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Facebook picked New Mexico over West Jordan as the home for a massive $2.5 billion data center, the company announced Wednesday.
West Jordan Mayor Kim Rolfe blamed opposition from Salt Lake County and Mayor Ben McAdams for the city losing out on the coveted project criticism McAdams said he'll happily accept.
"This was a bad deal, and I stand by my decision to reject it," McAdams said in reference to nearly $200 million in tax incentives, which he thought were too generous. "There are other opportunities we can pursue, and I look forward to working with West Jordan and the state of Utah to find the right opportunity that is good for the taxpayers."
Rolfe said the project would have been a "win-win for all interested parties," bringing hundreds of millions of dollars to the local economy in construction and engineering jobs, without requiring the city to add police, fire and road infrastructure.
"It is unfortunate that this $1 billion-plus investment in our community was jeopardized by political theatrics," Rolfe said in a statement.
Facebook made the decision official in a joint statement with New Mexico Gov. Susana Martinez.
"We're thrilled to have found a home in New Mexico and embark on this new partnership with the state of New Mexico and the Village of Los Lunas," said Tom Furlong, Facebook's vice president of infrastructure.
Martinez said Los Lunas wasn't even on Facebook's radar when they met with company executives 13 months ago, but lobbied hard to get the project.
"Facebook is a stellar, cutting-edge, high-tech company," she said, "and it's an honor to welcome them to New Mexico."
Construction on Facebook's data center will begin later this year. It is expected to come on line in late 2018.
The decision by the social-media behemoth is the culmination of months of jockeying between West Jordan and Los Lunas, a suburb of Albuquerque with a population of just under 15,000.
West Jordan's bid was hampered by resistance from other government entities in the state, leading the city to actually pull the plug at one point after the state school board tried to put minor limitations on the incentive package. Officials scrambled to revive negotiations with the company. Facebook was said to be considering the offer in recent weeks, but ultimately opted for New Mexico's unified front and an even more generous package of incentives.
"While we were hopeful that a revised agreement could be reached," Rolfe said, "this ends any current discussions for West Jordan to welcome Facebook to the state of Utah."
Utah offered an incentive package that included $185 million in property-tax breaks over 20 years plus another $10 million in sales- and energy-tax breaks and an undisclosed incentive package from the state. That drew criticism from McAdams and others who called it "corporate welfare." They argued it was far too rich, considering the data center would generate just 130 jobs at its peak.
"It failed our test of being a good deal for the taxpayers of Salt Lake County, especially when we saw it would cost about $3 million per job," McAdams said Wednesday. "That was just too much for too little benefit."
West Jordan pressed hard, believing the cachet of having one of the nation's largest companies build in the city would act as a magnet, attracting other high-tech jobs to a 1,600-acre campus it had mapped out.
Rolfe said Wednesday that detractors spread misinformation about the water usage and loss of tax money.
"We believe that opponents of the project have every right to state their points and opinions," Rolfe said, but the arguments should be factual. "This standard was not met in this matter."
City Manager Mark Palesh, who was the lead negotiator on the deal, said he never anticipated the opposition from the county, and he believes it torpedoed any possible deal.
"A couple times Facebook came and said, 'Our corporate image is worth millions to us, and people don't understand that,' " Palesh said. "Mayor McAdams trashed their name so badly that they said that will enter into their final decision."
After McAdams spoke out against the deal, Palesh said, Facebook got serious about Los Lunas. The company stopped sending its top people to meet with the city they were all in New Mexico and it was clear that it was going badly even before the state school board voted to approve a scaled-back version of the deal.
Palesh said that, after the school board action, both sides pulled the plug, despite reports that there were efforts to revive the deal. "We never entered into any more negotiations after that point. I think that was wishful thinking on the part of some elected officials," Palesh said.
New Mexico's incentive to attract Facebook was far more generous than that offered by West Jordan. Facebook will essentially not pay any taxes on the project for 30 years. It instead will make annual payments of $50,000 per year, climbing to $100,000 per year in the later phases of the project. Los Lunas also recently added on $10 million in additional tax rebates.
"The people of Los Lunas are proud to call Facebook our neighbor," said village Mayor Charles Griego. "As our community grows, we look forward to attracting even more high-tech jobs and significant construction projects to the area."
Losing out to New Mexico is not the end of Utah's attempts to court Facebook. The company's demand for data storage is exploding and throughout the selection process there was discussion that Facebook's data needs might prompt the company to build in both Utah and New Mexico.
Val Hale, executive director of the Governor's Office of Economic Development, said Utah's door remains open.
"Business recruitment is a competitive endeavor and we congratulate New Mexico on winning this project," Hale said. "We are optimistic that Facebook and its innovative peers in technology will recognize our strengths as a state, and we would welcome a partnership in the future."