Facebook to open data center in Prineville
Carla Axtman
Social media powerhouse Facebook has picked Prineville for its first company-owned data center, drawn to Central Oregon by the region's affordable power rates, a favorable atmospheric climate, and the prospect of state and local tax incentives.Construction has already begun on the facility, which will employ 35 people when it's complete early next year. About 200 people will work on the project during construction, according to Facebook, which declined to say how much construction will cost.
So apparently even with the prospect of paying a higher corporate tax (the story says that the tax incentives are property tax exemptions)...they like us. They really like us.
Discuss.
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11:13 a.m.
Jan 21, '10
Part of what the "No on 66 & 67" campaign aren't talking about is that companies like Facebook will still face little or no corporate tax here because of the "single sales factor" which allocated a multistate corporation's taxable in Oregon solely on the percentage of their sales that occur here.
That causes severe heartburn to Chuck Sheketoff, but continues to make Oregon attractive to many businesses whether Measures 66 & 67 pass or not.
Jan 21, '10
I had viewed this just a good local story for Central Oregon's ability to attract business - as we really need good stable jobs out here. Nice catch on the lack of 66/67 as a deterrence - I think that's a pretty compelling example that the Yes side should run with.
Jan 21, '10
These facilities need both a dependable long term power supply and water for cooling like Google in The Dalles. While the project was withdrawn by the applicant CoGentrix proposed a huge natural gas powered electric plant west of Prineville in Jefferson Co. several years ago when power rates were skewed by Enron fraud. When power rates dropped after that episode the plant was not economic. It this area there is a concurrence of the natural gas pipeline, the BPA California inter-tie for power transmission and some believe enough available water. I believe you will find that portions of the region have been designatated by ODOE as suitable for the huge natural gas plants and as soon as these plants begin to make economic sense I would expect to see renewed attempts to build them. And these requests should be controversial as one the one proposed in Jefferson Co. several years ago as opponents saw water as an issue as well as development of range/ag land.
Jan 21, '10
This could be a case study in greater transparency of tax expenditures. Facebook is going to benefit from some tax breaks. Probably Enterprise Zones, possibly SIP.
These tax subsidies have job creation goals. We should get reports on 1) which incentives Facebook is benefiting from, 2) how much, 3) what are they promising to provide for the subsidies, 4) what they actually delivered.
and then if they don't deliver, we should have clawbacks to get our money back.
That way, we know if these tax subsidies are working as intended, and can analyze their effectiveness. Plus it puts some accountability on Facebook (and all other beneficiaries of these subsidies) to deliver on their promises.
As it stands, beyond press releases, we are not likely to get any of this information. If there are direct subsidies, we'd get all this data. But with tax subsidies, not so much. we need to fix this.
Jan 21, '10
Jack, you make a good point about the single sales factor being good for companies like Facebook. Industry estimates of its 2009 revenue are around $550 million, which means its Oregon revenue might be in the $5 million range. M67 would impose a $4,000 minimum tax (or more if the company is profitable).
Of course, as we've discussed elsewhere, I fear that once M66 and 67 raise less revenue than expected, there will be political pressure to raise the rates, lower the income levels they apply to and (a new thought) even impose some tax on global company revenues rather than just they're Oregon sales.
After all, to badly mix a metaphor, why only milk that part of the golden goose that lays Oregon eggs when you can tax the whole bird?
Jan 21, '10
Say there is a lot of talk about Facebook becoming a pay site- enough talk anyway there is a Facebook group of over 3 million against it.
Jan 21, '10
Ummmm. Well: the Devil can afford to like us. The Devil enjoys the taste of Organic Soul!
Facebook is not the warm and cozy social scape delusionally believed/concocted. It is strictly a data and email aggregator, of course. I had a personal email address destroyed literally within two days of accidentally hovering my mouse over one of the sidebar ads and clicking. Then I navigated in a few clicks, and got out.
Thereafter and to this day more than a year later, that email address receives, in all honesty, never less than thirty and sometimes more than one hundred and twenty spams daily. DAILY.
I tested the so-called "Facebook Team" as more than a mirage. Their tactic is to send you an autobot mailer that purports to be from "someone", promising to look into and contact you. That never happens, and you are supposed to be satisfied. If you persist, and you will receive the same message repeatedly (it is either an off-shore call center monkey sending template messages or a programmed macrobot), always with a different nice person name attached... you are expected to give up and go back to wasting hours in Farmsville, endless vapid forwards-lists and Hunting for doodads or responding to system-generated messages that purport to be alerting you to somebody you know seeking your attention.
If you delete your account, you will receive spam from Facebook for three months, daily. After this, it drops off to every week or every other week. Then it's just the occassional fishing poke.
The only reason I returned is to be in contact with one ceremonialist and researcher who is impossible to catch any other way, unless you call him in Calgary or Hawaii, on his cell. Heh.
And guess what chillens? When I fired it up again? There was all my data!!!!!! Well now!
Anyway, I've since killed my email address I had for some fourteen years, it's gone.
1:30 p.m.
Jan 21, '10
Say there is a lot of talk about Facebook becoming a pay site
And by "a lot of talk", you mean a wild internet rumor. There's no way that it becomes a pay site. It would destroy their entire business model, which is ad-based. More likely, they will find aspects of Facebook to make into premium services.
For example, Facebook's "inbox" app is stupid and limiting. I believe that's by design. They have a platform where they could build a full-fledged email application that's fully integrated with Facebook. By using your friend list as a spam filter, they could literally get a perfect 100% spam filter.
1:32 p.m.
Jan 21, '10
RLW: I'm no Facebook apologist, but I can tell you that Facebook doesn't share email addresses with advertisers or app-builders. (It would screw up their business model, which requires advertisers and app-builders to contact their fans through Facebook.)
It's more likely that you inadvertently typed in your email address inside an app. Which doesn't make the spam any less acceptable.
Jan 21, '10
rlw, With her sudden interest in the ethics of online advertising, I'm sure Carla will particularly be outraged to hear of your experience... Maybe she'll even post her own 'investigative journalism' commentary here?
But then again, maybe she was just advocating her own more restrictive standard of ethics for anti-M66/67 online advertising.
1:53 p.m.
Jan 21, '10
With her sudden interest in the ethics of online advertising,
That would be NEWSPAPER advertising, of course.
But then, you knew that. :)
Jan 21, '10
Umm... Carla, didn't you rant about the ad on Oregonlive.com yesterday? Oregonlive is on that Interweb-thingy that Al Gore invented.
Jan 21, '10
Kari: would LOVE to know, then, why I got reams of spam out of nowhere starting the day this excursion into the sidebars? You know the aggregator bait and switch ads. You click on offer for a computer and suddenly it's cheez whiz, then amazon, then viagra sticks, and so on... and then you are getting avalanches of spam from UTTERLY unrelated enterprises. Sorry to bust the old bubble, dear, but that's what those ads are - angler fish organs.
I had an email that was TOTALLY spam-free for more than a decade, and overnight it was destroyed by Facebook and those who subscribe to Facebook as "advertisers" hidden behind the "front" ads.
Try it, Kari. Set up a webmail you don't mind offering up to be savaged. Then go peruse some of those ads. Either somehow the world changed and they stopped since more than a year ago, or it's the same planet.
Will be fun to hear back from you as to whether they stopped it.
Jan 21, '10
Kari - yah, I agree that is possible, about the app. However, I recall only ONCE before in my life utterly naively entering one of those spam labyrinths, in pursuit of a Harry Potter book offered free, hopeful on behalf of my little son.
My "bucket" Hotmail acccountjoined the boneheap immediately thereafter, and it was the EXACT same setup.
So perhaps a combination, but I still believe it was that horrible maze of inadvertent sign-ups from clicking on that single ad.
Anyway, anyone who thinks fondly of this cold enterprise that preys upon our need for connections and playtime together... ummmm..... play away and feel the warmth, but for beak's sake, don't think THEY truly care. They exploit it.
Jan 21, '10
Why do you boys hate Carla so much? I'll bet she's hot as anything and a real sweetie face to face. I wonder sometimes if she intimidates and maddens?
Just wondering!
5:05 p.m.
Jan 21, '10
Darth: You do realize that it's a NEWSPAPER, right? It might be online--but it's still a newspaper.
That's vastly different than advertising on a blog or other advocacy website.
Or am I just overestimating you?
Jan 21, '10
Good report Carla. The over riding factor for placing the data center in Prineville was COCC/OSU as well as a regional unemployment rate arounf 15%.
Jan 21, '10
Kurt, that brings up the question - if the reasons you cite are the primary reason they are locating there, why are we giving them tax breaks too?
Jan 21, '10
Jon,why would we NOT give them tax breaks? Business is business. LIstening to the City Club rerun tonight (for once they were not stale for me), I was entertained by the debate between Pat M and Steve N -- as much as I enjoyed STeve's verbal showmanship, bullshit and MY point of view runs trippingly off his sardonic tongue... Pat M. did not sound entirely awful. I do not agree with anything Pat has to say, and I admit to bias in believing that Steve keeps pulling the blanket off Pat's studied answers -- I was not wholly certain that he was playing at well-heeled. I got the sense that this is indeed Pat M's natural state of compose.
Soooooooo. I hate what Pat purports and dread the idea of such as him driving things; but I dread even more such as our ex-possum-eyed leader. Good fun for the humorists but bloody dangerous. Pat M comes off as someone you could at least engage in civil converse,but he is absolute an ideologue too.
Back to topic: Facebook - up and coming scavenger moguls who create nothing and take all, feeding the delusional Habit of the American Soul. Sounds like a pretty good fit.
Suspect they would still come if the .01% tax rise comes through. They've got their eyes on us becoming the CyberJam Forest, methinks.
Jan 21, '10
Kurt: are you saying FB management are so smalltown as to believe they have to be within puking distance of the school? Suspect this means they count on cheaper labor - new grads and schoolkids as well as smalltown unemployed with lower cost of living demands, thus perhaps greater stability at lower wages? Just kinda curious.
Clearly they might have to PAY somewhere near Portland... tho Oregon is a notoriously low-wage state, comparatively overall.
Jan 21, '10
RW, if the point of the tax break is to bring companies here to create jobs, and the companies would come here and create jobs ANYWAY, then what point is the tax break?
It's what we call the "Free Rider" problem.
Jan 21, '10
Ummmmmmm Jon: that is what I mean. These "tax breaks" are meaningless. Just meaningless. We rank very far down in the national stats for a state with super-academically enriched potential employee populace, lifestyle benefits, low wages for the outstanding expertise on tap. They will only flood to such garden spots as OK, et al if they want and need free license to pollute along-with.
The tax breaks are being offered b/c it is business as per.
I hope we can see this change. Honestly do.
Jan 21, '10
Under the deal, Facebook won't have to pay $2.8 million a year in taxes that would be charged on the $188 million data center for 15 years.
Looks like tax cuts create jobs.
Jan 21, '10
C'est incredible.
Jan 22, '10
RW, sorry I didn't catch your point at first. gotcha now.
10:18 a.m.
Jan 22, '10
The reason property tax breaks make eminently good sense in the case of business like a data center is that property taxes were initially intended to represent a rough approximation of the cost of services provided a property owner by local governments.
Data centers, like many other hi-tech manufacturing facilities, represent a huge capital investment far out of proportion to the burden they place on local services. If you were able to do a strict cost/benefit analysis comparing what such a data center would pay in new property taxes (at the full rate) versus any negligible increase in the city and county budgets (plus any property-taxes based special districts) it would clearly be a huge windfall for the local taxing districts.
But only if the business locates here. So just as a business selling a product with a huge mark-up will discount the price to make the sell, local governments should be willing to discount their windfall to compete for the business.
This is in addition to the jobs and additional spending in the community, which helps other people stick around and pay their property taxes.
Assuming this deal goes together, I can pretty well assure you that Prineville and Crook County will not be losing money on it.
Jan 22, '10
Oh, people, people, can you not smell the smoke? Rome is burning. Simple chain of causation to my mind. Unlimited corp money in politics will surely lead to the loss of net neurtrality. Bank on it.
Do you really think you can conceptualize a 'net without neutrality? We stand on the brink of a new dark age. Facebook being a pay site will be a minor wart if 'net neutrality disappears.
Jan 22, '10
Zara, I started HOLDING my nose when I heard it was FB. We now officially will be the home of the crime. :(.... the plundering, warehousing and shifty backside peddling of our data in different mercantile senses.
Hm: maybe then I can just drive down to P-ville and get the bastards to TURN OFF the damned Spam-Machine, and get my old account right back! Images of little Charles Wallace Murray standing in the nacreous thrumming light of "IT", and, against all odds: winning one for the individual and humanity....
Hum! Maybe not so bad afterall.
Jan 22, '10
Posted by: Darth Spadea | Jan 21, 2010 2:37:58 PM
Umm... Carla, didn't you rant about the ad on Oregonlive.com yesterday? Oregonlive is on that Interweb-thingy that Al Gore invented.
Popularized. I've had an internet account since '83. Gore made the statement in '95, I believe it was.
So, admit it, that you're really Bill, a Republican rabble rouser !
Jan 23, '10
Definitely had the same thought about Twitter, lamenting that I used to live about 4 blocks from them when I needed to get a point across and email just wasn't cutting it.
I'm going to start saying "Nacreous District".
Jan 23, '10
Facebookâs new 147,000 square-foot data center in Princeville is a real triumph for the company and the community. With 200 construction workers and 35 new full-time staffers, it will provide jobs but also promote green technologies like evaporative cooling.
If you are looking for green tech ideas or green investment advice, check out http://www.greencollareconomy.com. It has hundreds of case studies on green tech and the largest b2b green directory on the web.
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