ALBUQUERQUE, N.M. (AP) — Facebook chose New Mexico for a new data center over Utah after questions arose about a tax-break deal worth hundreds of millions of dollars, U.S. Sen. Martin Heinrich said Wednesday.
The announcement that the social media giant will build in Los Lunas, just south of Albuquerque, comes after a roller-coaster contest between the two states to attract the facility.
“He’s really excited about Facebook coming to New Mexico. He’s been working hard and he’s supportive of it,” Heinrich spokeswoman Whitney Potter said.
While the project has enjoyed broad political support in New Mexico, local leaders in Utah pushed back against a tax-incentive plan they saw as too generous.
Supporters of the deal in Utah said it would bring a high-tech cachet that could draw other companies to the city of West Jordan, but critics said the cost was too high for land that could attract other development.
The New Mexico town of Los Lunas, meanwhile, agreed to give up all property taxes for 30 years in exchange for annual payments from Facebook that start at $50,000 and top out at less than $500,000. The complex economic development agreement also involves tax breaks on billions of dollars in computer equipment over time.
In Utah, an initial $240 million tax-break plan publicly fell apart one night in August after several leaders said the lure was too rich. Talks were revived the next morning, but two weeks later, Utah Gov. Gary Herbert said the deal looked dormant, if not dead.
Data centers are key to the booming cloud-computing economy, but they typically bring few local jobs. Los Lunas officials have said the center would be a $1.8 billion construction project creating 300 direct temporary jobs and just 50 permanent jobs. That’s far fewer than the steady employment at the local Walmart distribution center.
New Mexico officials have appeared eager to please Facebook after the state was hit hard by a downturn in the oil and natural gas sectors. Computer chip maker Intel, meanwhile, has been steadily unwinding a major manufacturing plant that was an early beneficiary of similar property tax breaks using industrial revenue bonds.
Officials have anticipated that Facebook construction will spill over into other parts of the economy, including three industrial-scale solar power plants that would be built to offset electricity consumed by the data center.