The Other Side of the Story re: Attracting Data Centers

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We’ve discussed the Tech Rush and attracting Data Centers before.  SEE Lessons from the California Gold Rush and Realistic Prospects for Economic Development in the State of Utah.  Here is another part of that equation.  Despite massive efforts, it took Eagle Mountain — just 40 minutes from downtown SLC — 20 years to attract its first data center.  Watch the videos.

Eagle Mountain 1EAGLE MOUNTAIN — Facebook is set to build a new data center in Eagle Mountain that will span nearly one million square feet and represent a $750 million investment in the city.

“I want to thank God for this opportunity. God bless Eagle Mountain, God bless the state of Utah and God bless America,” said Eagle Mountain Mayor Tom Westmoreland as he fought back tears during a press conference where city and state officials revealed the name of the company Wednesday morning.

Eagle Mountain has worked for nearly a decade to lure data centers to the city — a plan officials say works well for the more isolated area. While Eagle Mountain can’t competitively draw other industries, the city — geographically the third-largest in the state — is a perfect fit for data centers that require a lot of land but not too many new employees. Facebook Data Center Groundbreaking 1

Attracting Facebook is a victory, officials say.

“Eagle Mountain has gone the distance,” said Theresa Foxley, president and CEO of Economic Development Corporation of Utah during the press conference.

While the data center, which is set to be completed by 2020, will most likely only bring in about 30 to 50 jobs, officials say that low number is best for the city so there is no significant impact on local resources like schools, police services or traffic. The city will also see a 1,000 percent return on investment, according to a fiscal impact study commissioned by the city.

Facebook Data Center 1

“It’s good to see that things are happening not just on the I-15 corridor,” Utah Gov. Gary Herbert said during the press conference, noting that projects like the data center can help develop areas that wouldn’t otherwise be developed.

“(But) Utah doesn’t just give money. The company has to give something back,” he said.

Facebook has promised to spend at least $100 million to expand the city’s infrastructure to accommodate the project. This investment would, in turn, expand infrastructure in all of Cedar Valley and increase the county’s power grid by an anticipated 48 percent.

The data center will be powered by 100 percent net-new renewable energy through utilization of Rocky Mountain power renewable energy tariffs, and Facebook will purchase its own water rights and construct the required water infrastructure with money from its own pocket.

“After a thorough search, we selected Eagle Mountain for a number of reasons — it provides good access to renewable energy, a strong talent pool and a great set of partners,” said Facebook’s vice president of data center strategy Rachel Peterson. “Facebook is in it for the long game.”

The state would grant Facebook an estimated $150 million in tax breaks for the project’s first phase, with taxes waived for up to 20 years per phase. Those tax breaks may include hundreds of millions of more dollars if the company decides to continue to build on its lot.

The officials who voted on the project chose to approve it if the state could implement a 40-year cap on the agreement.

The data center in its first phase would increase property taxes currently collected for the 490-acre site by 12,000 times. The project will benefit the city, county, Alpine School District, Central Utah Water Conservancy District and Unified Fire Service Area, officials said.

The data center is set for construction at the Sweetwater Industrial Park between a mink farm and water treatment facility.

Facebook Shovels 2The announcement comes almost two years after West Jordan lost out to New Mexico for a massive $2.5 billion Facebook data center.

Utah representative and speaker of the house Greg Hughes joked during the press conference that all he heard about from New Mexico officials since that time was how great Facebook was for their state.

“I am being hazed by New Mexico, so you can’t imagine my joy (over this announcement),” he said.

The data center is the largest to land in the Beehive State.

“This deal has been brought to fruition through cooperation and hard work across multiple agencies and stakeholders, setting an example for the rest of the nation in how to create a win-win economic benefit for our state both now and in the future,” Herbert said in an emailed statement.

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