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Creating a lasting impact

An ECONorthwest report on the economic impact of the local Facebook data center shows many favorable results


Since Facebook chose Prineville to build its first data center in 2010, local leaders have often trumpeted its merits to the community.

They stressed that the job creation and ancillary benefits of first building, then operating the facility make the 15-year property tax exemption on future development well worth it.

Nevertheless, the decision has generated criticism among some residents who have claimed the City of Prineville and Crook County gave up too much in taxes for a business that wouldn’t deliver enough jobs.

Now, community leaders have a new document that breaks down the ways in which the data center has helped the local economy. Facebook released a study, commissioned by ECONorthwest, an economic consulting firm, that measure the economic impact of the facility on a regional and statewide level.

“The recent study further confirms that we have diversified our local economy,” said Prineville City Manager Steve Forrester. “That industry, not unlike a saw mill or any other type of industrial factory, has brought tremendous benefits to the community in terms of job opportunities for people in Prineville and also regionally.”

The study determined that, during the past five years, the Facebook data center has generated 651 jobs in Central Oregon, and 3,592 statewide. In addition, their total output from capital spending is $573 million throughout Oregon. The study further found that the data center generated $6.5 million in state income taxes during the four-year construction phase of its three buildings.

The operations side of the facility were linked to $64.7 million in output and 266 jobs in 2013. Every million dollars in Facebook payroll supports another $500,000 in income elsewhere in the state, and every 10 jobs at Facebook drives another 14 jobs in other sectors of the Oregon economy.

“All trade sector businesses create a multiplier effect. Each industry tends to have a different level of that effect,” said Crook County Economic Development Manager Russ Deboodt. “For Central Oregon and Oregon in general, that is a great multiplier effect ... That is a pretty strong number.”

Forrester agreed, noting that Facebook’s presence has resulted in a variety of employment opportunities, including a new electrical supply company, Eoff Electric, coming to town.

“We have opportunities for landscaping services, HVAC systems (services), service to backup generators, and security services,” he continued. “All of those ancillary components that are required to support this industry now are having a tremendous impact on our local economy.”

While the report paints an attractive economic impact picture in terms of job and tax revenue creation, it emphasized another way the community benefits that Deboodt feels is even more important. Since 2011, Facebook has contributed $965,000 to local charities, including schools and other nonprofit groups.

“That really shows them being a part of our community,” Deboodt said. “I think those are organizations that were hard-hit during the recession. Those are organizations that rely on outside funding to function at an adequate level and are very intolerant to fluctuations in the economy.”

While the report didn’t directly address it, local leaders noted that the other major benefit of Facebook choosing Prineville is the boost in local infrastructure, most notably power. Facebook spokesman Lee Weinstein noted that upgrades to the Ponderosa substation boosted electrical transmission capacity to Prineville by 400 megawatts.

Meanwhile, Commissioner Ken Fahlgren singled out upgrades to the fiber network as a benefit. He pointed out that part of the reason Les Schwab Tires moved its headquarters to Bend was a lack of internet fiber redundancy, and feels the upgraded local fiber ring spawned by Facebook will help attract and retain more businesses.

“When you look at something that is shovel-ready, this (infrastructure improvements) means (we are) more shovel-ready than when Facebook came to town,” he said.

Forrester concluded that, over the past few years, Facebook has not only benefited the local economy, it has become a part of the Prineville and Crook County community.

“Facebook is part of who we are, part of what defines this community, and part of what is going to take us into the future,” he said.

The Prineville Facebook Data Center’s economic impact study can be found at Facebook.com/prinevilledatacenter.com.



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