This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The world's largest tech companies are getting sweetheart deals from states and local governments trying to lure data centers, according to a report from a watchdog group that looked at 11 recent deals — including a Facebook center that West Jordan hoped to land.
The report, by Washington, D.C.-based Good Jobs First found that Google, Microsoft, Apple, Amazon Web Services and Facebook have received more than $2 billion in government subsidies and that in 11 massive deals the group analyzed the average cost per job was $1.95 million.
"At that price, taxpayers will always lose, because a worker will never pay $1.95 million more in state and local taxes than public services she and her dependents consume," the report said.
North Carolina was the most aggressive, giving $321 million to attract a 500,000-square foot Apple data center in 2009, which created 50 jobs — a cost of $6.4 million per job.
The group also said that the true cost of courting the tech giants may be more, because government entities are typically not transparent about the scope of the deals.
The report includes a section about the heated competition between West Jordan and Los Lunas, N.M., for a new Facebook data center. It shows how the social-media titan has repeatedly pitted two locales against each other in a bidding war.
In 2013, it put Altoona, Iowa, against a Nebraska spot, and, in 2015, used a "secret site" to leverage more tax breaks out of Prineville, Ore.
In West Jordan's case, the Salt Lake County city offered $240 million in total tax breaks to Facebook in a proposal that would create an estimated 100 jobs.
Facebook ultimately opted for New Mexico after Salt Lake County Mayor Ben McAdams, the Salt Lake County Council and the state school board all expressed reservations about the incentives.
While data centers initially generate considerable construction jobs, they require few permanent workers — on average 30 to 50 jobs with many of them being low-paying janitorial and security posts, although there are some higher-paying technical jobs.
A Facebook facility in North Carolina, for example, brought about 500 temporary construction jobs and 42 permanent positions.
The Good Jobs First report recommends a set of "best practices" for communities courting data centers. It says transparency is a must throughout the process, including disclosing the identity of the company seeking the subsidy. In West Jordan, Facebook went by the code name Project Discus through much of the process.
It also recommends that subsidies be capped at $50,000 per job and that negotiators be willing to walk away from the deal if it gets to be too rich — recognizing that the companies need communities with cheap electricity and will bring little benefit to the area economy.
Twitter: @RobertGehrke