North Carolina officials are falling over themselves today to brag about their new friend: Facebook.
The social-networking site plans to build a $450 million data center in western North Carolina, joining similar facilities open or coming soon from Google and Apple.
Facebook executives joined state and local officials in announcing the project this morning in Rutherford County, about 65 miles west of Charlotte. The offices of Gov. Bev Perdue and U.S. Sen. Kay Hagan sent out press releases within minutes. Perdue sent out a tweet at 11:55 a.m.
Facebook is receiving $1.4 million in incentives from Rutherford County.
The company is also getting an economic development grant from the county that could be worth $10 million if Facebook meets investment goals.
The project won't be a big job engine. The facility is expected to eventually employ 42 people and must pay more than $13.45 an hour, the Rutherford County average. But it reinforces the state's reputation as a new hub for the high-tech economy.
“After a rigorous review of sites across the East Coast, we are pleased to locate our new data center in Rutherford County," said Tom Furlong, Facebook's Director of Site Operations. "The team we will hire here will help us provide faster, more reliable and more robust service to people around the world who rely on Facebook to connect and share.”
The job descriptions include everything from janitors to technical workers who will maintain the data center’s sophisticated equipment.
Construction is expected to start as soon as Friday and take about 18 months. It will be Facebook's second data center. The company announced plans this year to open one in Oregon.
The data centers will help store information for the company's more than 500 million users.
This state is attracting data centers in part because of its cheap and reliable electricity. Lawmakers also passed a new set of incentives this summer that provided extra tax breaks.
Critics question the wisdom of using future tax money to lure some of the world's richest tech companies.
Part of the reason the Rutherford site was attractive, Furlong said in an interview with the Charlotte Observer's Kristin Valle, was the potential for growth there.
“The opportunity to expand it will always be dependent upon how our business continues growing,” he said. “We will definitely keep an eye on it.”
In addition, Furlong said Facebook plans to stay at the facility “quite a while,” though he acknowledged it’s difficult to predict that because of how quickly the industry changes.
Furlong said the facility was a win for the region, despite its relatively low number of jobs created.
Not only will there be 250-plus construction jobs for the next 1 1/2 years, but the project is also adding permanent workers who will either live in the community or commute there, pouring money into the local economy through hotel room rentals, restaurants and other expenses.
“Also, when we select a location like this, other companies tend to notice,” Furlong said. “It serves as a little bit of a lighthouse for those types of things. … It certainly puts Rutherford on the map.”
Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or
Comments
Wow. A bunch of computers and very few jobs.
Thu, 11/11/2010 - 23:35 — mothra1960Dell divorced NC. What makez you think FB will stay?
I support the tax breaks. We are not giving them any money. We are saying you pay a lower tax rate for n # of years. If they do not come here, we lose the potential stuff they would add to the NC ecoomy.
Computers do not buy goods and services. People do.
Not Your nexus
Thu, 11/11/2010 - 19:02 — slimjimWith Facebook building a facility in North Carolina and the fact Facebook has a revenue model based on advertising. This new facility provides a stronger nexus which allow our state to go after the unpaid sales tax from purchases made by Facebook visitors.
Since under the existing Amazon tax Law this nexus had been established when the first North Carolina resident started a Facebook web site, this new brick and mortar location will be provide a stronger motivation for NC to go after "sales tax" issue from the largest E-Commerce platform on the Internet.
Since our state has only gone after Amazon.com and left many of the other E-Commerce platforms alone, it is only fair we attack and denounce Facebook as has been done against Amazon.com.
This is your Amazon Tax Law working for you..... A law passed to go after one specific company while we turn a blinds eye to the largest violators in our state. An unfair law which only hurt small NC websites owners while our own state reaped millions from their affiliate programs which do not charge Sales Tax....
Basically if you want to stop the incentives for the data centers and the jobs they provide our state. All we have to do is apply the Amazon Tax Law fairly and without prejudice then these corporations will never consider building any nexus in North Carolina. All we need to do is threaten to tax them under the existing Amazon Tax Law and they will stay away....
...better than nothing.
Thu, 11/11/2010 - 17:19 — JustAGuyInNCAt least we're getting some investment in our state. That being said, we're giving a lot of tax incentives for what will be un-skilled jobs at the end of the day. This datacenter will be largely run and managed by remote employees - with few exceptions. Those local employees are going to be security, administration, janitorial, etc. Sounds to me like a pretty sweet deal for Facebook. They pay for the building and the state of NC pays the equivalent of labor and utilities for the first likely the first couple of years. :) Nice.
What is it with all the datacenter and callcenter job announcements as of late - can't we do better than this?!
Aren't tax concessions "free"?
Thu, 11/11/2010 - 16:35 — johnfredIf Facebook did not come here and build a nice facility and hire people and pour money into the economy then they would not get the concessions BUT no one would be here employing people or using the land or helping the local economy. So we are giving them incentives to come here but we are giving up potential income NOT cash in hand and without Facebook we would not get the income anyway.
What do you naysayers get out of carping here? I would really like to know. People who do not see value in progress would be happier somewhere where progress is not happening. South Carolina is lovely this time of year.
Interesting....
Thu, 11/11/2010 - 16:17 — nancyncIf you look at the jobs, salary average and just the $1.4M county incentive, the payback will only take 25 years, if they are around that long.
Bunch of doubters
Thu, 11/11/2010 - 18:53 — qvorawWhat a bunch of wimps here. Tax concessions (call them incentives, breaks or subsidies) have worked fantastically for the last 30 years. Why, we have the healthiest humans on the planet with our tax-subsidized food production (and resulting job security for the healthcare/insurance/pharma industries). We have the envy of the automotive world in Detroit -- look at their housing, factory output, and civilian prosperity. We have the healthiest of financial sectors, and our seafood from the gulf region is second-to-none (in carcinongens).
What's not to worry about this tax break. You fuss about Apple and Google. I mean really -- Dude -- you should have bought a Dell.
Oh wait...
Data Centers are Absolute Losers for NC!!!
Thu, 11/11/2010 - 15:55 — BourbonStYeah, yeah, yeah, so it's Facebook, Google, and Apple. So what?! What kind of idiots do we have in downtown Raleigh looking after interests of the taxpaying public? Well, Bev Perdue is the Queen Idiot, but I'd like to know the names of the rest of the idiots who think Facebook, Google, and Apple data centers are going to be worth five cents to the citizens of North Carolina. I am sick and tired of hearing all about how much we should conserve water and other resources, and then have the supreme idiots bring in not one, not two, but three data centers. All a data center is is a gigantic factory with acres and acres of very power-hungry computers using tremendous amounts of water (for cooling) and electricity. Guess who is going to have to pay higher utility rates for many years to come (not just people in the mountains--it'll be ALL of us in North Carolina) because of this idiotic move by Queen Idiot Bev Perdue and others in government. The very few jobs will be nothing more than care-taking jobs, including principally low-level, low paying security guard positions and no more than five to ten intermediate-level technician jobs paying surprisingly little. The data center manager and a chief engineer and assistant will be able to keep feet planted firmly on their desks most of the time, and they will be paid very well. And, I'll betcha the manager, chief engineer, his assistant, and half the technicians will NOT be North Carolinians but will be brought in from California.
Very few data centers use
Fri, 11/12/2010 - 02:27 — mhrivnakVery few data centers use water for cooling. Those that do use it have it in a closed loop, so once the system is full, it doesn't require much additional liquid. How often do you add coolant to your car? Liquid-cooling a data center works the same way.
Get your facts straight. Your post only made one person look like a "Queen Idiot", and it isn't the Governor.
The article reports between
Thu, 11/11/2010 - 14:31 — justinpinnixThe article reports between 1.4 and 10 million in tax concessions for 35-45 workers. That works out to between $35,000 and $250,000 per job. Let's hope Facebook remains popular for a long time to come :-)
The facility is expected to eventually employ 35 to 45 people.
Thu, 11/11/2010 - 14:04 — mike27513So I wonder how much it cost NC for less than 50 hourly techician jobs.
NC taxpayers gave Google 200 million.
There will be fewer than
Thu, 11/11/2010 - 16:04 — BourbonStThere will be fewer than ten technicians, and these will NOT be good jobs. They'll be factory maintenance types of jobs, which are fine (lots better than putting down asphalt onto roadways).
Waste of Tax money
Thu, 11/11/2010 - 13:20 — mike27513How MUCH did WE spend?
Thu, 11/11/2010 - 13:17 — ViperRetAnyone know the total cost, on an annual basis an/or the upfront numbers that the State and the County kicked in. I am NOT knocking creation of jobs.
The $450,000,000 sounds like a lot.....but as someone that has been involved in upfitting of data centers, a LOT of this cost is in the servers and switches and HARDWARE. That, unfortunately, is not being manufactured in NC.
There will be a lot of local contractors involved and there will be a short term uptick in the local economy while the folks that build and upfit the center are on site.....so that will definitely help.
HOWEVER, one wonders what the overall net effect, five years from now will be.
Would be a GREAT question to put to Dr. Walden. He appears to be one that can be trusted to give a straight answer.
Sky Rocketing Utility Costs
Thu, 11/11/2010 - 16:19 — BourbonStThe accurate and simple answer is that utility rates will increase markedly within five years, and will remain sky-high forever. I have a Ph.D. in applied econometrics from LSE. Mike Walden will undoubtedly have a different take on the data centers.