January 21, 2007
Microsoft comes to San Antonio

Microsoft will buld a big honking data center in San Antonio, in return for a little civic largesse.

The San Antonio City Council on Thursday approved a 10-year, 100 percent tax abatement worth $20.7 million and voted to provide $5.2 million from the CPS Energy economic development fund. That money will pay for electrical infrastructure for a 470,000-square-foot structure that will be nearly as big as the Alamodome.

Microsoft's data center, housing tens of thousands of computers, will be a place "where the Internet lives," said Mike Manos, senior director of Microsoft Data Center Services.


The 44-acre site in Westover Hills will bring 75 high-tech jobs. But when it's fully operating in a few years, it will become the biggest customer of CPS Energy, which supplies more than 25 percent of the city budget, said the utility's chief executive, Milton Lee.

The project still must go before the Bexar County Commissioners Court, which is expected to approve a similar package of incentives.

Here's an aerial view of Westover Hills, which is apprently out in northwest San Antonio.

San Antonio Mayor Phil Hardberger defended the use of incentives to entice a world-class company that could act as a catalyst to attract more information technology jobs.

"This is not a gift to Microsoft," Hardberger said. "This is a gift to ourselves."

I'm generally skeptical of such deals. Seems to me that in many cases, the business would have come there anyway, and as such the city is in a sense bidding against itself. I don't know enough about the specifics here, but Dig Deeper Texas makes a pretty strong case for the "gift to Microsoft" explanation. I suspect San Antonio will do well on this particular deal, since the key asset for them seems to be utility revenue rather than nebulous job creation promises. I just wonder what they'll have to do to attract those other IT jobs that Mayor Hardberger is envisioning. We'll see.

Posted by Charles Kuffner on January 21, 2007 to The great state of Texas

75 jobs. That's $350,000 per job. San Antonio could have invested the same money in 75 deserving high school graduates, guaranteed them 4 years of an Ivy League school, and invested another $150,000 each as start-up capital for them to establish themselves in San Antonio as lawyers, doctors, engineers or whatever, and still have come out ahead compared to this deal. Give me a break!

Posted by: David Siegel on January 21, 2007 10:59 PM

Give you a break? You obviously did not read the article.

The jobs created are mostly high paying jobs, the power consumption will pump up the city coffers in the short run, and the taxable value (once the breaks expire) will mean millions for the local school district. As a San Antonio Resident I can tell you this has created a tremendous amount of energy. We have heard that there are already 2 more data center projects evaluating our town.

Oh, and with regard to the comment that we would have to come there anyway...We know that at least Austin and another city Non-US were in the mix.


Posted by: Fred Simpson on January 29, 2007 12:57 AM