Bloomberg critiques RC Facebook investment

FOREST CITY, N.C. —Bloomberg news took a critical look at Rutherford County’s investment into the Facebook Data Center.

In 2010, Facebook announced a $450 million data center in Forest City, N.C., on the site of a razed textile mill. At that time Forest City had a population of 7,500 that had  1 in 3 residents living below the poverty line, and an unemployment peak of 19.8 percent.

Local officials traded hefty tax breaks for the promise of 21 full-time jobs with Facebook and 21 with its outside contractors.

According to Bloomberg, Facebook has paid $13.9 million in taxes into  Rutherford County, but received $13.5 million back in grants. There were also incentives from the state, which waived sales taxes on the center’s principal costs: computer equipment and electricity.

Some 275 people work at the data center- most in contract security. The Facebook partnership with nearby Isothermal Community College to form a “data center institute” to train people as server technicians is unsustainable with lack of advanced equipment and tools, run-down classrooms, little “real-world experience” and instructors who were unqualified for the course work and fast pace of a two-week, uncredited program. Neither Facebook nor Isothermal  would share a job placement rate of their 100 students with Bloomberg. Additionally the jobs those students were allegedly competing for were not with Facebook but with one of their contractors Milestone Technologies Inc. .

“We were dominated by textiles, and when they all started leaving, all those jobs left,” says Tom Johnson, president of Rutherford County Economic Development who brokered the complex deal. “We were looking for an option to diversify the economy.”

Bloomberg reported as part of its deal with Facebook, the county is obligated to inform Facebook of any public-records requests made about the deal and to give Facebook three days to respond before complying.

Meanwhile both Facebook and nearby Apple and Google Inc., are racing to develop hardware that can radically reduce the size of their data centers.The tech companies, however, have worked aggressively to advance and automate their data center hardware, decreasing the need for human technicians.

Bloomberg concludes that while Facebook has secured more than $300 million worth of tax incentives for the kind of advanced data centers, they rarely deliver much in the way of jobs. Read the entire article here.