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Facebook has confirmed that it will be building a data center in the small central Oregon city of Prineville. The facility will eventually employ about 35 people and proponents say the building's construction will bring even more temporary work to the economically stressed region. The construction sector will see an immediate boost when Facebook begins hiring an estimated 200 people to build the 147,000 square foot structure, which the company says it hopes will reach LEED gold certification standards.
John Carr of Prineville's Office of Economic Development says there are a lot of things that made the city attractive to Facebook: the land that was available and the climate (which is key for cooling down the equipment the data center will house). Access to affordable power and tax incentives also played a big role. Prineville is situated in a long-term enterprise zone, which means that Facebook will not have to pay property taxes for their first 15 years in central Oregon.
Oregon is home to other large data centers — Google has one in The Dalles and Amazon was building one near Boardman. Both promised to bring jobs and recognition to the surrounding communities and while Google has become a big player in The Dalles since arriving in 2005, construction of the Amazon building has ground to a halt.
Do you live near a data center or work in one? Do you live in Prineville? How will the new Facebook data center affect you?
GUESTS:
- Sasha Pieretti: Self-employed house cleaner in Prineville
- Jason Carr: Manager of the Prineville office of economic development for central Oregon
- Tim McCabe: Director of Business Oregon
- Jim Wilcox: Principal broker and owner of Fadness Realty and city councilor in The Dalles
Tagged as: employment · facebook · jobs
Photo credit: Courtesy of Facebook
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though Google has employed some people in The Dalles, they are mostly lower income jobs like security guards etc. The Majority of people that work at google commute from troutdale. Overall Google gets a :( for supporting local community activities, schools, and infrastructure. but hey the few people that did get highered got good jobs so atleast some people beneifited.
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Please talk about where all this affordable power is coming from. BPA is tapped out, its customers will face market prices for load growth after 2010. Is PacifiCorp having a sale for big customers? Who is serving this load and how can they do it so "affordably."
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This is pathetic -- several days of media hoopla over the creation of 35 jobs -- which were lured here with tax breaks and cheap electricity made possible by the dams that have decimated our salmon runs.
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dams are not destroying the salmon runs over fishing is numerous other rivers without dams are seeing the exact same trends at oregon rivers
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Facebook's decision is pivotal in laying the groundwork for other companies to make the same decision to land in Prineville. While facebook will only employ 35, their civic involvement and desire to be a partner in the community will be a great addition to the economic vitality of Prineville and Crook County.
- Romy Mortensen, VP Sales and Marketing at Brooks Resources Corporation
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I appreciate the positive attitude and the mini victory (35 jobs), but I would rather Oregon investment in college education for a better future.
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How much will tax subsidies cost per job created?
Will the loss of tax revenue exceed the expected employee salaries?
--IF not why not just the give the tax revenue directly to the needy citizens?
Talk of the Nation did a story on a Google data center. Very few-- maybe 10% of jobs-- went to orginal local residents. Most hired were in their 20's. Many more moved in from Europe or big cities to take these valuable jobs.
It is my experience that these companies pick up and move as soon as the tax benefit ends...on to the next tax shelter haven...like Locust.
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"It is my experience that these companies pick up and move as soon as the tax benefit ends...on to the next tax shelter haven...like Locust."
And if they have created the local corporation as a wholly owned subsidiary they can just declare bankruptcy and avoid any fines or penalties for leaving early and not fulfilling their contract. They just walk away.
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is Facebook contractually obligated to stay beyond the 15 year tax break?
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I am not sure what is more uninteresting, the actual news that Facebook is moving to Prineville, or that people find controversy in this. There really isn't a whole lot to say about the new facility, other then it is good some jobs will be created. Anyone who has environmental or economic concerns about this project is delusional in their priorities and enjoys easy targets.
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True, but then again we all continue to cheer for the Blazers like we'll go to the finals...it's our delusional nature
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I've heard quite a bit about the arrival of Facebook, from the time Jason Carr of the Central Oregon Office of Economic Development was pushing the City Council to grant extreme tax incentives and vote without knowing the name of the developer, to now, when the "spin" being given is that the project will bring jobs to the community, and will encourage "green" construction. Hogwash! The rich get richer, and the people of Crook County will pay for it.
As the former Mayor of a small town, I am sad to see the financial benefits being given away to this Corporate giant. All of the taxes which are being waived will have to be paid by citizens of the City, because Facebook will need City Services like any other development, including police protection, fire protection, sewer and water availability, and other system development services.
The employment of 35 individuals to run this service center will not come close to defraying the burdens being put on the shoulders of other Prineville taxpayers, and the "35" number is not even required for three years. Even if every one of the 35 employees spends all his or her salary in Prineville, the cost of the free tax ride will outweigh the benefits.
Too bad the City Council wasn't given a little time by the promoters in the mis-named Economic Development office to really evaluate the long-term effect. Mr. Carr was so eager to have his first "sale" completed that he coerced the Council like a used car salesman. "If you don't accept this week, they will look elsewhere".
If Jason Carr is still around in three years, ask him to evaluate the benefits to Prineville. Shouldn't take long.
Ed Sites, Madras, Oregon
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Thank you for this perspective, you summarized why big companies coming into small vulnerable communities is advantageous to the corporation and not for the communities succinctly. Thanks.
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Ed,
Since May of 2009, the Mayor of Prineville, Mike Wendel, and the County Judge, Mike McCabe, were heavily involved in numerous meetings about this project. The entire planning staff with the city, and the county planning director were also involved. This project was never "pushed" through by me as you suggest, becuase it had to get the support of community leaders. If you'd like to know just how hard I "pushed" you should call the mayor and judge and ask for yourself.
Also, the tax incentives offered to Facebook are available to any exisiting business in Prineville. It's not as if the company somehow got a "sweatheart" deal. Also, nothing is being taken away from the exisiting tax base, and nearly $500,000 of additional revenue will come into the city/county when the project is complete. This more than pays for the impacts to police/fire, which are minimal anyway.
As for the citizens having to pay for this, that too, is false. Facebook is paying for all the infrastructure in order to operate. They will build a substation and own and operation themselves, which takes the burden off Pacifc Power. Also, the company paid it's full SDC's for city development costs, will repave Tom McCall road when construction is complete, and also paid nearly 200,000 to help improve the interection of Tom McCall and Hwy 126.
The city council and county court had months to weigh this program. I spent time with each of them individually and provided all the information I could, including impacts. Some of the councilors also took it upon themselves to speak with staff about the project. So your accusation of me being like a used car salesman is insidious at best. I'm sorry you have chosen to attack my character without knowing any details of the project.
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If measure 67 passes does this mean that Facebook won't pay the new corporate minimum tax?
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The corporate minimum tax is based on sales, and unless Facebook has sales that originate in Oregon (which is highly unlikely anyway), they wouldn't be subject to the tax in the first place.
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You've got to love our state goverment. First they pass a tax against corporations for "not paying their fair share" and then they grant tax exemption to get these same corporations to come to the state.
What about the little guy who doesn't get these exemptions ??
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TryPod,
The little guys have the same access to this program as Facebook. There are seven small businesses in Prineville utilizing the enterprise zone as we speak.
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If Prineville is so great, ask yourself why aren't Facebook executives moving there themselves?
In fact, a number of companies are building data centers in random rural areas. It is only slightly less outrageous than outsourcing jobs overseas.
Data center jobs are near the bottom end of the IT skills spectrum. A data center does not draw top-notch talent. A data center will not incubate further tech industry the way a Tektronix or HP did. Remote data centers are all about exploiting labor to minimize costs. Few tech workers will want to relocate to an industry backwater that has only one employer for their field. If they do relocate those workers know they will have to move and uproot their families if they ever want to change jobs. That gives the employer huge bargaining power on wages. Further, companies use the fact few skilled workers would want to move to these rural areas to exploit the H1B visa program to bring in foreign workers at sub-par wages.
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Who is being exploited? I really don't think there is much exploitation of US workers by tech-companies. What bargaining power? If the company never moved there, there would be nothing to bargain about. So if you open Facebook in Portland it is okay, but if you do so in a rural area it isn't? The logic of this whole issue is so weird to me, I can't even begin to understand what the kerfuffle is, or could be about. I feel like we are arguing over Madonna moving to Manhattan or Jersey.
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Allan,
I fail to see your logic as well. So, datacenters (which, by your own admission are "at the bottom of the IT spectrum"), are somehow better in large urban areas, but not in rural areas? Also, why would company executives (which oversee thousands of employees) relocate to oversee a staff of 35? Your entire rant against "big business" seems a bit prejudiced and contradictory.
You may have your own reasons, but I see this as a positive influx of revenue into a depressed economy which has seen the death of it's timber industry, the exodus of administrative jobs from it's signature employer to Bend, and could use the boost to local business, real estate, etc. that will all follow from this project.
And in this current economy, I'd be willing to bet they can find people willing to relocate to Prineville for the promise of employment with benefits and steady income.
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Sorry to be repetitive here, but where is all this cheap power coming from?
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We'll get to this. Promise.
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Dot com technology businesses come and go. What happens if Facebook fails or is bought by a larger company that closes the data center within 15 years? What will happen to the area economically in that case?
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I guess it won't do so well. But considering it has nothing else going for it---you gotta gamble a little, or at least try. Kind of like love, you could get hurt, it could not work out, but if you want it, you take the risk. Do we not want the animals to get a taste of the good life, cause they might leave the farm?
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An interesting aspect of these new jobs that are the future is that they don't require or need for you to have a college degree. Running a data structure requires aptitude and skills that one does not acquire in our school system. This infrastructure is so important that employers must look for a particular kind of person and their skill set. They don't care if they graduated from college if they prove their abilities. Abilities that they cannot learn in a college.
These are good jobs and ones you won't be spending your earnings paying off college loans.
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Will the data center be built with green initiatives in mind? Many new data centers try to reduce their energy footprint by minimizing the amount of air conditioning they use, for example.
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When I first heard of this deal I thought it would be great for Prineville.
Now I see what it really is, is textbook example of America's race-to-the-bottom corporate welfare program. An an illustration of why Oregon's finances are so strained.
Those aren't 'tax incentives'. They are tax-shifts.
A 95% reduction in property taxes. Essentially shifting the burden of all the services Facebook and its employees will demand onto the existing property owners.
No wonder property owners feel they're getting less services for more money! That is exactly what is happening when these corporations get these tax shifts.
They might call it a benefit for Facebook but it's certainly a liability for the rest of the community.
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If it was any other company that didn't have the brand recognition that Facebook has, there would not be this level of discussion. I have lived in Central Oregon for over 20 years and have seen its boom and bust cycle. 35 jobs is nothing and at this point all Facebook managers are commiting to, is ensuring that Prineville residents can apply for the jobs. Nothing more. This is just another example of "There will Be Blood", where the company comes to town and exploites the locals, who hold out that they might get something in return. It is time for those who work in the economic development field admit that they have other motives, than just community development.
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Nice There Will Be Blood reference. Exactly right. The locals are left to fight for scraps while the real money and value resides elsewhere. In the Facebook version, Daniel Plainview laughs all the way to the bank as he watches the melee from a safe distance.
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With a'Bombo pushing the battery power'd eco very un-frienly auto zone and the new electro'power stations that will be required to supply power to these very non-eco friendly autos ( video on Utube : hummer vs, prius ) like water where are the root needs & long tirm sorces of water coal nat. gas and " FOOD "etc. comeing from ? We have have forest left directly related to very un-realistic growth and the demand of 3000 sq.ft. ego based housing ...Current overpopulation has already demanded more of our eco systems than they can give ... We have had to import food to supply our unrealistic population growth demands sence 1985 . In Oregon ,drinkable water sorces alone are a very deminishing supply ... Electro power of face'book and other developments is not availabe at a life saport level ... What is the true cost of the run'checked out of control greed over development ? This is not a good long turn investment for Oregon ... I'm 58 ; in my life I have watched the population of Oregon grow so large there is little nature left ... It seems that maybe it is time to simple think , at current rates of development there is little left for the child born in 2000 .... Face book and simalar development is not in ours or Oregons best intrest ...
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Once again, the Conservative Corporate Welfare State wins big.
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Frankly, I'm flabbergasted at the amount of comment a piddling 36 jobs have elicited. It's pathetic! The ship is sinking and someone is excited about winning the ship's daily run mileage?
Our economy is dying! Only mega solutions..structural in nature- are going to revive it. Out of the 400,000 plus jobs created last month ONLY 41,000 were in the private sector and most of those were for retailing China made goods.
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Quick comments that time didn't allow on program:
The comment in the Willamette Weekly blog referring to only the 'dregs' working locally in the Google data center in The Dalles was condecending and false. There are some very well educated local people working there along with management personel that relocated here from other locations. They have hired everything from home schooled self taught locals to recent computer science graduates from Oregon Universities.
There is only one small bus running between Troutdale and The Dalles for employees. With over 200 employees it represents a small percentage of the workforce.
30 living wage jobs is very significant to a rural community. I'm sure the unemployed in Portland would like to have news that 30 new jobs would be available there soon.
Northwest power is all cheap compared to the east coast and most of the midwest without having to subsidize it. Locals worry most about having a job because without it, they can't afford power at any price.
There is no tax shift. Property taxes are still paid on the land, use fees are paid on services, system development charges are collected for infrastructure improvements and the employees still pay taxes on their income and any property they own.
Non of this would be an issue if Oregon was still making use of renewable natural resources to support the economy. Unfortunately we have determined that the use of our most renewable natural resources is not politically correct. When the Governor declares that water is not a renewable resource rural Oregon is left with few choices. Junk science and irrational emotionalism has left us with no choices but 'information technology' as a source of employment.
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There is no tax shift. Property taxes are still paid on the land, use fees are paid on services, system development charges are collected for infrastructure improvements and the employees still pay taxes on their income and any property they own.
While this is the standard rhetoric of developers, it's nonsense.
Giving a large corporation a 95% tax abatement shifts the expenses onto the rest of the community. The consequence will be higher taxes paid by the non-subsidized property owners. That's you and me. And that is a tax shift.
Any income taxes paid by employees go to the State, not the county.
Finally, as we heard on the show, Facebook was given enormous benefits, that nobody else in Prineville gets, yet committed to virtually ZERO in return, other than agreeing to pay 5% of the taxes that would normally be due on that property.
No guarantee of jobs to locals in either constructing or running the facility.
The economic development folks got played. Too bad it's the citizens that end up paying.
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Posting "Anti-Corporation" drool is easy - creating family wage jobs is hard - will each "drool poster" please provide concrete examples of the family wage jobs they have created?
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You have it backwards.
The last thirty years of Conservatives De-Regulating Corporations and allowing them to grow into extremely large monopolistic Corporations like Wal-Mart has killed off hundreds of thousands of small and medium sized businesses and killed off millions of family wage jobs in the process.
Back when Corporations were Well Regulated under Liberal Ecocomics, there were a lot more family wage jobs constantly being created and those were stable long term jobs. There were lots of medium sized companies and small businesses that created the middle class.
The problem has been job killing Conservatism, not "Anti-Corporation drool".
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Well said, Tom.
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Most fascinating discussion and appalling performance! Big part of yesterday's election was about taxation of resident-but-out-of-state businesses, but no one on show seemed to know tax implications of Facebook's new installation, including our state official! Does Tim McCabe know what he is doing? Unless I missed something, the only factual piece of information was the 5% franchise fee ($4000-$5000) reported by City of Prineville's Jason Carr. Excellent questioning by Emily Harris of a gang who apparently cannot shoot straight! Is it telling that the most cogent voice was that of a realtor (Jim Wilcox)? McCabe needs to pray that the Governor does not hear a tape of this show. Sheeesh!
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So, is Fakebook going to be granted property tax waivers for some amount of time, the way our idiot city council did here in Eugene in order to attract Hyundai (which became Hynix) who bailed and eliminated 1400-1500 jobs the minute their waivers expired?
I'm sorry, but I see Fakebook (as well as Twitter and My Space) to be enormous time-sucks. I have yet to find anyone worthy of following on Twitter...who really gives a rat's caboose what some random teenager or pop tart (Britney, for example) is doing right now? Why should I waste my time following the tweets of someone who is famous for being famous? (Can you hear me now, Paris?)
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That´s great when big companies are coming to ecnomically stressed regions. It will support employment in this region.
Ornela, cheap hosting
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This comment has been removed by the TOL staff.
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Comments are now closed.
Hopefully Facebook Prineville will help alleviate unemployment in the area by creating supporting businesses as well. The area could use more than 200 temporary construction jobs and 35 permanent jobs. Good luck, Prineville. Don't put all your chickens in Facebook's data center. Continue diversifying your job base.