The City and County are planning to provide $110 million in property tax abatements to Meta Platforms, Inc., which owns Facebook, Instagram, and Whatsapp, over a period of 25 years.
In return, Meta will purchase of 1,039 acres of City-owned land at $8,156/acre, spend at least $800 million constructing and equipping a hyperscale data center, and create “at least 50 quality full-time jobs.”
The incentives amount to 80% of the City and County’s portions of property tax revenue, resulting in $73 million in property tax forgiveness from the City and $36 million from the County, plus $1,350,000 in park fee and building permit waivers.
Mathematically, the City and County are agreeing to provide $2,200,000 in subsidies for each job created! None of our media are reporting this figure.
The non-profit Good Jobs First cites the high cost per job in deals of this type, claiming that “such subsidies are indefensible in any state, given spiraling costs and paltry job creation.” One of their reports recommends “capping all state and local subsidies combined at $50,000 per permanent job.”
POSSIBILITY OF FUTURE EXPANSION
According to its presentation in the agenda backup, the City anticipates that as many as 200 full-time jobs will be created and that more than one thousand skilled trade workers will be hired at peak construction.
Vic Kolenc of the El Paso Times reports that “getting the full amount in tax rebates would require Meta to create a data center campus in at least five phases, with each phase at least $800 million.”
The City calculates that the total investment may end up reaching $2.8 billion (including incremental equipment refreshes) and that there will be significant new tax revenue for all five local taxing entities.
But the bottom line is that the City and County have only negotiated Phase I, as described above, and anything that comes after that is theoretical.
This City contract was obviously negotiated by former City Manager Tommy Gonzalez, and the current City Council will be all but forced to vote to move forward during their meeting tomorrow.