A Data-Center ‘Cluster’ Bomb?

We’re approaching the anniversary of Facebook’s pick of Los Lunas for a new data center.

The state’s political class went more than a little batty over the tech giant’s announcement. At the time, the Foundation noted that taxpayers were forking over an immense “incentive” package for Facebook, and highlighted the inconvenient fact that employment at data centers runs fairly thin.

But voices from New Mexico’s corporate-welfare community weren’t interested in sober analysis. They implied that the data center was only a beginning. Governor Martinez hinted about “other things in the pipeline” — that the state could soon be seen as a “technology center that is going to be top-notch.”

Well, it’s nearly a year later, and nobody’s followed Facebook to the Land of Enchantment.

In our ongoing tracking of quality job-creation in right-to-work vs. non-right-to-work states, the Foundation has documented many announcements of data-center construction. Since Facebook’s Los Lunas decision, 21 investments have been posted on the “news items” page of Area Development‘s website. Alabama, Arizona, Georgia, Indiana (2), Iowa (2), Louisiana, Massachusetts, Minnesota, Nebraska, Ohio, Pennsylvania, Texas (5), and Virginia (3) were selected. So 17 of the data centers, or 81 percent, are slated for RTW states. Surprisingly, despite Silicon Valley’s solar-power fetish, the Southwest’s deserts are drawing scant interest. And education powerhouses (e.g., Indiana, Massachusetts) have landed investments alongside education backwaters (e.g., Louisiana, Alabama).

If Facebook is the start of something big, we’re not seeing any evidence yet. The industry is picking other states. A preference for RTW status is a clear possibility, but not much else reveals a consistent pattern of decisionmaking. The Foundation’s on the case. We’ll be tracking data-center construction from coast to coast, and hold the state’s pols accountable for the giddy promises made during last year’s “Facebook is coming to New Mexico!” hoopla.

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2 Replies to “A Data-Center ‘Cluster’ Bomb?”

  1. NM is such an unattractive place to do business, that the only way we can get discerning businesses to come here is with bribery in the form of tax incentives. Some smaller businesses that do not do their due diligence do come and typically rue their decision.

    To repeat the old Gary Johnson factoid: In the 1930 census, AZ’s population was 15,000 larger than NM’s. Today, AZ’s population is 5 million larger. Why did NM experience such anemic population growth compared to AZ?

  2. In addition to the usual suspects (education, crime, RTW, etc.), datacenters often come with a list of unique requirements – including, geography (redundancy), geology (seismic), weather (e.g. Harvey), power, water, and latency considerations. Availability of an educated, high-tech workforce is also highly desirable. Austin seems to be getting quite a bit of the datacenter business – perhaps that is a comparison worth pursuing?

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