Los Lunas still in running for Facebook center after Utah city ends negotiations

Los Lunas location still in running for $250M data center

The city of West Jordan, Utah, has ended negotiations with Facebook to locate a proposed data center there, according to a news release.

It was not immediately clear what effect the West Jordan situation will have on a competing proposal in Los Lunas, New Mexico.

According to the news release, the city made the determination after the Utah State Board of Education voted against a $260 million tax incentive package for the company, following similar decisions by the Salt Lake County mayor and county council. The State Board of Education approved a scaled-down plan capped at $100 million, according to the Salt Lake Tribune.

“Effective immediately, all negotiations between the company known as Discus and the City of West Jordan are hereby terminated,” according to the release. “Any and all incentives and inducements preliminarily offered the company to locate in West Jordan are hereby rescinded in whole without prejudice.”

“Obviously, Utah didn’t roll out the red carpet in the way New Mexico did,” West Jordan City Manager Mark Palesh told the Journal. “I’m very disappointed.”

In Utah and New Mexico, the entities applying for the incentives were subsidiaries of Facebook. In Utah, the application was filed by a company called Discus. In Los Lunas, the subsidiary is Greater Kudu.

“West Jordan’s decision to end negations to attract a large data center to Utah is a good sign for New Mexico as we are simultaneously working to locate a data center to Los Lunas to serve a world-class technology company,” said Economic Development Secretary Jon Barela in a statement late Tuesday. “We’ve been working with this company for a year and this is a reflection of New Mexico’s new competitiveness for high-wage and technology-related jobs.”

Critics of the deal in Utah had said the tax package was too rich for the number of jobs the project would create: up to 50 full-time jobs at the data center in its initial phases, and up to 300 construction jobs over seven years. They also cited concerns about the amount of water the data center would use.

That the proposal is actually a Facebook project was first revealed in a regulatory filing by Public Service Co. of New Mexico, which has signed a contract to provide electricity to the data center once it opens.

PNM’s special services contract describes a mechanism for providing renewable energy to the proposed data center, which would include the construction of three solar facilities as well as a high-voltage electric line.

Under the contract, PNM would provide electricity to Facebook using a calculation that includes a fixed rate for 10 years, with a formula to determine costs after that. Facebook could pay PNM around $31 million per year, according to regulatory filings.

Facebook did not immediately respond to a request for comment. PNM declined to comment.

Construction on the first phase of the project has been estimated to cost $250 million. The project could contain up to six phases.

The Los Lunas Village Council already has approved up to $30 billion in industrial revenue bonds for the project.

Los Lunas has offered an incentive of 100 percent property tax abatement over 30 years in exchange for a payment-in-lieu-of-taxes plan that begins with $50,000 a year with the construction of the first building up to $100,000 per year with the construction of the sixth building.