FORT WORTH -- Social media giant Facebook made official last week that it likes Fort Worth, as company executives joined city, county and state officials to turn dirt on a data center where servers will process news feeds from 1.5 billion users around the world.
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, then to four finalists.
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.
Tom Furlong, Facebook's vice president of infrastructure, said the Fort Worth center will be its "most efficient yet."
"We found a great set of partners," he said.
The Fort Worth center will help Facebook with its mission to connect the world, and "we want to connect the next 5 billion" from here, Furlong said.
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, and 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 the company said that figure could go higher. The jobs will pay an annual salary of at least $70,000.
The complex is estimated to generate millions in taxes, despite the incentive deals, because of the huge value of equipment at the site. Also, counting Facebook among the city's corporate citizens should attract other businesses and data centers, making incentive deals worthwhile, officials said.
"Data centers are great opportunities for the city to grow for the technology piece," Mayor Betsy Price said. "The future economic growth opportunities related to data centers and data warehouses are staggering. We are in an enviable position to attract global leaders like Facebook, and we are excited to welcome them to our community."
In addition to its Facebook users, the company needs to expand its 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.
"All of these continue to grow," said Michael Kirkland, a company spokesman. "This is just the tip of the iceberg."
Facebook has said the Fort Worth center will be the world's most environmentally friendly data center. It will be fully powered by a wind farm about 100 miles northwest of Fort Worth and will recycle water.
The Fort Worth location will be the company's fifth data center.
Facebook sought incentives with only 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.
Facebook, founded in 2004 and based in Menlo Park, Calif., will also benefit from a new state law, signed by Gov. Greg Abbott on June 10, that provides a tax incentive for large data centers looking to locate in Texas. Facebook now qualifies for a 20-year state sales tax exemption based on the size of its project.
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.
Facebook started looking for a site for a new data center in July 2014 but didn't make its first visit to Fort Worth until March, 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 short cut our process for recruiting other data center facilities."
Facebook recently closed on its purchase of the land for the data center from Hillwood, the developer of the 18,000-acre development.
SundayMonday Business on 07/13/2015