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Facebook data center could have far-reaching impact on Fort Worth

From left, Fort Worth Mayor Betsy Price, Texas Governor Greg Abbott, Facebook’s Thomas J. Furlong, State Rep. Charlie Geren, Ross Perot Jr. and Stuart Staley of Citigroup Energy  joined other dignitaries at the groundbreaking event for Facebook’s   data center   in north   Fort Worth on Tuesday.
From left, Fort Worth Mayor Betsy Price, Texas Governor Greg Abbott, Facebook’s Thomas J. Furlong, State Rep. Charlie Geren, Ross Perot Jr. and Stuart Staley of Citigroup Energy joined other dignitaries at the groundbreaking event for Facebook’s data center in north Fort Worth on Tuesday. Star-Telegram

Facebook officials seemed a little overwhelmed by the huge Texas welcome they received Tuesday at a groundbreaking ceremony at the north Fort Worth site where it has begun working on a massive billion-dollar data center project.

“We’ve done groundbreakings before and typically they’re not quite this large,” said Tom Furlong, Facebook’s vice president of infrastructure. “Everyone’s been great to work with. We want a long-term relationship. This is a great welcome.”

But city and state officials indicated that perhaps it’s Fort Worth, and Texas, that should be overwhelmed. The data center complex, to be built at Texas 170 and Park Vista Boulevard, just east of the Cabela’s store on Interstate 35W, will eventually have more than 100 employees, but the economic impact will be far-reaching.

Texas Gov. Greg Abbott said bringing Facebook to Texas will help the state build an “even more robust and diverse economy. Make no mistake, this project does far more than just create jobs and add capital to the region. It is a magnet that high-tech companies are welcome to the state.”

Fort Worth Mayor Betsy Price, who gave Facebook’s California representatives an enthusiastic “Howdy, and welcome to Cowtown,” said city officials expect the data center to attract other businesses to Fort Worth.

“The future economic growth opportunities related to data centers and data warehouses are staggering,” Price said. “We are in an enviable position to attract global leaders like Facebook, and we are excited to welcome them to our community.”

Several cities considered

Rumored for months, the social media giant made official Tuesday that it will build a mega-data center in the city.

The groundbreaking culminated a year-long vetting process that took Fort Worth from being a candidate among 220 cities to a much more narrow group of about 20, and then to four finalists. Sites in Austin and Richardson were considered.

The first of three 250,000-square-foot buildings is expected to be up and running by the end of 2016. Facebook’s investment in Fort Worth could reach $1 billion on the 110-acre site.

Facebook started looking for a site for a new data center in July 2014, said David Berzina, executive vice president of economic development at the Fort Worth Chamber of Commerce.

“The deal started a year ago and it tested the county’s and city’s negotiation process to the limit,” he said. “They asked for more than they got. Facebook is known for having the most thoroughly difficult vetting process in the data center space. They told us that it will shortcut our process for recruiting other data center facilities.”

Most efficient data center

Furlong said the Fort Worth facility will be its most efficient yet, since it started building its own data centers six years ago. It will have the latest in server and networking hardware, he said.

Facebook boasts 1.5 billion worldwide users who daily post 45 billion messages, view four billion videos and post two billion pictures.

“Facebook’s scale is unprecedented,” Furlong said. “Our mission is to connect the world. Just dealing with this kind of scale is a huge technological challenge. But our goal is actually bigger than than that. We want to connect the next five billion people.

“We found a great set of partners in the community who helped us move rapidly on this project,” Furlong said. “Facebook is going to continue to grow. We’re going to want to grow and continue this site. It’s likely more than what we’ve committed to already. This is our choice.”

The Fort Worth data center will be fully operated by wind power. Facebook said Tuesday it has partnered with Citigroup and Alterra Energy to build a 202-megawatt wind farm on 17,000 acres in Clay County, about 100 miles northwest of Tarrant County. Facebook will not own the wind farm, but will buy the power.

Talent pool a draw

Fort Worth, Tarrant County and Fort Worth Chamber of Commerce officials said Facebook was attracted to Fort Worth for the site’s location, the availability of an employee talent pool, as well as electricity and water capabilities, among other things.

To get them here, the city and county offered millions in tax incentives even though the data center will not create a huge number of jobs. Facebook is committed to at least 40 positions under terms of the incentives, but they say that figure could go much higher. The jobs will pay an annual salary of at least $70,000.

But the complex will generate millions in taxes, despite the tax breaks, because of the huge value of equipment at the site, and require little in the way of infrastructure spending. Also, counting Facebook among the city’s corporate citizens should help attract other businesses, and data centers, making incentive deals worthwhile, officials said.

In addition to its growing Facebook users, the company needed to expand data center capacity to handle growing demand from its 700 million Messenger users, 300 million Instagram users, as well as groups and companies using other Facebook platforms to build memberships and businesses.

The Fort Worth location will be the company’s fifth data center. As the groundbreaking ceremony began at the Alliance site, Facebook launched a new page, facebook.com/fortworthdatacenter, providing information about its new Fort Worth complex and job information.

Incentives used

Facebook only sought incentives with the city and county, but it will benefit from a new state sales tax incentive on data centers.

In May, the City Council approved grants on real and business personal property taxes over 20 years. If achieved, it will become the city’s largest incentive deal.

Under terms of the deal, the city will get most of its taxes upfront. In the first 10 years, projections show Facebook paying $21.9 million in taxes to the city and retaining $12.7 million in taxes. But the company’s portion grows to $63.5 million at 15 years and $146.7 million at 20 years.

By the end of 20 years, Fort Worth will receive $48.5 million in taxes.

Tarrant County Commissioners Court approved incentives including a 10-year abatement of up to 60 percent of new real and business personal property value for Tarrant County taxes and up to 40 percent for Tarrant County Hospital District taxes.

Economic impact

Facebook’s Forest City, N.C., center resulted in the addition of 4,700 jobs across the state, including the direct creation of 2,600 jobs, mostly in construction, according to the company. The company generated $680 million in economic impact in North Carolina.

And last year, a company-commissioned report said construction of its Prineville, Ore., data center through 2013 created about 650 local jobs with a $72.9 million economic impact, and 2,900 other jobs in the state and a $500.3 million economic impact. It also has data centers in Altoona, Iowa, and Lulea, Sweden.

Facebook said it has 130 employees in two buildings at its Oregon data center and more than 150 employees at its North Carolina center.

Last year, Facebook reported a profit of $2.9 billion on revenue of $12.5 billion.

Ross Perot Jr., whose Hillwood company is developing the 18,000-acre AllianceTexas development, briefly reminisced about growing up in the data center industry. His father, H. Ross Perot, founded Electronic Data Systems and later Perot Systems, early data center users.

“Not many people, when they’re 10 years old, ran around data centers like I did,” Perot said. “I look forward to bringing my dad to this new data center and let him see what the 21st century looks like. Data centers are the new steel factories.”

Facebook recently closed on its purchase of the land for the facility from Hillwood.

Sandra Baker, 817-390-7727

Twitter: @SandraBakerFWST

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