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Facebook previously announced a “deal” with the State of NM to build and operate a huge data center in Los Lunas, south of ABQ.

Today they have announced an expansion of that facility to now cover 17 football fields. One of our PSA supporters, Gary, was talking about how NM should create Big Data Centers about 10 years ago now. Apparently, the connectivity is now present in the state to supply the biggest of data pipes. 

It’s unclear how this enormous data facility will support other jobs besides construction and a small cadre of technicians working at the ‘plant’. Probably a lot of the maintenance and software upkeep can be done from offsite. 

OTOH, support for growing” economic activity often involves a cluster of various facilities. These then bring in expertise… and functionality such as infrastructure…and eventually, reach a “critical” mass” stage of “where a new company” finds it advantageous to locate nearby. Perhaps we’ll learn more about those sorts of opportunities anon. Perhaps there will be extra bandwidth available for other companies?

In the short term, NM had to “give something to get something”. Fortunately, we have so much sunshine we can afford to give some of it away. Unclear if the other incentives are affordable, but states are often played against other states for this sort of development and the highest. bidder usually wins. NM bid for Elon Musk’s battery factory and lost to Nevada.

The economics of these “deals” are complex and involve projections of future costs and incomes over decades. Is NM better off not getting the battery factory, considering what it would have cost to outbid Nevada? Or, should a state desperate for economic activity have simply given Elon whatever he wanted?

Los Lunas agreed to give up property taxes for 30 years in exchange for annual payments starting at $50,000 and topping out at under $500,000, while the state promised billions of dollars in industrial revenue bonds and other economic development funding. State utility regulators also cleared the way for Facebook and Public Service Co. of New Mexico to create a renewable energy tariff, which allows the company to secure solar- and wind-generated electricity to power the data center.

 

Facebook says the Los Lunas facility will be one of the most advanced, energy-efficient centers in the world.

 

State economic development officials have estimated that New Mexico could gain about $75 million in gross-receipts tax revenue over the next decade from construction costs related to the project.

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