Facebook presently has two data centers in Prineville, Oregon, and a new tax agreement with the city indicates the intention of building a third one. Similar to the previous two deals, the recent deal provides tax benefits to the social network.
Big savings for Facebook
According to the deal, Facebook needs to pay one lump sum payment to the city instead of a tax payment each year. Some of the property taxes are deferred for 15 years. Facebook is required to pay $190,000 annually on top of the $110,000 it pays annually for its existing data centers. In return, the social network gets tax benefits for its facilities and servers. The city passed a resolution supporting this tax deal on Wednesday.
“They are increasing their business here. They’re increasing the number of employees that they will have,” said, Betty Roppe, Prineville Mayor, adding, “We will be receiving more revenue. It’s something that is beneficial to the city.”
In the past three years, Facebook has saved over $30 million from its existing tax deals, according to Crook County. How much the firm saves from the new deal will depend on the amount of money it invests in the new facility.
As per the county property records, Facebook has already spent approximately $780 million in the city. Though the company hasn’t revealed its budget estimates, it is assumed to be nearly 40% more than its last project there.
Oregon an attractive location for tech firms
Small communities in and around Oregon often offer benefits to data centers which staff only a few employees. According to Facebook, it employs 147 people in Prineville. In a small town, such numbers make a big impact, for instance, franchise fees from Facebook’s electricity equal almost 4% of Prineville’s city budget.
Owing to its climate and cost of land, central Oregon is a favorite choice for server storage farms. The fact that Oregon has no sales tax, coupled with generous property tax benefits, makes it an attractive destination for the companies looking to lower their costs. Facebook has yet to confirm its third data center, but it sent OPB a few details of Wednesday’s resolution:
“Facebook very much appreciates today’s decisions by the Prineville City Council and Crook County Commission. We expect to make a final decision about a third building in Prineville by the end of the month.”