Tags - Boise Chamber, BVEP, Meridian Chamber of Commerce, Meridian City Council, Meridian Development Corporation, Paul Hiller
Officials at software giant Oracle walked away from an agreement to build a data center in the Treasure Valley two weeks ago when a property owner in Meridian raised the price of the real estate by 44 percent just as the deal was closing, sources told the Idaho Business Review.
Five sources who were aware of the project but would not speak on record said the project was a done deal until the property owner upped the price. None of the sources would identify the property owner or location of the property.
The data center is a $250 million project that will eventually employ 150 people with an average salary of more than $65,000. Data centers manage and route information and this project will require about 25 megawatts of electricity.
According to Oracle’s Web site, the company is the world’s top supplier of software for information management and the second largest independent software company. It ranks number 167 on the Fortune 200 list in 2007 with $14.3 billion in revenue and $3.3 billion in profit.
Paul Hiller, executive director of the Boise Valley Economic Partnership or BVEP, would not confirm that he has had any discussions with Oracle. He wouldn’t even confirm whether he had been talking with a Fortune 200 company.
BVEP is an economic development tool of the Boise Metro Chamber of Commerce. Its mission includes luring new business to town.
In a March BVEP newsletter, a front page article says, “A case in point is Project Data, code name for a Fortune 200 high-tech company that has narrowed down the location to build a data center to two sites in the Boise Valley and two sites in the Salt Lake City area.”
Sources told the IBR that Oracle had planned to build the data center in Meridian but walked away when the property owner raised the price of the property from $4.85 per square foot to $7 per square foot. Sources say the project will now be built in Salt Lake City.
Phil Stiffler, economic excellence coordinator for the city of Meridian, argues that the real estate price did not change the deal. He said the site consultants told him before the final decision was made that “This decision is like a jump ball in basketball and you’re Shaq.” Shaquille O’Neal usually wins a jump ball. Ironically, he sat out Tuesday’s game with a hip bruise.
The decision left Meridian officials with a bruised but encouraging ego.
When Oracle walked away from the Meridian site, Stiffler said the consultants told him the city had done everything it could and that they could not tell him the reason the deal fell through.
Stiffler said that Idaho Power had met with the consultants and showed that it could provide adequate and low-cost electricity to the project. Idaho Power officials would not confirm that they met with anyone representing Oracle or BVEP’s code name “Project Data.”
37 Comments
Get on the horn and fight for this deal, BVEP. Probably not that easy, but I would go for it. Those are great jobs for this valley.
Comment By Ray Wednesday, April 9, 2008 @ 11:38 AM
Well that sucks.
Comment By Steve Wednesday, April 9, 2008 @ 2:55 PM
A lot.
Comment By Steve Wednesday, April 9, 2008 @ 3:00 PM
This project would of been a big enough of a deal to place several individuals in new and needed jobs, including the jobs that are/was going to be lost at Micron. It is a real loss for the Treasure Valley that this could not be worked through. FIGHT FOR IT. Where are the incentives to economic development?
Comment By Wendy Wednesday, April 9, 2008 @ 3:12 PM
Too bad Boise sold their industrial park....oh, wait...I forgot---that's socialized competition, a no-no in Idaho.
Same as this place: www.mesadelsolnm.com
Comment By Bill Wednesday, April 9, 2008 @ 3:17 PM
What a shame. This was a much needed boost for our local economy. For the property owner to have had a "done" deal and now nothing (for now) proves that greed got the best of him/her.
Comment By Renee Wednesday, April 9, 2008 @ 3:17 PM
Why is everyone saying "what a shame"? I'm pretty pissed off that one of the first real non-manufacturing, non-low-cost-labor employers is lost due to something as simple as this. Every time there is a rumor that a major sports team is looking to change cities the Mayor of Las Vegas gets on the phone personally and tries to entice them to his city -- because he WANTS a team. Why do we all just shrug our collective shoulders and say "oh well" when this is exactly the type of employer and type of jobs we NEED in the Treasure Valley?
We need to go out and chase business. CONVINCE them to come here, not just hope that they like the "quality of life" here. When will BVEP, the Chamber, and our collective governments stop acting like Boise is the end-all-be-all because we are the biggest in the state -- we all need to realize we are in fierce competition with other states and cities. We start at a disadvantage due to our size, education system and relative distance from other centers of population -- we need to work HARDER to get businesses to locate here. To lose one like this is unacceptable.
Comment By Matt Wednesday, April 9, 2008 @ 5:05 PM
Have you ever seen Shaq on a jumpball? (Hint: He doesn't jump.) He's even lost a tip to a guy 6-1....
Yes, not having the industrial park didn't help. But look at places like Pocatello - I wouldn't be surprised if the other Idaho location was there. (Gynii G. is good!) Pokey *has* to hustle & it's paid off. But I've noticed that they know how to not oversell too...
Still, it doesn't matter how much we work, if the other guys work even harder [or we over-sell?] and they also have an even better deal on the table.
Heck, how do we know that we weren't simply used to get a better deal out of SLC? Our being a perfect spot for this only added to the pressure on SLC to beat our deal.
It might be *very* interesting to see what this cost Utah & SLC.
In any event, this might make for an interesting post-mortem. So.... What makes SLC into Zydrunas Ilgauskas [#1 in NBA for jump balls, 40 of 46]???
Comment By Norris Krueger Wednesday, April 9, 2008 @ 5:43 PM
Dear Governor Otter, Mayor de Weerd and Mayor Bieter,
Please pick up the phone and call Oracle.
Comment By Jason C Wednesday, April 9, 2008 @ 5:54 PM
It would seem like our state, our city has plenty of open land space and property owned by those who needs a sell off that could have made this happen. I'm not sure I would blaim the guy who did not sell... I would be concerned that we did not show enough options. This is the land of opportunity for groups like Oracle and or any other environmental safe manufacturing or support services.
I'm for clean / green growth and developing jobs for all of Idaho.
Comment By DClemons Wednesday, April 9, 2008 @ 6:29 PM
What if those folks DID call? (What if Meridian & Boise were the 2 Idaho finalists?)
Now I really want to know what SLC/Utah put on the table for these guys... (even though I may not want to know)
Comment By Norris Krueger Wednesday, April 9, 2008 @ 7:47 PM
This was done through a site selector (sort of like baseball player hire Scott Boras to negotiate for them). Oracle picked from the finalists & the deals the selector negotiated from each one. (I'm still hoping that SLC gave away the farm.)
Here's something we can do also: The Idaho Economic Development Association is planning to bring in one or more top site selectors and have members do mock pitches [a la Kickstand's speed dating]. It never hurts to get better at the "pitch". If any of you are interested, give me a holler.
Comment By Norris Krueger Wednesday, April 9, 2008 @ 7:50 PM
Call me paranoid, boy & girls...but I've been telling you guys this for 2+ yrs...the current leadership of Idaho is dramatically threatened by anything technology-related.
You cannot reason with buttheads like this. Get rid of 'em.
Comment By Bill Wednesday, April 9, 2008 @ 8:11 PM
LOL - but even paranoids have...
Comment By OK, You're Paranoid Wednesday, April 9, 2008 @ 8:21 PM
The Boise Valley Economic Development group is a joke. First Paul Hiller lies to the Business Review about not talking to Oracle and second the man can't even convince Oracle to look at other areas after the land deal falls apart. Enough of these cowboys. Let's get people who know what they are doing, and bring some much needed tech jobs to this area.
Comment By larry jamison Wednesday, April 9, 2008 @ 9:15 PM
Isn't Hiller the guy who said 2 years ago something on the order..."selling Boise would be such a cakewalk, etc, etc"? I knew this guy was a joke when Idaho Power's lack of capacity caused us to lose those 2 biggies last year.
Look, the suits on the BVEP board are there because voting power in that organization is based on number of employees, not even if the org is a for-profit business or not.
Boise needs to take a lesson from what Tucson did in the '90s when that CoC was dominated by the same kind of lackadasical nonprofits and big service orgs based out of town. They formed the alternative TBC, Tuscon Business Coalition, and started their own localized business publication, now at wwww.azbiz.com
Comment By Hector Thursday, April 10, 2008 @ 7:16 AM
Do we have the workforce for this kind of employer? All these posts just sort of assume we DO, but I am not convinced. My guess is, neither was Oracle.
I'd love to be convinced I was wrong, but seriously - we have a surplus of 150 Oracle DBA's and network engineers in Boise?
This deal doesn't scream for more development incentives, it screams for more workforce development -
Comment By Chris Blanchard Thursday, April 10, 2008 @ 8:59 AM
If we had those "150 DBA's" etc. in surplus sitting around unemployed and not finding work across the world - Oracle would not want them either.
The value of bringing in such an employer is the co-development of their company and our higher education, training, and workforce development systems. This valley has that capability.
Other employees would undoubtedly move to the Treasure Valley, buying houses, entering into banking, and contributing to retail and other economic boosters of the area.
It's a win-win, but only if the conditions of setting up operations here make it so.
Comment By Michael Tomlin Thursday, April 10, 2008 @ 9:12 AM
You can google Oracle Austin data center to see what kind of hoops Texas had to jump in 2002 to get these guys. If Ellison is going to screw his school district out of $3mm, he isn't going to do us any favors. We bid and lost, but sometimes not getting Alex Rodriguez is better for your team in the long run.
Comment By Joe Blow Thursday, April 10, 2008 @ 9:31 AM
'Joe Blow',
Like so many others in Idaho, you don't get it.
Not being competitive is NOT BEING COMPETITIVE...period. Whether it's Oracle, WA Group, Albertons, AMI Semi, Boise Cascade, the 2 IdaCorp ran off, etc.
Comment By Bill Thursday, April 10, 2008 @ 10:26 AM
While it would have been nice to have Oracle here, what is better is to grow the next Oracle here. After all, did Oracle move to its headquarters in Redwood City, or was it started there? Hanging our hat on luring companies here makes for handwringing followed by hung heads when it doesn't work. Beside, if we had a base of software engineers here, Oracle may have indeed set up shop here, so lets focus on the long term solution and grow our own.
Comment By Jeff Thursday, April 10, 2008 @ 10:47 AM
Bill, get over yourself. I fully understand (according to this article) that Oracle apparently balked at paying $305K per acre land and chose SLC, not because of talent shortage, Mormons, potatoes, roads, etc. Keep in mind Oracle/Ellison is cutthroat (see Peoplesoft), so the fact we lost isn't necessarily a slap at ID. We made a fair bid and lost. Austin beat Phoenix and Denver.
Albertsons and WGI made stupid acquisitions that left them ripe for takeover, Boise was in the wrong industry at the wrong time like Micron is. We have also had some emerging companies hit the news recently.
Jeff called it. We should be nurturing our farm team, getting our kids beefed up in math and science, supporting BSU/Idaho Center incubator. Fight for the resources to deployed there, not one-offs.
Comment By Joe Blow Thursday, April 10, 2008 @ 11:35 AM
@Michael Tomlin: I don't understand your logic at all. The reason companies go where they go is because of availability of qualified workforce, and the likelihood that that workforce can be sustained. If we had a steady flow of IT workers coming out of our education system (which is ONE university and a handful of privates like ITT), Oracle would come here, incentives be damned. No one sets up shop in Silicon Valley, Boston, NY, PDX, SEA, or D.C. because rent is cheap and taxes are low. (Read that last sentence again BVEP/Commerce/Boosters).
Comment By Chris Blanchard Thursday, April 10, 2008 @ 11:46 AM
Right...there's always some prima facie reasoning losers want to cite. Get a grip: life's progressive, those with advantages get more advantages, those with problems get more problems.
Comment By Bill Thursday, April 10, 2008 @ 11:47 AM
BVEP is a complete waste of the business community's dollars. It is a glorified PR program and, Boise has plenty of great PR. Fundamentally, we have no economic development strategy at the State or City level...heck, neither of them even have an Economic Development Director in place. Both positions are vacant! We need real economic development initiatives like BSU's new Research Park, the Film Industry's new legislation, Mark Rivers' Watercooler building or, new green-friendly business legislation and regulations. C'mon folks, let's get going before we wake up one day and, our prosperity is gone.
Comment By RTP Thursday, April 10, 2008 @ 12:16 PM
A "qualified workforce" is but one reason companies locate. When tech call centers locate to India the workers are not qualified, they train them. When agri locates in Central America the workforce is not qualified, they must be trained.
Yes, "availability" is a big factor, but trained and ready is less so. In this country many people move to new jobs, and the supporting systems of higher ed for spouses are important, as are jobs for spouses across the workforce spectrum, along with family needs for recreation, arts, K-12 education, etc. Idaho in general and Boise in particular fare pretty well in those categories.
SLC and the Ogden-to-Provo front is certainly a worthy competitor, but we have made great strides and need to remain entrepreneurial in our thinking and practices.
Comment By Michael Tomlin Thursday, April 10, 2008 @ 1:24 PM
We were outbid. It wasn't the land cost. Were we out-worked? Who knows but I got 2 questions---
Are we "recruiting" our existing businesses? Helping THEM to grow? Nope.
Are we helping "grow our own"? Nope.
What efforts we do have are pretty lame.
And who are the "experts" we listen to?
Find the people who have the credentials, the street cred AND the experience AND the training. How many of THEM are getting listened to?
BSU, Joe Blow? Please. BSU ran off their best entrepreneurship faculty & so did ISU & UI. And Joe Blow expects BSU to really help?? I see universities elsewhere (U of Utah anyone?) and the schools here need a total sea change in culture (INEEL too...) and that means a complete overhaul of their key faculty & administrators. Do you think Idaho schools will do that?
Sigh...
p.s. Mr. Blanchard, you are right about workforce development, thanks for that!
Comment By Sigh..... Thursday, April 10, 2008 @ 1:35 PM
Sigh, I don't defend the status quo. If you tell me BSU stinks, then that's a problem and should be addressed, because they must be the MIT, Stanford/UCB, UT, Utah of the state producing waves of engineers and IT pros. I thought they were trying to get it going with the Nampa thing, but you might be right that it failed.
Let's be real. Idaho is a small market team that must build its critical mass via the farm system. These high-priced free agents have sexy names, but want dirt cheap power, land, minimal property taxes. Albertsons and Micron got incentives, but have been cap killers that didn't produce on the field.
Comment By Joe Blow Thursday, April 10, 2008 @ 2:11 PM
When Nokia established its US design center in San Diego (which I think has since closed), they didn't expect to train people. They moved there because the base of wireless engineers was already there thanks to Qualcomm. Qualcomm didn't move to San Diego, it was founded there by a local professor out of UC San Diego. Tech companies outsource to India because there is a pool of educated english speaking people there at a relatively low cost. Why would Oracle come to Idaho if it had to train people? That makes no sense. Whatever the reasons for their decision, the fact remains that we need a more educated workforce here. If you look at any city with a base of technology companies, you will find either a great anchor company (Microsoft/Seatle) and or a great university (Stanford, MIT, etc). Let's quit hanging our hat on selling lifestyle and cost of living and work as much on raising educational expectations and creating a business environment that fosters company creation.
Comment By Jeff Thursday, April 10, 2008 @ 2:37 PM
I agree with everyone that these employers locate where there is a labour pool that they can draw from. That is not to say that they aren't looking for cheap land and utilities. I think that is what gets Idaho on the board when looking for places to locate. But I think there are many different factors that are weighed in. You can't expect Oracle or Microsoft to just come here and employ 2000 people when you don't even have a university that generates enough graduates to fullfill their minimal turn-over rate. Plus, as attractive as boise is, a company cannot soley expect its workforce to up and relocate to boise either. That scenario only makes for highly skilled out of state transplants to come here with good paying jobs.. and then a new shopping mall for them to shop in gets constructed and the mall is what ends up employing origional idahoans...
We should be putting much more emphasis on local education institutions as well as helping to foster local companies. Our local small companies have the potential to become big and become their competition. Lets foster what we got.. and make them regret ever going to utard land.
Comment By boiseguy Friday, April 11, 2008 @ 12:27 AM
Read this and you will understand one of the reasons Utah's tech community is on the way up.....
You have to be completely out of your mind to pursue an IT education now days. I did many years ago when companies were hiring any one with apposing thumbs. That decision certainly isn't a gravy train anymore.
Look at the IT trend with any company within Idaho or US. An IT education almost guarantees a graduate one of two paths; working for a fortune X company that pays well but eventually will make a business decision lay off IT and move the jobs off-shore. Or two, working for a small-to-medium size company that doesn't have the where-with-all to move your job off-shore but pays you barely squat.
I've adapted my IT skills from propeller head to analyst through necessity (multiple lay-offs – sorry right-sizing, “reorgs”, etc.) and survival. Now I'm catching wind that my analyst skills will be off-shored. There are basically few places for IT professionals to hide anymore.
Name two companies in the TV that is hiring IT professions with market value salaries. Now see how many companies you can name that are off-shoring those same IT skills. Until the current off-shoring trend stops (HA) because of $s and no available resources beefing up the Idaho’s IT education system just sets up the graduate for disappointment or failure. That is unless they are willing to work for off-shore wages. But why take on the education cost and job stress when you can flip burgers for the same wage as off-shore wages.
Comment By Kent Friday, April 11, 2008 @ 12:02 PM
Kent,
I'm sorry you have had a frustrating experience in the IT industry within Boise.
I can actually name dozens of companies in the TV that pay IT companies a fair wage and are looking for more people if you have a current skill set: Keynetics, Mobile Dataforce, Microsoft, Balihoo, and CRI are just a few. I also know that the larger companies are outsourcing their IT services off shore, but that is due to their short term view of the world. They need to hit their numbers this quarter. There are more opportunites at the smaller companies in our valley.
Although I don't totally disagree with you view about our educational system, I wonder how many times you or other professionals in this valley have taken the time to mentor young programmers or actually called the professors at our state universities to express your concerns or ideas. I mean seriously, have you ever taken one day out of your life to make a difference?
Also, I have a Darwinian view about the IT industry. If you want a job, keep your skill set current and you will be employable. I'm tired of hearing about the IT people being laid off from large employers unable to find work. They simply had the luxury of sitting behind a desk for years in a "secure" environment. I’ve seen some of their resumes and they are not current. Frankly, it is their own problem they are not employable. If you want to remain in a dynamic industry, you should be spending AT LEAST a few hours a week updating your skills.
Comment By Gary Friday, April 11, 2008 @ 2:35 PM
I’ve been thinking about this whole Oracle issue and I have a few comments and questions:
1) Doesn’t it seem strange that a deal would be killed just because the cost of land increased? Rumor has it that there is more than one plot of land available in this valley.
2) I’m curious why Paul Hiller of BVEP is categorically denying even having a conversation with Oracle. Do you think he is under a confidentiality agreement with Oracle? If so, wouldn’t it be over if the deal was dead? Something tells me that the deal is either not dead or there is another deal in the works.
3) Why is it that BVEP doesn’t enlist the help of other groups? Are the Governor, the Treasure Valley mayors and commissioners, and local business leaders on his speed dial? I’ve talked with fair number of technology leaders in our community and none of them knew anything about this deal.
4) Why, as a contributor to the BVEP campaign, do we not know about these opportunities?
5) Does Paul Hiller plan to do a post-mortem meeting about this lost deal? Any smart business leader knows it is important to know why you lose an opportunity.
Comment By Gary Saturday, April 12, 2008 @ 4:40 PM
Gary- technically, these deals are done through an agent (a/k/a "site selector"). If you follow sports, think Scott Boras.
The site selector may insist on confidentiality to maximize the deal for his/her client.
Nobody will want to burn bridges- who knows what the next possible deal is, yes? So commenting (even public post-mortems) could be seen as counterproductive. Not sure I agree, but who bells that cat?
Instead, how about a positive, forward-looking approach? Your comments (and those of others) suggest one particular positive approach.
We probably do need a thorough re-evaluation of strategy & tactics (maybe even some long-term visioning and roadmapping) but that takes serious resources that the state may not have. (You might be surprised how tight Commerce's budget is.)
You'd also have to do all this completely at arms-length from state govt & other major institutions (though everyone gets a voice). Other states have done this visioning/roadmapping - and their conclusions have *always* been disruptive (NoDak, New Mex, N. Carolina, SoDak etc.) and they tend to always open multiple "cans of worms" like the tax structure, etc.
OTOH, if you do the visioning/roadmapping on a truly bottom-up basis & get everyone around the table pulling together, it will have plenty of credibility (and bipartisan politic support) and will be more accurate. And will be cheaper as well!
And, it allows us to be optimistic about Idaho's destiny.
If anyone's interested, ping me & I'll send along info...
N
Comment By Norris Krueger Monday, April 14, 2008 @ 1:11 PM
I hope that the landowner who decided to get greedy, just as the deal was to close, is run out of town!
Comment By LS Monday, April 14, 2008 @ 2:11 PM
LS -- I take it you didn't read all the comments, but all the "tea leaves" say that Boise was outbid, probably by a lot. SLC simply was not going to lose, it appears.
We may never know all the details, but eventually we'll find out what SLC put on the table. And that may be very instructive (and potentially helpful for Commerce and others).
Comment By Norris Krueger Monday, April 14, 2008 @ 10:31 PM
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