A once tiny hamlet in the rolling hills west of Utah Lake, Eagle Mountain is developing a knack for attracting some of the biggest names in business.
The city on Monday announced search giant Google purchased property that may host a future data center.
The announcement follows a pair of other development coups in that last few years that include a massive Facebook data center and a Tyson Foods meatpacking plant. The new investments are coinciding with a booming Eagle Mountain population that more than doubled from the 2010 to 2020 U.S. Census counts to over 44,000 residents and is currently growing at an annual clip near 7%.
At a press event Monday, Eagle Mountain Mayor Tom Westmoreland said the Google purchase is further evidence his growing Utah County community is on the rise.
“This announcement solidifies Eagle Mountain’s position in the technology industry ... and that our previous Fortune 100’s were not a fluke,” Westmoreland said. “Eagle Mountain has an important part to play in the future of our residents and the state.”
Eagle Mountain city officials said they could offer no estimate regarding when, or if, Google might begin construction on the 300-acre parcel and a statement from a Google spokesperson was also vague on any future plans for the plot other than confirming a data center is what they have in mind.
“Google has acquired a site in Eagle Mountain, UT, for a potential data center,” the Google statement reads. “While we do not have a confirmed timeline for development for the site, we want to ensure that we have the option to further grow should our business demand it.”
While Google mulls its options, another titan of tech has been quite busy right across the road from the search giant’s new property.
Facebook’s data center
The first phase of Facebook’s massive, $1 billion-plus Eagle Mountain data complex went live in July even as construction work on other parts of the project continue. The Utah facility is just one of 13 Facebook operates 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. 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-raised-to-the-power-of-12 exabytes of data. And don’t feel bad if you haven’t heard of an exabyte, the term for 1,000 to the 6th power, or 1,000,000,000,000,000,000 bytes of information.
Google did not offer details on how big a potential data center project in Eagle Mountain may be if they choose to move forward. However, the size of the property would accommodate a facility on the same scale as Facebook’s project.
In a report released last fall, 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 facility).
With the release of that report, 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.”
Facebook’s unprecedented tax incentives
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.
Phase 2, announced in late 2019, 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 Facebook is currently in the second phase of the project, 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 its 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.