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Facebook to build $800 million data center in Mesa

Facebook Inc. (Nasdaq: FB) is about to make its first data center investment in Arizona, and it is a big one.

The Silicon Valley-based tech company and social media giant announced Thursday it is starting construction on an $800 million data center in Mesa.

The first phase of the Facebook Mesa Data Center will consist of two buildings totaling 960,000 square feet, and the first building should be online by the end of 2023, said Rachel Peterson, Facebook’s vice president of infrastructure.

Once operational, Facebook expects the project to support approximately 100 jobs. The construction of the data center is expected to require up to 1,500 construction jobs at peak.

Facebook, under the pseudonym Redale LLC, closed on July 21 on 396 acres in Mesa on the southeast corner of Elliot and Ellsworth Roads for $123.2 million, according to documents filed with Maricopa County. The large property will allow Facebook to expand its Mesa operations to five buildings in the future, when the demand arises, Peterson said.

“This center is to help us keep up with the growing needs of the business,” Peterson said.

Technology companies like Facebook need data centers to store digital files as well as for processing. With millions of people using Facebook and its other brands like Instagram and WhatsApp, the company has a lot of data and needs these centers to make their products run smoothly.

High-profile neighborhood

Facebook is joining several large data centers already operating or under construction in east Mesa. Facebook’s center will be between Apple’s and Google’s data centers on Elliot Road.

“Through significant investment, we’ve created this corridor to attract these big users. And these big tech companies follow each other,” said Dea McDonald, the general manager of Eastmark, the rapidly growing master-planned community where Facebook is setting up shop.

After Apple opened its facility in East Mesa half a decade ago, McDonald said more and more big companies started looking at Eastmark for large projects, with Google and Facebook deciding to build there. 

McDonald said Eastmark, which is a joint venture between Brookfield Residential Arizona and DMB Associates, was first contacted by the Arizona Commerce Authority in September 2020 about a large company looking for a lot of land to build a high-tech project.

While the process was secretive at first, McDonald said Facebook was easy to work with and the whole deal was done with no in-person meetings because of Covid-19. Everything was done over the phone or email, he said.

Eventually Facebook decided on the Eastmark land, and it went into escrow in January and closed in July. At more than $310,926 an acre, the land transaction was the largest Eastmark has ever done, McDonald said.

There continues to be interest in this area for large projects and McDonald thinks the presence of Facebook will increase the profile of the neighborhood.

“Arizona has become one of the leading destinations for data centers anywhere in the world, and with the addition of Facebook, we demonstrate once again our premier attractiveness for technology,” Sandra Watson, the president and CEO of the Arizona Commerce Authority, said in a statement. “We look forward to partnering with Facebook to prioritize sustainability and conservation as we add to Arizona’s already thriving technology ecosystem.”

A JLL study ranked the Phoenix-area No. 2 in data center growth in 2020 and Business Facilities magazine ranked Phoenix third for data centers in its 2021 rankings.

Mesa’s incentives

Facebook has been looking for a new data center site for more than 18 months, Peterson said. The company finally landed on Mesa because “access to infrastructure, opportunities for renewable energy development, strong talent for both construction and operations, and great community partners,” Peterson said.

These types of deals usually come with a handful of incentives or municipalities agreeing to build out infrastructure, but the Facebook deal with the city of Mesa is an exception.

“We already did it,” said Mesa City Manager Chris Brady. “Mesa has been working on the Elliot Road Corridor for a decade.”

Since the city has already invested millions of dollars into the water, sewer and street infrastructure along Elliot Road, large companies like Facebook are able to move into Mesa a lot easier, Brady said.

Sustainability play

Technology companies have come under fire in the past because of the large amounts of electricity and water data centers use. Facebook is trying to counter that by designing more energy-efficient data centers and by helping restore water in other parts of the state.

The company partnered with Salt River Project to build three new solar projects in Pinal County, which will power the Facebook Mesa Data Center. Facebook’s Peterson said the first solar project will be up and running by the end of 2022, so Facebook will be able to use that renewable energy source during construction and from Day 1 of data center operations.

The Mesa project was designed to use 60% less water than the average data center, Peterson said. But Facebook has also committed to funding water restoration projects around the state. The projects Facebook is committed too will restore more than 200 million gallons of water per year in the Colorado and Salt River basins and will cover at least the water consumed for the data center use, Peterson said.

Brady, Mesa’s city manager, said Facebook’s commitment to these projects, as well as what it intends to do in the community and Mesa schools, is another benefit of having the company here, along with the jobs and tax revenue.

This report was updated to include comments from a representative from Eastmark, the master-planned community where Facebook is planning to build.

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