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Utah rejects $250M tax break for Facebook data centre

Thu 18 Aug 2016

Facebook data centre

In a unanimous vote, the Salt Lake County Council voted down a proposal to offer Facebook $250 million in tax incentives to build a data centre on the western edge of town. However, one final vote scheduled for Monday, August 22, could tip the balance in Facebook’s favor should the state school board support the project.

The plan to lure Facebook to build a large data centre in the West Jordan suburb was denounced as unfair by the people attending the meeting, who showed concern for the precedent would be set by approving the tax break. Concerns were also raised regarding the power and water requirements outlined by Facebook, who requested water capacity of 4.8 million gallons per day to cool the centre.

In the proposal, Facebook would acquire 230 acres on the western end of Salt Lake City, and pay only 15% of property taxes over the 20-year period of the tax incentive. In return, the data centre is expected to provide anywhere from 70-300 new jobs for workers in the area once the initial construction is complete. This is a revision of the draft presented to the county, which showed a purchase of 1700 acres and an additional $51.6 million municipal tax rebate.

Salt Lake County Mayor Ben McAdams noted that at least four cities had already walked away from similar proposals by Facebook, requiring huge tax incentives in return for the jobs and business that hosting the company’s data centre would provide. “We can do better,” he said, “and I hope that we can walk away from this deal.”

Local business owner Al Belt added, “You’re setting a dangerous precedent. When the word gets out that they can do this to us, the next [company] can do the same thing.”

While the council voted unanimously to reject the tax incentive it could still be approved, should the state school board vote in favor. However, the school board has already received evidence of opposition to the plan from local residents, who signed a petition on Facebook stating that should the board vote in favor of the proposal the residents would withdraw support for a $245 million bond for construction of new school buildings.

Facebook is reportedly considering building the data centre in neighboring New Mexico should the plan for Utah fall through. Just yesterday, regulators in New Mexico approved the power plan for Facebook’s solar-powered data centre in Los Lunas, NM.


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