Facebook is expanding its data center footprint in Altoona, Iowa

Business / Tech

Companies like Facebook and Google often build in towns like this for the tax breaks and lower costs of doing business.

When most people think of Facebook or Google they think of California and Silicon Valley. That is, of course, where the companies main headquarters are located. But it takes a lot of computing power to store and move the massive amounts of data Facebook has to deal with. This is why they build data center buildings in towns like Altoona, Iowa.

Altoona, Iowa is located just outside of Des Moines and Facebook has been doing business there for a few years now. Business is so good that the company is now going to expand into a new data center in Altoona, Iowa. The company signed an agreement with the city which will waive property taxes for Facebook for 20-years on the new building, which comes in at 1-million square feet.

Companies like Facebook and Google often build in towns like this for the tax breaks and lower costs of doing business. California is expensive and using middle American towns for massive complexes often saves a significant amount of cash. The project in Altoona is known as “Project Sequelant” and consists of an H-shaped building that will be built adjacent to the other 1-million square foot data center Facebook has in the city.

Under the terms, Facebook will be exempt from paying property taxes on the new building for 20 years. But it will agree to pay the city $3 per square foot — or about $3 million — per year during that 20-year period once it finishes the project and moves into the building.

City administrator Jeff Mark said those payments are equivalent to nearly 60% of what Facebook would be paying per year if it were paying property taxes on the building.

Facebook will also pay for the construction of a new $500,000 pump station that will boost the water pressure for the data center, the Outlets of Des Moines, Bass Pro Shops and other undeveloped lands.

The terms of the development agreement were kept secret from the public until the hearing for the agreements at Monday’s Altoona City Council meeting. Mark said there was a confidentiality agreement between the city and Facebook over the terms.

The terms of the development agreement approved Monday will also cover any future development by Facebook within the 20-year period, he said.

Des Moines Register

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  Source: Des Moines Register

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