An important vote on a proposed Eagle Mountain, Utah data center project has concluded. The Alpine School District Board of Education approved a plan 6-1 for an estimated $150M in tax breaks.
The approved plan will see 100% of the personal property tax and 80% of the tax generated from the building, land and fixtures invested in infrastructure. The current proposal has previously been signed off by Eagle Mountain and Unified Fire Authority. The School district was the final entity to approve the tax breaks.
The mystery company is allegedly willing to pay upfront for infrastructure investment including power, sewer, telecommunications and road improvements to the site. The only hint so far is that it’s a Fortune 100 company. Officials say the project will bring $750M in investment during phase 1 of a multiphase project.
The new company eyeing the space is undisclosed as of yet, with public officials citing ongoing contract negotiations as reason for discretion.
The mystery company will purchase about 487 acres of land currently under a greenbelt classification. The land is expected to produce $8.4 million a year in property taxes once it’s developed, with an anticipated $500,000 going to the school district each year.
The land is east of 1600 West and north of 1000 North in Eagle Mountain. The data center is expected to bring in about 40 jobs – not a massive number. However, it’s the ancillary benefits that make these projects attractive. The project has been called potentially transformative for Eagle Mountain, possibly prompting further data center builds in the area.
The giants are all building out infrastructure like it’s going out of style. Last December, Synergy Research said the number of hyperscale data centers worldwide is approaching 400, with the U.S. responsible for close to half of that. Utah has seen plenty of activity, with data centers operated by eBay, Twitter, and Oracle. There’s also the big, scary National Security Agency data center there.
Some officials were concerned tax breaks might wipe out economic benefit for local schools. These concerns were based on the original 2016 proposed tax incentives for the cancelled Facebook project. The incentives were estimated to be worth $250M over 20 years to entice the $2.5B data center.
In the case of the Facebook project, West Jordan eventually lost to Los Lunas, New Mexico. Salt Lake City Mayor Ben McAdams told the Deseret News that it was “a bad deal for the kids of the Jordan School District and taxpayers.”
The approved plan for the mystery company includes about $150M in tax breaks to offset infrastructure costs. The 20-year plan suspends 100% of taxes on personal property investment (estimated value of $375M) and provides an 80% break on tax liabilities for $375M in real property investment.
Governor’s Office of Economic Development Executive Director Val Hale told school board members that the project will “open the area up for further opportunity for industry and other development”.
a U.S. Chamber of Commerce report last year highlighted that, on average, data center projects generate over $32 million in economic activity for host communities.