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West Jordan terminates Facebook deal despite school board’s efforts to compromise

August 24, 2016 GMT

SALT LAKE CITY — The deal to lure a massive Facebook data center to West Jordan was shut down abruptly Tuesday.

The Utah State Board of Education voted to approve only the first phase of the 20-year deal, capping the total tax incentive at $100 million, while West Jordan officials have negotiated terms to allow up to $250 million in property tax incentives.

Soon after, West Jordan issued a news release announcing negotiations with Facebook, code-named Project Discus, have ceased.

“Effective immediately, all negotiations between the company known as Discus and the city of West Jordan are hereby terminated,” the release stated. “Any and all incentives and inducements preliminary offered the company to locate in West Jordan are hereby rescinded in whole without prejudice.”

State School Board member Stan Lockhart expressed frustration after the announcement, saying the board didn’t kill the deal.

“It’s unfortunate. (West Jordan) could have tried to continue negotiations,” Lockhart said. “We actually approved what we were requested to approve. We just decided to do it in phases. We didn’t kill this deal.”

West Jordan officials said the potential $250 million, 20-year incentive package was not competitive enough when compared with incentives offered in New Mexico, which has been also courting the data center.

Salt Lake County Mayor Ben McAdams and the County Council voted against the initial proposal, speaking against the deal as having bad terms for the taxpayer.

If Facebook had built a data center on the 230-acre plot, it would have generated more than $217 million in new property taxes over 20 years. Of that, local taxing entities — including West Jordan, Salt Lake County and the Jordan School District — would only have received $33 million because the deal would have allowed more than $183 million in property tax breaks.

The tax rebates could have exceed projections, however, potentially up to $250 million, after energy sales tax and state sales tax incentives were factored in.

West Jordan officials had touted the deal as a worthwhile investment to spur economic development on the longtime vacant land, but critics ripped the project for rebating so much taxpayer money for a facility that would only attract 70 to 130 jobs.

“The city of West Jordan understands the concerns of several taxing entities that voted on the proposed incentive package for this large data center, which while investing a large amount in capital expenditures would not include a long-term significant employment base,” West Jordan officials said. “While agreeing on many of the points brought out during these negotiations, city leaders felt they were not insurmountable.”

City leaders also expressed despondence that the deal had caused ill feelings between Salt Lake County and West Jordan.

“Unfortunately, the long courtship of this company has had a negative impact on the working relationships of the several state and local entities involved, which must be repaired for the good of all citizens of Utah.”

Email:kmckellar@deseretnews.com

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