceremony Wednesday to tout the completion of a 226,000-square-foot expansion to its existing 293,000-square-foot data center at 2121 S. Price Road in Chandler.

They also provided a reason for locating here.

Warner said West Coast businesses that offer Web-based technology for consumer and commercial use have been choosing metro Phoenix to place their equipment because it is much cheaper than in the major California markets.

The cost of power alone for a 10,000-square-foot user inside the Chandler data center would go up by about $600,000 a year if it were to relocate to a similar facility in Los Angeles, he said.

So basically it was a decision driven by cost. We have a cost advantage here in Phoenix compared to the next best alternative so we get the business.

The second business was,

A Pennsylvania-based building-materials and glass company said Tuesday that it will open its first North American solar-manufacturing facility in Goodyear by the end of 2011, supplying the area with 50 new jobs.

It was also interested in cost savings.

The company is applying for the Arizona Renewable Energy Tax Incentives Program, which was passed in 2009 by the state Legislature to promote renewable energy in the state.

Companies in solar, wind, geothermal and other renewable-energy industries that expand or relocate to the state are given up to 10 percent refundable income-tax credits and up to a 75 percent reduction on real- and personal-property taxes for up to 15 years.


Saint-Gobain, which has glass and abrasives facilities in Scottsdale, also will receive a federal tax credit from the U.S. Treasury Department for expanding in Arizona. The credit is for 30 percent of the company's investment in the state.

Actually the second business wasn't interested in cost savings. It was after government subsidies. From a public policy standpoint, I would much rather have more of the first type of company rather than the second.

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