August 30, 2016
I used to live in a neighborhood that had a Homeowners Association (HOA). Every month, my neighbors and I paid a small fee that enabled them to change out the flowers at the entrance to the subdivision, hang some wreaths at Christmas and keep pesky teenagers out of the community pool after 10pm—some of us have to work in the morning, right? The HOA also fulfilled another role. They were entrusted to maintain the integrity of the neighborhood. By this I mean they enforced the rules on what you could, and could not, do on your property. Want to build a deck in your backyard that no one will see but you, show us the plans. Keep some chickens in a coop next to the pool, don’t even think about it. Start a meth lab in your garage, okay but you have to keep the door shut and put the recyclables in the blue barrel for pick-up on Tuesdays. In a sense, they served as the cost/benefit adjudicators of the neighborhood. Everyone keeping their lawns mowed and homes neat and tidy ensures rising home values; performing restorative maintenance on 1967 El Camino in the front yard tends to keep the potential buyers away. As Facebook recently found out, the good people of Salt Lake County, Utah decided that the plans for their new data center were more El Camino than mowed lawn.
As you know, pretty much everyone and their dog is putting out the welcome sign for potential data center projects within the confines of their state boundaries. Well, New Mexico and Utah are no different, and they’ve been involved in their own version of a cage match to play the role of southern belle to Facebook’s “gentleman caller”. In practical terms this means seeing who can provide the largest tax breaks to become the home of the guy’s, whose product seems to demonstrate that everyone is having more fun than you, new steroid inspired facility.
Things seemed to be going well for the Utah side until the Salt Lake County Council (SLCC), appearing this evening in the role of “HOA”, did a little cost benefit analysis of their own and decided that data center is just another name for automotive restorative maintenance and voted down Facebook’s proposal. A perspective that was quickly adopted by other area decision makers. Apparently the point of contention is the $185 million to $240 million in tax breaks being used to woo Zuckerberg and the boys. Some folks around town even implied that a large portion of these tax incentives were the result of “secret lobbying”, and since no municipality wants to appear to operate in a manner similar to the Clinton Foundation, the good people of Salt Lake County, and, apparently, the remainder of the citizenry of Utah, decided that Facebook could build its repository for Likes and Friend Requests elsewhere.
Since one man’s El Camino is another’s mowed lawn, Facebook may now elect to take New Mexico up on its offer and build their new facility in the Land of Enchantment. Although this may be viewed by some as a setback for Utah’s desire to become a data center metropolis, I suspect their actions may inspire other cities and states to adopt more of an HOA mode of analysis. I also think Facebook can learn a valuable lesson or two from this experience: make your data center tax relief requests a matter of public record, and don’t even think about putting a deck on those things.