In what is currently 500 acres of open fields, Eagle Mountain City leaders envision a sprawling data center that jump-starts development on Utah County’s west side.
And that vision could soon be a reality, after members of the Utah County Commission voted Tuesday to approve roughly $150 million in property tax incentives to lure an as-yet-unnamed company — that sounds an awful lot like Facebook — to the southern end of Pony Express Parkway.
“Ideology aside, all the politics aside, our council decided that this was what was best for our community,” said Ifo Pili, Eagle Mountain’s city administrator.
Pili told commissioners Tuesday that the city conducted a study of the data center’s likely impact, finding little downside and the potential for outsize community gains.
The property — between a mink farm and water-treatment plant — currently generates roughly $66 in combined annual property taxes, Pili said. That tax bill would increase to roughly $837,000 in the project’s first phase, including incentives, with additional phases of construction anticipated in the future, according to city projections.
Tax revenue would be split among the city, county, Alpine School District, Unified Fire Authority and the Central Utah Water Conservancy District, with the incentive package lasting 20 years. After that term expires, property tax collections would jump to millions of dollars annually.
And under the agreement, the unnamed company would commit to funding up to $100 million in road and utility improvements, which would open the area up for continued development, Pili said.
“I’ll let you decide if anyone would ever come to a mink farm and a wastewater-treatment plant as their neighbors and provide billions of dollars of taxable value,” Pili said.
Eagle Mountain’s city council and Unified Fire have already approved the plan, with Alpine School District and the water conservancy district scheduled to vote on the issue Wednesday. All five taxing entities have to OK the plan for it to go through.
Despite the unanimous Utah County Commission vote, members spent roughly an hour Tuesday debating the merits of the plan and pressing for clarifications.
Commissioner Bill Lee said he was concerned about what he described as “the Nordstrom effect,” in which an entity requests a tax break as a condition of construction, only to vacate before the expiration of incentives.
“I’ve seen some of these things go the wrong direction,” Lee said. “They always come in with all these beautiful numbers. They always come in with all this great stuff.”
Lee felt comfortable casting a vote in support, he said, after assurances that the tax incentives on the project’s various phases would be capped at a maximum 40 years, and that the improvements would remain in place independent of the company’s long-term future.
“That’s the beauty of this project,” he said.
In 2016, West Jordan City sought to land a Facebook data center by offering large tax incentives to the social media giant. That deal ultimately fell through amid opposition by Salt Lake County Mayor Ben McAdams and a vote of conditional support by the Utah Board of Education that sought to cap the company’s tax benefits.
That project went to New Mexico, which was offering even richer incentives.
Three months after the Utah negotiations ended, state lawmakers voted in a special session to approve a sales tax exemption for data centers. The move was seen by many as another attempt to woo Facebook to the Beehive State.
The unnamed company at the heart of the Eagle Mountain project would benefit from the tax exemption in addition to the proposed property tax incentives, according to Theresa Foxley, president of the Economic Development Corporation of Utah. But Foxley was unable to quantify the amount of the sales-tax benefit.
Asked about the identity of the company, Foxley said only that it is “a major technology company that wants to bring a data center to Utah.”
Foxley’s organization, a private nonprofit that contracts with the state, has facilitated negotiations between the company and Eagle Mountain city leaders. She said it’s rare for a private entity to bear the cost of major investment in roads and utilities, which is a primary reason the Economic Development Corporation of Utah is supportive of the project.
If the remaining taxing entities endorse the plan, she said, construction of the data center’s first phase could be completed in the next two years.
“As all of us continue to use more and more data,” she said, “these assets really are a critical infrastructure.”
When asked about the failed negotiations between West Jordan City and Facebook, Lee commented that there are parallels between that proposal and the current plan for Eagle Mountain. He declined to comment further, or to identify the name of the company seeking incentives in Utah County.
“You draw your own dots on that one,” he said.