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Details of West Jordan, Facebook negotiations remain hazy

Details of West Jordan, Facebook negotiations remain hazy

(Weston Kenney, Deseret News, File)



Estimated read time: 3-4 minutes

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WEST JORDAN — It's been a week since West Jordan city officials announced the revival of negotiations with Facebook over a new data center, yet stakeholders remain in the dark.

Salt Lake County leaders, Jordan School Board officials and even West Jordan City Council members say they haven't heard any details from those closed-door negotiations, and it's unclear when there will be any updates.

"I don't know where those conversations are," City Councilman Dirk Burton said. "I'm still waiting to hear myself."

Jordan School Board member Matt Young said he, too, has "not heard a thing."

"And I'm not holding my breath," Young added, noting that details likely won't be revealed to his colleagues and other members of involved taxing entities until a new deal is struck.

Salt Lake County Mayor Ben McAdams — one of the loudest critics of West Jordan's initial $240 million, 20-year tax rebate offer that faltered last week — said he is also waiting for new information.

"It's very appropriate to take our time to make the right decision," McAdams said, adding that he hopes "if it does move forward, it's done in an open and transparent fashion."

West Jordan Mayor Kim Rolfe and City Manager Mark Palesh — who's been most closely involved in negotiations with Facebook — did not respond to multiple requests for comment Wednesday, but city spokeswoman Kim Wells said "there is nothing new to report."

Last week, Palesh said Project Discus, the code name for Facebook, was interested in continuing discussions with West Jordan, but the city was also waiting for official word from the company to "re-engage" in a new negotiation contract.

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While conversations appear at a standstill, New Mexico has cleared a welcoming path for Facebook — offering an even sweeter deal than West Jordan's failed incentive package.

Los Lunas, New Mexico, has approved an offer that waives 100 percent of the company's property taxes for 30 years in return for annual payments from Facebook ranging from $50,000 to $500,000, as well as a $10 million subsidy from state economic development funds and a sales tax rebate that would be worth up to $1.6 million a year, the Albuquerque Journal reported.

But economic development experts say the fact that Facebook hasn't dropped conversations with West Jordan indicate the city remains a strong candidate, despite New Mexico's rich incentives.

Dave Swenson, an economist at Iowa State University, believes Facebook has simply been using New Mexico to "manipulate the appearance of competition" and "maximize their leverage" over their prefered city.

"Facebook knows damn well where it wants to be," Swenson said. "It's not indifferent between the two places, and I suspect Facebook wants to be in West Jordan."

Swenson and Derek Miller, president of World Trade Center Utah and former deputy director of the Utah Governor's Office of Economic Development, said incentives are prioritized after four important factors: a skilled workforce, a friendly and stable business climate, accessibility to transportation and resources — like power or high-speed internet — and quality of life.

"The fact that West Jordan is still in the running tells me the company is looking for more than just money," Miller said.

Utah's steady tax rates, West Jordan's proximity to an international airport and Salt Lake County's access to fiber optic network likely make the city an appealing candidate, Miller said.

Swenson said it's "horribly disappointing" to see cities like West Jordan and Los Lunas "fall into the trap" of a common strategy for large, modern corporations: pitting governments against each other to maximize public subsidy and tax breaks.

"If West Jordan told Facebook to take a hike, its economy will be just fine in 15 years," Swenson said. "You will not have made a massive public finance mistake."

As negotiations stand now, Miller said there's no telling how long conversations will remain private between West Jordan and Facebook.

"These things do take a long time, and that's how it should be," he said. "This is about forming a partnership. The company should not feel rushed, communities should not feel rushed and the state should not feel rushed."

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Katie McKellar

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