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Mammoth Facebook data center in Eagle Mountain still chugging toward go-time

Work continues on the new Facebook data center in Eagle Mountain on Wednesday, Sept. 4, 2019.
Work continues on the new Facebook data center in Eagle Mountain on Wednesday, Sept. 4, 2019.
Scott G Winterton

EAGLE MOUNTAIN — The mind-boggling trove of data created, posted, modified and shared by the billions of users on Facebook, Instagram and WhatsApp every moment of every day has to live somewhere, right?

All those pics and posts may seem to simply float along in the digital ether, but the functional reality is those bytes of info all have actual homes, and one of them is under construction in Eagle Mountain.

Facebook’s $1 billion-plus data center in this small community on the west side of Utah County is just one of 13 across the country and, when complete, will occupy some 1.5 million square feet.

Exactly how much data the facility will be able to hold is a little murky, and the company isn’t saying, but experts estimate the highly secretive National Security Agency data center in Bluffdale, which has a similar footprint, might accommodate 3-12 exabytes of data. And don’t feel bad if you haven’t heard of an exabyte, the term for 10006 or 1,000,000,000,000,000,000 bytes of information.

In a report released Thursday, Facebook says it spent $11.5 billion from 2017 to 2019 on capital expenditures, operating expenses and direct wages related to data centers, investments that have generated some $18.6 billion in contributions to gross domestic product for its host communities across the U.S. In Eagle Mountain, the company says it has kept over 1,200 workers busy during peak construction, and the data center operation will, when complete, “support” 200 jobs (though only a few dozen employees are actually needed to manage the actual facility.)

Facebook Community Development Manager William Marks said work on the Eagle Mountain facility has continued throughout the pandemic and provided an ongoing economic boost to the community.

“We are proud to invest $1 billion into Eagle Mountain but even prouder to see how our investments spur further economic benefits for the area, especially during this tough economic climate,” Marks said in a statement. “Our data center investments go beyond economic growth to benefit the local environment and community.”

While many companies, particularly those in the food service, hospitality and recreation/entertainment sectors, have suffered catastrophic losses amid the ongoing restrictions brought on by COVID-19, many leading U.S. tech endeavors, including Facebook, have been experiencing record-setting business.

Facebook, which currently has some 2.7 billion users, reported over $18 billion in revenues in the second quarter of 2020, up almost $2 billion from the same period in 2019. The company’s net income for the quarter, about $5.2 billion, was up 98% from 2019. Facebook, which also owns popular photo/video posting platform Instagram as well as messaging service WhatsApp, started the year with its stock trading around $209 per share and briefly exceeded $300 per share earlier this summer. At the end of regular trading Wednesday, Facebook stock was worth about $262 per share, giving the company a market capitalization over $745 billion.

In the company’s quarterly report filed in late July, Facebook founder and CEO Mark Zuckerberg said he was pleased his company could play a role in keeping people connected amid the ongoing global public health crisis.

“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” Zuckerberg said in a statement. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”

Facebook unveiled the Eagle Mountain project in May 2018 after rumors and speculation about a mysterious big tech project in the area swirled for months. The depth and breadth of local and state tax incentives provided as a lure for the company were also clarified at that time, and they are unprecedented.

If all five phases of the data center project are completed in the next few decades, Facebook is set to harvest a potential $750 million in taxpayer subsidies along the way.

Under terms ratified by five different taxing entities, Facebook will qualify for some $150 million in tax breaks over 20 years for Phase 1 of the project, a two-building, 970,000-square-foot undertaking worth $750 million.

Phase 2, announced late last year, adds 500,000 square feet of additional facilities to the first phase and pushes the capital investment to $1 billion, according to the company.

While a company spokeswoman told the Deseret News Thursday the facility would be coming online next year, the open-ended incentive agreements extend public benefits well beyond the first two phases and could land the company hundreds of millions in additional tax relief over the next four decades.

In addition to its capital costs, Facebook is investing about $150 million in infrastructure improvements, including bringing power to the 500-acre site from a nearby high-capacity power line corridor, extending sewer and water service, bringing in telecommunication lines and improving roads.

That infrastructure investment is expected to be equalized by the Phase 1 tax benefits of $150 million over 20 years. That tax break gives Facebook 100% tax relief on personal property taxes due and 80% relief on real property taxes due for a term of 40 years for four of the five taxing entities it’s beholden to.

Only the Alpine School Board created some caps on those benefits, with limits of $40 million per phase and $120 million total over 35 years. Alpine School District represents the biggest beneficiary of the taxes Facebook will pay — and the entity giving up the most via the tax break package — as the recipient of about 70% of the total taxes due. The company will also enjoy some sales tax exemptions, created specifically for data centers by the Utah Legislature.

A study commissioned by Eagle Mountain on the project detailed that if Facebook carries the project through five phases inside the 40-year limit, the company would earn $750 million in tax relief.

Utah is currently home to numerous data centers, including facilities operated by eBay, Twitter, Oracle and the National Security Agency.