Facebook would get $10 million in state economic development funding for its proposed data center under an incentive package approved Thursday by the Los Lunas Village Council.
If the proposed data center moves forward, the $10 million would be the largest amount ever disbursed by the state’s Local Economic Development Act, or LEDA, program since it began in 2002.
The LEDA funds would be used by Facebook to purchase water rights and build an industrial water treatment facility, according to an agreement that was part of the incentive package. The agreement guarantees Facebook 1.5 million gallons of water a day for the data center in the project’s initial phase, up to 4.5 million gallons a day after completion of the project.
“The Water Capacity Guarantee is necessary to protect against a worst-case scenario, because it is critical that the twenty-four hour per day, seven-day per week operation of the data center not be interrupted for any portion of any day, due to lack of water,” the agreement says.
The project would create “a huge impact,” said House Majority Whip Alonzo Baldonado, R-Los Lunas, whose district encompasses the site. “It would stand to attract the attention of companies around the world.”
Facebook is deciding between Los Lunas and West Jordan, Utah, for the site of its new data center, which could include up to six buildings.
It is unclear how much water the proposed data center would use during normal operation. Utah officials have said it would use 5.3 million gallons a day, but information from Facebook’s sustainability website suggests it could use around 25,000 gallons a day.
Earlier this week, West Jordan briefly dropped out of negotiations with Facebook after several Utah entities voted against a $260 million tax incentive package for Facebook. Critics of the deal 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.
West Jordan later announced that it was restarting negotiations with the social media giant.
In New Mexico, the project has received nearly uniform support. Baldonado said it’s difficult to quantify the exact value of the project. In addition to permanent jobs, he said it would likely employ a large number of construction workers and other temporary employees.
In addition to the LEDA funds, the incentives in Los Lunas include a monthly reimbursement to Facebook of up to 75 percent of gross tax revenues the village would receive from the data center’s construction and operation. The reimbursement would be capped at $1.6 million a year, Los Lunas Mayor Charles Griego said.
“It was a request from the company,” he said. “The LEDA act makes it possible, and the company requested it.”
Those incentives are in addition to up to $30 billion in industrial revenue bonds for the project. The bonds are not a payment to Facebook, but rather a mechanism that allows the village to waive the company’s property taxes.
The village has offered to waive Facebook’s property taxes for 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.
Facebook was expected to choose a site for the data center by early September. It is unclear how the termination and subsequent restart of negotiations in West Jordan have affected the decision timeline.