Don’t let a famous company dazzle us into a bad deal

Economic development and jobs are top priorities for us. As Salt Lake County mayor and as a state senator, we’ve supported many projects where businesses get tax support in exchange for creating good-paying jobs and bringing more economic growth to the state. But when taxpayer dollars are on the line, one question stands out: Is it a fair deal for taxpayers?

West Jordan City’s proposed data center project would be built on 230 acres of vacant West Jordan farmland. It will be highly automated and managed remotely with software installed on laptops. Initially, 50-70 jobs would result. The Economic Development Area plan put forth by West Jordan City asks for a total tax subsidy of $240 million — taxes that would come from the school district, the county, the county library, the state, and even city energy taxes for 20 years.
If you do the math, we’d be paying between $2 million and $3.4 million per job. That’s far more than has ever been spent by economic development officials to lure businesses such as eBay, Adobe or Boeing. Those companies not only support thousands of jobs, but also produce a multiplier effect, as they spend money locally for goods and services. The data center’s equipment is manufactured and purchased in China. Much of the building itself is pre-fabricated, trucked in and then assembled.

West Jordan City has provided shifting and incomplete budget numbers. We know that the city has approved projects whose terms were rejected by other neighboring cities and has a poor track record with past Economic Development Areas. Four EDAs that the city created went bankrupt or left Utah’s market; one only produced taxes for six of the projected 12 years; and one didn’t trigger any growth until six years after its approval. As elected officials who must balance our budgets and advertise every proposed tax increase, we must scrutinize these deals. A bad deal means less money to fund all the services our residents currently receive, a shortage for our school children, and a worst case scenario of having to raise taxes to make up a deficit.

We know that the proposed structures, which are essentially very large refrigerated buildings to keep computer servers from overheating, come with a legal contract for delivery of 4.8 million gallons of water per day. They may use less during the winter season, but the water must be available should they need it. Utah is the second driest state in the country. In our fast-growing area, water is a finite and a precious commodity and is essential to every current and future resident and business.

The data center company in question is worth billions of dollars and earns a profit of more than $22 million a day. We offer one vital ingredient other states cannot match — numerous fiber optic cables buried in the ground for them to connect to the Internet. In fact, Salt Lake County has one of the greatest densities in the country for fiber optic lines. We should not sell our real estate or our taxpayers short just because a famous name comes calling. The data center needs our location far more than we need the 50-100 server manager jobs it offers.

Openness and accountability for how we spend your hard-earned tax dollars is our priority. Our duty as public servants is to shine a light on any deal that involves taxes and billion dollar private corporations. After all, it’s your money.

This op-ed was originally published in the Salt Lake Tribune on August 19, 2016.



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