Utah city concedes Facebook data center race to New Mexico

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SALT LAKE CITY (AP) — A Salt Lake City suburb vying with a New Mexico town to attract a Facebook data center dropped out of the race Tuesday after state education officials decided the $240 million deal was too rich, adding their voices to a chorus of questions about the deal.

West Jordan city leaders said they can't compete with tax-breaks offered by Los Lunas, New Mexico, so they're ending negotiations.

Though he acknowledged the data center wouldn't bring a lot of jobs, West Jordan city manager Mark Palesh defended the tax-break offer.

"If you want to attract an all-star player, you have to offer a competitive package," he said in a statement.

Critics said they'd welcome Facebook, but the deal would have set a bad precedent for other companies who would expect the same kind of sweeteners.

"We'd love to have them as a corporate citizen, but not with a blank check," said Richard Snelgrove, one of the Salt Lake County council members who voted unanimously to throw their weight against the deal last week.

The plan has been contentious in Utah, with some leaders saying the cost is too high for a facility that would bring 100 jobs or less on a piece of land that's also prime for other kinds of development. Supporters argued the data center would still generate tax revenue and carry a cache to draw high-tech companies.

The Utah State School Board tried to find a middle ground and bring the project in line with previous tax-break deals offered by the state on Tuesday.

"It's just too rich, it's just too much in terms of setting a precedent for future deals," said board member Stan Lockhart. The panel approved tax breaks for the first phase of the deal worth up to $100 million and said they could grant more later.

But without an up-or-down vote, the future of the deal was uncertain ahead of a key vote by multiple cities and school districts set for next week.

With Facebook looking to break ground quickly and have the center operational as soon as next year, West Jordan announced its decision to pull out of the negotiations shortly after the school board vote.

Facebook did not immediately respond to a message seeking comment on the Utah decision.

Utah is also home to other data centers, including a massive storage facility built by the National Security Agency.

The facilities house long rows of servers and hard drives that store and process vast quantities of highly secure information powering everything from online shopping to streaming movies.

While they're an increasingly important part of the global economy, they function more like giant walk-in refrigerators for computers that generally require few people on the ground to keep them running, said data center consultant John Harrington with Verify Research Associates.

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