ALTOONA, Iowa -- The Facebook data center in Altoona is about to get bigger, after the city council recently approved an expansion.
Social media giant Facebook now has the green light to build a $400 million building expansion in Altoona, which will also potentially add 70 new jobs to the area.
City leaders say this expansion will make future development in that area possible and even have some benefits for the businesses already there, but some residents and business owners are not happy with the tax break Facebook gets for the expansion.
Altoona City Administrator Jeff Mark said with the new agreement the city council passed Monday night, Facebook gets a 20-year deal where the company only has to pay $3 per square foot of this new building expansion instead of paying full property taxes.
After all of the agreements the City of Altoona has made with Facebook, Mark said the social media giant will be paying the city a total of $4.5 million every year and even helping development by adding a water pressure booster station.
“It will more than serve everything in our northwest quadrant so its future growth north of the interstate and the existing growth that we are having right now around the Outlets of Des Moines, Johnny's Italian Steakhouse, the hotels, that entire Prairie Crossing development they’ll all benefit form that booster station,” Mark said.
Mark said the money they’re getting from Facebook equals about 60 percent of what they would be paying in taxes, which some residents and business owners say is not fair.
“This makes absolutely no sense and what about the school system. Why does the city get to make deals? And so if they’re only going to pay 60 percent, they’re cheating the schools out of 40 percent,” Altoona resident Mike Harmeyer said.
Mark said they understand these frustrations but claims deals like this are all part of the economic development process.
“And if you’re going to be a growing community attracting these types of businesses to the community I think the mayor and council have done an excellent job of weighing through what the alternatives were sticking to their guns and coming up with this agreement to where the city does receive increased revenues from this expansion,” Mark said.
But residents still feel the city didn’t need to give Facebook this tax break.
“I’m sure they would have built them buildings anyway, but it’s just having proper management within the city to get these deals negotiated. Like I say, why is it Ankeny can get buildings built without having to tiff everything. It goes right down to the management of the city,” Harmeyer said.
Local business owner Joe Free said he thinks local businesses are continually being overlooked.
“The problem I have is the city has a tendency to overlook businesses they already have and roll out the red carpet for businesses like Facebook,” Free said.
Mark said the next step for the expansion is for Facebook to submit building drawings for approval. He believes Facebook could break ground by the end of summer.