Idaho’s AI Data Centers: Promises and Realities

The Case For AI Data Centers in Idaho (Pro-Data Center Perspective)

As proponents argue, large-scale data centers – like Meta’s new facility in Kuna – bring significant benefits to Idaho’s economy and communities. Acting as a spokesperson for these projects, we can highlight a number of positive impacts, from massive capital investments and construction booms to long-term tech sector growth and infrastructure upgrades.

Major Capital Investment & Job Creation

One of the clearest benefits is the sheer scale of investment and the jobs created. Meta’s Kuna Data Center alone represents an $800+ million investment in Idahodatacenters.atmeta.com 1. This huge capital infusion stimulates the local construction industry and related sectors. At the peak of building activity, around 1,000 skilled trades workers have been on-site constructing the 960,000-square-foot data centerdatacenters.atmeta.com 2datacenterdynamics.com 3. These include electricians, carpenters, metalworkers, plumbers, and many other trades – a boon for contractors and laborers in the region. Indeed, Meta has worked with general contractor Hensel Phelps along with local partner Engineered Structures, Inc. (ESI) and other Idaho-based subcontractors, bringing in 1,000 construction jobs at peak for the Kuna projectdatacenterdynamics.com 4. Supporters note that such projects can sustain hundreds of construction jobs for multiple years, given the size and complexity of building a modern data center campus.

In terms of permanent employment, the data center will create around 100 full-time operational jobs once completeddatacenters.atmeta.com 5. These are high-quality tech and engineering jobs, including data center technicians, facility managers, electrical and mechanical engineers, security staff, and other support roles. Importantly, these positions tend to offer competitive salaries and benefits. For example, similar Meta data centers in other states have been cited as “high-paying” opportunities requiring advanced technical skills. Proponents argue that while 100 jobs may sound modest, they are high-value positions that diversify the local job market and can help keep Idaho’s talented STEM graduates in-state.

Beyond direct employment, boosters emphasize the indirect job creation and multiplier effects. Data center proponents often point to studies indicating that each data center job supports many more in the broader economy. For instance, an analysis by commercial real estate firm JLL found that for every one job inside a data center, about 3–4 additional jobs are generated in the local economydbsg.com 6. These indirect jobs come from a range of supporting activities: vendors supplying the center, food and hospitality services for workers, maintenance contractors, increased retail spending by employees, etc. In Loudoun County, Virginia – a famous data center hub – the sector supported about 78,000 total jobs in 2023 when including secondary employmentdbsg.com 7. Even in more modest terms, a single large data center can be a catalyst for hundreds of ancillary jobs in trucking, security, cleaning, IT support firms, and other local services. From this perspective, the 100 direct jobs at Meta’s Kuna site could translate to 300–400 total jobs in the regional economy when multipliers are accounted for.

Crucially, attracting an $800 million project via Idaho’s targeted Data Center Tax Incentive (enacted 2020) is seen as a validation of the state’s business-attraction strategy. Prior to 2020, Idaho’s lack of a sales tax exemption on data center equipment put it at a disadvantage relative to neighbors (Oregon, Washington, etc., which had no sales tax or similar breaks)idahobusinessreview.com 8. After strong support from groups like the Boise Metro Chamber, Idaho Tech Council, and Idaho Power, the legislature passed the incentive to waive sales taxes on big data center investmentsidahobusinessreview.com 9. Almost immediately, Idaho became far more competitive: “With the passage of its data center tax incentive in 2020, Idaho is now very attractive for data centers,” noted the CEO of NetChoice, adding that companies started scouting Idaho once the incentive leveled the playing fieldidahobusinessreview.com 10. The Meta project – code-named “Project Peregrine” and negotiated with Kuna officials as early as 2017 – materialized soon after. Proponents can claim this as a win: state policy directly led to landing an $800M Meta campus, which might have gone to another state without Idaho’s proactive approach. The influx of construction work and future operations jobs are the “payoff” for Idaho’s economic development strategy of attracting out-of-state tech investment.

Infrastructure Improvements and Tax Base Growth

Beyond jobs, a major selling point is the infrastructure investment that data centers bring, which can benefit the broader community. These facilities require robust utilities – power, water, fiber optic connectivity, roads – and in building out these capabilities, data center projects often fund significant upgrades that strengthen local infrastructure for everyone.

Kuna’s experience is a prime example. As part of the Kuna data center development, Meta invested approximately $70 million to build a state-of-the-art water and wastewater treatment system on the city’s east sidedatacenters.atmeta.com 11. This system was gifted to the City of Kuna to own and operate, becoming part of the public infrastructure backbone serving newly annexed areas of the citydatacenters.atmeta.com 12. In essence, Meta paid upfront for a major expansion of Kuna’s water/sewer capacity – an investment that not only serves the data center’s needs but also dramatically improves utility service for future businesses and residents in that part of town. City officials heralded this as a crucial infrastructure boost that would have been hard to finance otherwise. Similarly, Meta collaborated with the city to implement a water reuse program, treating the data center’s wastewater to be used for irrigation of non-edible cropsdatacenters.atmeta.com 13. This innovative system provides Kuna with flexibility in managing water demand, essentially recycling water for agriculture and easing the burden on freshwater supplies.

Data center projects can also spur electric grid upgrades that have community-wide benefits. In Kuna, Meta has been working closely with Idaho Power on power delivery for the facility. The company’s commitment to 100% renewable energy (discussed more below) led to creation of a new 200 megawatt solar project in Idaho, as well as a new “green tariff” program (Clean Energy Your Way) that not only serves Meta but is available to other large customers who want to buy renewable powerdatacenters.atmeta.com 14. Additionally, the separate Gemstone Tech Park proposal (a 620-acre data center campus by Diode Ventures) includes plans to build a new electrical substation in coordination with Idaho Powerboisedev.com 15. This substation would improve utility access and reliability in the area – meaning local residents and businesses could see fewer power constraints and better service as a result of the data centers coming in.

From a tax revenue standpoint, large data centers can hugely expand the local property tax base. Even with certain tax breaks (e.g. sales tax exemptions), these facilities typically pay full property taxes on their land and buildings. Meta’s Kuna data center is projected to add approximately $725 million in new taxable property value once completedboisedev.com 16. To put that in perspective, this one project increases Kuna’s tax base so much that the average homeowner’s property tax bill could drop by about 4.8% once the data center is fully on the rollsboisedev.com 17. The Idaho Tax Commission estimated that a typical $535,000 home in Kuna might see its annual tax go down from $2,287 to about $2,177 due to the data center’s added valueboisedev.com 18. State legislators argued that forcing the data center’s value onto the tax rolls (and not into a special district) would provide tangible property tax relief to residents, “keeping our promise to the property taxpayers of this community”boisedev.com 19. In other words, the data center helps broaden the tax base, potentially easing the burden on homeowners over time.

It’s not just theoretical – in Loudoun County, VA, data centers have become an enormous tax revenue engine, now accounting for nearly half of all commercial property tax revenue in the countydbsg.com 20. That revenue funds schools, roads, and services for residents. Idaho officials likewise anticipate that Kuna’s data center (and others that may follow) will generate millions in property tax dollars annually for Ada County, Kuna, and local districts. Even during construction, permits and impact fees contribute funds. And unlike many other industrial projects, data centers place relatively light demands on services (few residents or schoolchildren, etc.), making them fiscally attractive. Proponents contend that this is a net win: high-taxpaying facilities with minimal strain on public services.

Additionally, companies often negotiate direct community contributions as part of development agreements, further sweetening the deal for locals. For example, Diode’s Gemstone Technology Park proposal included over $40 million in community payments negotiated with Kuna authoritieskivitv.com 21. This includes an upfront $500,000 contribution to the Kuna School District (earmarked for athletics and technology programs)boisedev.com 22, a $10 million commitment over 20 years to support the Kuna Police Department (helping fund additional officers)boisedev.com 23, and an anticipated $30 million to the Kuna Rural Fire District to enhance fire and emergency servicesboisedev.com 24. Those are direct infusions of cash into critical public safety and education needs – benefits that wouldn’t exist without the data center deal. Even Meta, which received certain incentives, has still provided over $500,000 in direct funding to Ada County-area schools and nonprofits since 2022 as part of its community give-backdatacenters.atmeta.com 25. Between increased tax base and negotiated agreements, supporters argue that data centers bolster local government finances, enabling better services or lower taxes for everyone.

Community Development and Philanthropy

Far from being isolated tech monoliths, data center companies actively engage in community development, philanthropy, and educational initiatives. Meta in particular has a track record of embedding itself in the local community and contributing to its well-being – a point the company emphasizes to build goodwill in Idaho.

Meta’s Community Action Grants program is a flagship example. In fall 2024, even before the Kuna data center was operational, Meta launched an annual grants program in Kuna to support local projects that “put the power of technology to use for community benefit” and improve STEM educationdatacenters.atmeta.com 26. These grants (typically awarded to schools, libraries, nonprofits, etc.) fund things like robotics programs, tech equipment for classrooms, coding workshops, and other initiatives to boost digital skills. Since 2022, Meta has provided 25+ local grants and sponsorships in the Ada County areadatacenters.atmeta.com 27 – ranging from funding school STEM labs to sponsoring community festivals. This direct investment in education and youth aligns with Idaho’s focus on improving workforce readiness in tech fields. For instance, Meta has partnered with the Idaho STEM Action Center and Idaho Business for Education to support STEM curricula and teacher trainingdatacenters.atmeta.com 28. Such partnerships aim to inspire the next generation of Idaho tech talent, who might one day work at facilities like the Kuna data center.

Moreover, Meta has been donating to a wide range of local community organizations – not just tech programs. The company’s Kuna Data Center info sheet proudly lists support for groups like the Kuna Food Bank, Kuna Parks & Recreation, Boys & Girls Clubs of Ada County, the Special Olympics Idaho, and even the World Center for Birds of Preydatacenters.atmeta.com 29. This breadth of engagement shows a commitment to integrating into the community’s fabric. Meta became an active member of local chambers of commerce (Kuna, Meridian, Nampa, Boise Metro)datacenters.atmeta.com 30, signaling that they want to be seen as a local partner, not a distant corporate entity. Their employees have volunteered in community projects and the company touts that it sources labor and materials locally wherever possible to support Idaho businessesdatacenters.atmeta.com 31. In short, the narrative is that Meta is a good corporate citizen: writing checks to nonprofits, yes, but also encouraging employee volunteerism and local procurement.

These efforts are often welcomed by community leaders, especially in smaller cities like Kuna. The data center’s presence has already elevated Kuna’s profile – Meta choosing the city signals to other companies that Kuna is open for high-tech business. City officials noted that Meta’s early involvement helped attract interest from other developers (e.g. Diode’s Gemstone Park) and even spurred discussions about improving local amenities. There’s also an element of civic pride: not every town can say it’s home to a cutting-edge AI data center powering services for billions of people. Kuna’s Mayor Joe Stear and Economic Development Director Morgan Treasure have touted the data center as a catalyst for turning Kuna from a bedroom community into a tech-forward employment centerboisedev.com 32. The urban renewal plans initially tied to the Meta project were intended to develop an industrial park so that other businesses would “hook up” to the infrastructure Meta providedboisedev.com 33 – keeping Kuna’s residents working close to home instead of commuting to Boiseboisedev.com 34. While the specifics of the UR district changed (due to state legislation), the city’s vision remains that Meta’s investment can anchor a broader “Gemstone Technology Park”, drawing multiple employers and creating a new commercial tax base in what was formerly farmland.

From a quality-of-life perspective, supporters claim data centers can be among the least disruptive industrial uses. They generate relatively little traffic once built, have no smokestack emissions, and operate quietly (especially compared to, say, a factory or a big housing subdivision). In public hearings, many Kuna neighbors actually spoke in favor of the proposed Gemstone data center park, saying they preferred it over alternatives like dense housing or large-scale solar farms that could have occupied that landboisedev.com 35. One nearby resident noted a data center “provides a lot less traffic, a lot less [impact]…our roads and school district can’t support big housing out there”kivitv.com 36. By contrast, a high-density housing development on 600 acres might add thousands of residents, overcrowding schools and roads. The data center, in their view, was quiet progress: it converts farmland to productive tax-generating use without dramatically altering the rural feel or burdening local infrastructure. This perspective was echoed by the narrow majority of Kuna city council that approved the rezoning in 2025 – they saw the data center as the best option for that site given limited water and road capacity for other useskivitv.com 37.

Advancing Sustainability and Clean Energy

AI data centers are power-hungry facilities, but companies like Meta are quick to stress their commitment to sustainability and minimal environmental impact – turning a potential concern into a touted benefit for the region. Meta has publicly committed that all its data centers’ electricity use is matched with 100% renewable energy, and its global operations have achieved net-zero carbon emissionsdatacenters.atmeta.com 38. In Idaho, Meta is following through by investing in new renewable energy projects that benefit the state’s energy portfolio. As mentioned, Meta facilitated the development of a 200 MW solar farm in Idaho – a huge boost to Idaho’s renewable generation capacitydatacenters.atmeta.com 39. This solar project not only helps power the Kuna data center with clean energy, but also feeds green power into Idaho Power’s grid for use by others. The creation of Idaho Power’s Clean Energy Your Way tariff (with Meta as the anchor customer) could attract other sustainability-minded companies to Idaho, knowing they can source renewable electricity heredatacenters.atmeta.com 40. In effect, Meta’s presence accelerates Idaho’s transition to renewable energy, supporting the state’s clean energy goals and reducing reliance on carbon-intensive power sources.

On the water front, Meta has made on-site water conservation a priority. Data centers traditionally can use significant water for cooling, but Meta’s facility is incorporating cooling technology “significantly more water-efficient than industry standard,” native drought-tolerant landscaping to cut irrigation, rainwater capture, and advanced water-saving fixturesdatacenters.atmeta.com 41. These design choices mean the Kuna data center will sip far less water than older designs. Additionally, Meta has pledged to be “water positive” by 2030 – restoring more water to watersheds than it consumesdatacenters.atmeta.com 42. To back this pledge locally, Meta is funding water restoration projects in Idaho, such as partnering with Trout Unlimited and Boise State to construct a side channel at Alta Harris Creek to improve stream flows and fish habitat in the Boise River watersheddatacenters.atmeta.com 43. Such environmental initiatives, completely funded by Meta, are a boon for Idaho’s conservation efforts. They help enhance water quality and wildlife in a way that likely would not happen without Meta’s involvement (and deep pockets). Being water-positive in arid Idaho is a strong selling point, showing that data centers can coexist with responsible water stewardship.

In fact, Meta’s Kuna Data Center is designed for LEED Gold certification for sustainabilitydatacenters.atmeta.com 44. That means it meets high standards for energy efficiency, low-carbon construction, and environmental innovation. The facility will use cutting-edge liquid cooling and AI optimizations to reduce energy waste, given that Meta re-scoped its design to support new AI hardware that is more power-dense but also more efficient in performance per wattdatacenterdynamics.com 45. Supporters note that housing these AI computational loads in a state-of-the-art facility in Idaho is better than having them in an older, less efficient data center elsewhere – from a global carbon perspective, Idaho’s center is part of a modern, green fleet of data centers.

Finally, data centers can act as anchors for improved connectivity and tech ecosystem growth. The presence of a hyperscale data center often necessitates building out fiber-optic networks to that location. This can improve broadband infrastructure in the surrounding area, which other businesses and residents can potentially tap into. Moreover, the data center puts Idaho on the digital map: it becomes part of the backbone delivering internet services worldwide. This can attract ancillary tech businesses – from cloud service resellers to hardware maintenance providers – to set up shop nearby, knowing a major Internet node is right there. In Pineville, Oregon, for example, Facebook’s data center attracted contractors and suppliers to locate in the region. Kuna’s tech park vision is similar: leverage Meta’s presence to draw other data-centric companies or suppliers. Proponents argue this could help diversify Idaho’s economy, traditionally rooted in agriculture and manufacturing, by growing a high-tech cluster in the Treasure Valley. In essence, the data center is not just an isolated box of servers; it’s the seed of a new industry segment for Idaho – one that aligns with the future (AI, cloud computing, digital services) and keeps the state economically relevant.


In summary, the pro-data center case emphasizes: Idaho’s aggressive business attraction strategy has yielded a top-tier project bringing huge investment, good jobs, tax base growth, and infrastructure upgrades. The Meta Kuna Data Center and the proposed Gemstone park will inject funds into schools, police, fire services, and nonprofits, all while using green energy and minimal water through advanced technology. They position Idaho as a player in the 21st-century digital economy, much as earlier generations recruited factories or micronics plants. Every claimed benefit – jobs, capital, community grants, tech diversification – suggests that these AI data centers can be a net win for Idaho and Idahoans, helping modernize the state’s economy without many of the downsides of other developments. By this account, data centers are strategic assets that any state would be lucky to host, and Idaho’s leaders have been savvy to prioritize attracting them.

The Case Against – Debunking the Myths & Weighing Local Alternatives

Now, switching roles, let’s critically examine those claims. When we peel back the PR spin, the purported benefits of Idaho’s AI data centers often evaporate – or pale in comparison to what homegrown small businesses could deliver. As a researcher tasked with exposing misrepresentations, it’s clear that many “benefits” touted by data center proponents are either generic (no different than any commercial project) or grossly outweighed by the costs and lost opportunities. Moreover, the quality of sources for pro-data center claims (company press releases, industry-sponsored studies) contrasts sharply with independent analyses that cast doubt on this big-corporate incentive strategy.

Sparse Jobs and Minimal Economic Ripple

Perhaps the biggest sticking point is job creation – the headline number for Meta’s Kuna Data Center is only ~100 permanent jobs. For a sprawling campus that devours hundreds of acres and tens of millions of watts of power, 100 jobs is astonishingly few. Even if those jobs pay well, the jobs-per-acre ratio is extremely low. Data centers are “large land-intensive but not job-intensive” uses that ultimately make a city’s economy less efficient, as Phoenix’s Deputy City Manager Alan Stephenson put itkjzz.org 46. He was describing why Phoenix is rethinking data center zoning: these facilities gobble up precious industrial land while producing very little employment. Kuna’s data center exemplifies this imbalance – 960,000 sq. ft. and 620 acres rezoned, for 100 jobsboisedev.com 47. For comparison, a typical light industrial or business park on that acreage could host dozens of small manufacturers, distributors, or offices, collectively employing hundreds if not thousands of Idahoans.

Supporters boast about 1,000 construction jobs at peak, but those are temporary and often not exclusively local. In reality, hyperscale data center construction tends to be handled by specialized national firms. Indeed, Meta brought in an out-of-state general contractor (Hensel Phelps) to lead the Kuna builddatacenterdynamics.com 48. While local firm ESI was involved, much of the highly technical work (electrical systems, cooling, networking) is done by crews that travel from project to project. The surge of construction employment is short-lived and largely benefits outside contractors who spend a few months in Idaho and leave. Contrast that with building a cluster of Idaho-owned small businesses: you would still need construction (spread over time as each business builds out), but nearly all those firms would hire local builders, electricians, etc. on an ongoing rolling basis. The small-business-driven construction activity might be steadier and more accessible to local trades over many years, rather than a one-time burst controlled by a mega-contractor.

What about the indirect jobs claim – the notion that 3–4 jobs are created per data center job? This often-cited multiplier comes from industry-sponsored analysis (e.g., JLL via a developer’s blog) and should be taken with skepticism. If one examines those 78,000 “supported” jobs in Virginia dbsg.com 49, many are likely service sector and transient roles (e.g. security guards, landscaping crews, hotel staff for visiting technicians) or jobs generated by the massive construction phase. These are not long-term, high-paying careers; they are mostly the kind of generic economic activity that any large project would induce. In other words, building a new shopping center or a factory could similarly claim multipliers – it’s not unique to data centers. Crucially, once construction is over, the ongoing multiplier for a data center is meager because the operation is so automated. A mere 100 employees on-site can only generate so much local commerce. If each of those workers goes out to lunch, yes, local restaurants benefit – but that’s no different than if 100 employees of a home-grown Idaho potato processing plant eat locally. The difference is scale: a 600-acre small business park could have thousands of employees whose spending truly sustains numerous other jobs (teachers, doctors, retail) in the community, whereas 100 data center staff hardly register in a region of 25,000 residents. Independent economists warn that the job-creating effect of data centers is negligible – especially relative to their enormous capital cost – and that their burden on resources is outsizedreddit.com 50.

The opportunity cost here cannot be overstated. By dedicating large tracts of industrial land and infrastructure to ultra-low-employment uses, Idaho is effectively forfeiting far more labor-intensive development. Small, locally owned enterprises employ more people per unit of output and per dollar of revenue than giant firms doilsr.org 51. They also are more likely to keep people employed during downturnsilsr.org 52. So every acre given over to a data center is an acre not available for a business that might hire 10, 20, or 50 Idahoans. Over time, the cumulative jobs lost by pursuing data centers could far exceed the token jobs gained. A growing body of research shows that communities with a higher share of locally owned small businesses have higher overall employment rates and more economic resilienceilsr.org 53. By contrast, regions that bank on a few large employers (especially ones with minimal staffing) face greater instability. If Meta were to change plans or automate further, those 100 jobs could dwindle or disappear – and there’s no diversified base of other employers on that site to pick up the slack.

In short, the claim that data centers “bring jobs” rings hollow. They bring a construction spike and then a hollowed-out permanent workforce. The quality of those few jobs might be good, but quantity matters for broad-based prosperity. From a jobs-policy perspective, data centers are an inefficient vehicle for employment, especially when compared to fostering, say, 50 small Idaho companies each hiring 20 people (that would be 1,000 jobs). Even Idaho’s Governor and Department of Commerce, while celebrating Meta’s investment, cannot hide the fact that the ongoing jobs are minimal. The fanfare instead shifts to other metrics like capital spending or the vague hope of “follow-on” growth, precisely because the direct employment impact is embarrassingly low for the size of the project.

Exaggerated Tax Benefits & Hidden Costs

Proponents lean heavily on tax base gains and payments to local government. It is true that a large data center will pay property taxes – but only if it doesn’t finagle its way out of them. The situation in Kuna became a case study in how these deals often undercut public benefit through special arrangements. The City of Kuna initially placed the Meta site in an Urban Renewal District (URD) to use the new property tax revenue for infrastructure (roads, etc.) rather than general tax reliefboisedev.com 54. State legislators cried foul, noting that the entire reason the legislature gave data centers a sales tax exemption in 2020 was with the expectation that their full value would hit the normal tax rolls to aid taxpayersboisedev.com 55. BoiseDev’s reporting showed that at most the Meta project would reduce Kuna homeowner taxes by 4.8% (around $110 on a $2,300 bill)boisedev.com 56. That’s nice, but hardly game-changing. As Kuna’s economic development director Morgan Treasure admitted, this was “far below the double digits of relief Kuna residents may have been expecting”boisedev.com 57. In exchange for that modest benefit, the city loses the chance to leverage the URD to attract a whole industrial park of businesses (which could have multiplied the tax base much more)boisedev.com 58. The state literally passed a new law (HB 328) forcing Kuna to remove Meta from the UR district, prioritizing a token tax break now over coordinated long-term developmentboisedev.com 59. This tug-of-war highlights that the tax benefit claims are often politicized and not as straightforward as advertised.

Even accepting that $725 million taxable value will be realized, consider the effective tax rate. Idaho has property tax limits, and large industrial taxpayers often appeal assessments or get devaluation over time. Furthermore, data centers depreciate – their equipment rapidly loses value and much of it is exempt from sales tax to begin with. The building shells may not appreciate like residential property; they could even qualify for abatements or come back seeking relief if they don’t operate at full capacity. Meanwhile, the community incurs ongoing costs: wear and tear on roads from construction, massive power infrastructure that ratepayers fund in part, local first responders needing special training for potential incidents at the data center (fires, etc.), and the looming question of water and electricity allocation (more on that shortly). These are opportunity costs and direct costs that are rarely tallied by boosters.

Consider also the negotiated payments like the $40 million to schools, police, fire over 20 yearskivitv.com 60. At first blush, $40M sounds generous. But broken down, that’s $2 million per year on average – much of it ($1.5M/yr for fire) is likely essential to provide services to the data center itself. If a huge complex is built in a rural area, the fire district must staff up to handle a potential electrical fire or hazmat issue there. So is that $30M to fire truly a “community benefit” or just mitigation of the risk the project imposes? Similarly, the police funding might be covering an additional officer due to increased patrol needs near the facilityboisedev.com 61. When developers pay these sums, it’s often because their project would otherwise strain local services that weren’t designed for an industrial use. A locally grown small-business park, by contrast, tends to grow incrementally, allowing city services to scale gradually. Many small businesses already exist in town without demanding a dedicated new police sergeant or specialized fire equipment. So the much-touted millions from Diode are not a gift so much as an impact fee to offset the burdens of their project. It’s a pay-to-play model: they pay the city, and in exchange they get the rezone and presumably some goodwill. This one-time influx doesn’t compare to the sustainable revenue generated by a diverse base of local businesses. Small businesses collectively pay property taxes too – and they don’t usually get 20-year deals legislated for special treatment.

On the state level, the incentives given to Meta are significant lost revenue. Idaho’s data center sales tax exemption means that Meta likely avoided paying sales tax on hundreds of millions of dollars in servers, generators, cooling units, and construction materials. At 6% sales tax, an $800M project might have foregone on the order of $30–50 million in state tax revenue to lure Meta. That’s money not going to Idaho’s schools or roads statewide. If the data center would have eventually come without that giveaway (as Mercatus research suggests is often the casemercatus.org 62), then Idaho essentially subsidized a rich corporation for a decision it might have made anyway (cheap power and land are the real drivers, not a relatively small tax breakidahobusinessreview.com 63). The Mercatus Center’s analysis of targeted subsidies concludes bluntly: “economic development subsidies only help their corporate recipients and the politicians that supply them. Other companies, local residents, and the economy at large are harmed.”mercatus.org 64. This holds true here: Meta gets tax breaks and PR benefits; politicians get to cut ribbons and claim they brought jobs; meanwhile local competitors and taxpayers shoulder the costs.

Mercatus scholars further point out that targeted incentives rarely change a company’s choice of location – companies choose places for fundamentals like workforce and logistics, not for one-time perksmercatus.org 65. If true, Idaho might have landed Meta’s data center due to our cheap hydro power and cool climate anyway, without handing out the exemption. And if not Meta, perhaps another tenant. Instead, the state set a precedent that any big data center can demand the same perks. It’s a classic race to the bottom dynamic, where states compete to give away tax revenue for projects that produce few jobs. Academic studies (and real-world fiascos like the Foxconn deal in Wisconsin) show that these subsidy deals often fail to deliver anywhere near the promised economic benefits and can even reduce overall economic activity when you factor in the cost of the incentivesmercatus.org 66. Idaho’s pursuit of big outside companies is part of a broader pattern that neglects local business development in favor of “elephant hunting.” The Mercatus Center and others have extensively critiqued Idaho’s approach of focusing on Business Attraction; it’s a strategy that might win headlines but does little for sustainable prosperityleastregulatedstate.com 67mercatus.org 68.

Another consideration: data centers are capital-intensive, not labor-intensive. That means most of the money sunk into them goes to equipment and technology (servers, switchgear, cooling plants) often purchased from out-of-state vendors, not circulating in the local economy. The multiplier effect for that spending is mostly felt in Silicon Valley (where the servers are made) or overseas (for chip manufacturers), not in Ada County. Yes, some construction dollars flow locally, but once operational, a data center’s main ongoing expenditures are electricity (paid to the utility) and hardware refreshes (again largely out-of-state). Contrast with a local small business: its expenditures on supplies, services, and profits largely stay local. Studies consistently find that locally owned businesses recirculate a far greater share of each dollar back into the community than absentee-owned firms doamiba.net 69. For example, a classic study in Maine found $100 spent at a local independent retailer generates $45 in local secondary spending, versus only $14 when spent at a big national chainamiba.net 70. With a data center, the ratio is even worse than a chain retailer – local spending is minimal once it’s built (some maintenance contracts and utilities). The vast majority of value created by the data center (the digital services, the advertising revenue Meta earns, etc.) flows right out of Idaho’s economy to Meta’s headquarters and shareholders. Idaho effectively functions as a colony providing land and power in return for a sliver of the value.

Negligible Community Integration and “Anywhere USA” Effect

Data center advocates would have you believe these facilities enrich community life via grants and philanthropy. In truth, corporate contributions from Meta or Diode are modest and self-serving, especially compared to what a thriving local business sector contributes organically. Meta’s widely advertised $500k to local nonprofits since 2022datacenters.atmeta.com 71, while appreciated, is a drop in the bucket. For context, $500k is 0.06% of Meta’s $800M capital spend here – basically a marketing budget item. Meanwhile, Idaho’s 200,000+ small businesses collectively are a powerhouse of community giving and involvement. According to the U.S. Chamber of Commerce and SCORE, 75% of small businesses donate to local charities, averaging 6% of their profits donated annuallylnpmediagroup.com 72. Moreover, “compared to larger businesses, small businesses donate 250% more to local nonprofits and community causes” on a proportional basislnpmediagroup.com 73. They do this not for PR, but because the owners live in the community and genuinely care about local causes. They sponsor Little League teams, they fundraise for school bands, they volunteer on city committees. This embeddedness of local businesses creates a social fabric and level of civic engagement that a remote tech giant simply cannot match.

Meta’s approach – writing checks to the Chamber of Commerce or partnering with an Idaho STEM program – is fine, but it’s arms-length charity. It doesn’t replace the day-to-day presence of locally owned businesses whose owners are at the PTA meeting or leading the local Rotary Club. A community dominated by big outside corporations often becomes what the American Independent Business Alliance calls “Anywhere, USA” – a place lacking unique local character, where one town feels the same as the next because the economy is homogenized by national chains or single-purpose facilitiesamiba.net 74. If Kuna’s future is dominated by walled-off server farms run by out-of-towners, that doesn’t build community. It might bring shiny new roads (if we’re lucky), but it doesn’t bring the sense of place that a vibrant local business community does. Small, independent businesses are strongly linked to greater social capital and civic well-being in numerous studiesilsr.org 75. People know the shop owners on Main Street; those businesses give a town its identity and keep wealth circulating among neighbors. In contrast, a massive data center is a black box – few locals work there, and its contribution to daily community life is essentially nil (you can’t shop there, eat there, or even enter it without security clearance).

Even the touted educational partnerships warrant scrutiny. Meta’s grants to schools for tech might buy some Chromebooks, but Idaho’s own entrepreneurs and industries could do the same if nurtured properly. A locally owned tech company, if it grew on that land instead of a Meta center, would also likely engage with schools and offer internships – with the added benefit that the students could aspire to work there and maybe someday own a piece of it. With Meta, Idaho students are being trained perhaps to become one of 100 data center technicians (a narrow path) or more likely they’re being groomed as users of Meta’s platforms rather than creators of our own Idaho intellectual property. The intangible benefit of homegrown businesses is that they create role models and reinvest profits into new ventures locally. Meta will not be spinning off new Idaho startups; small business owners, on the other hand, often mentor others and seed new enterprises.

Strains on Power, Water, and Opportunity – The Elephant in the Room

Proponents tried to sidestep the immense power and water demands of these AI data centers by framing it as a “they’ll pay for what they use” situation. But the reality is stark: a single 960,000 sq ft AI data center can draw on the order of 100+ megawatts of electricity (enough to power tens of thousands of homes) and millions of gallons of water annually for cooling (even with efficiencies). This has profound implications. Idaho’s relatively inexpensive power isn’t unlimited – diverting 100 MW to Meta is 100 MW not available for other uses or requiring new generation. Meta’s 200 MW solar project notwithstanding, the intermittent nature of solar means backup from the grid. Idaho Power had to craft a special tariff, essentially bending over backwards to accommodate one giant userdatacenters.atmeta.com 76. And while Meta will pay its electric bills, large industrial users often get discounted rates or special contracts that shift costs onto other ratepayers. Local residents could see their utility bills creep up or their service reliability affected as more data centers connect. The state’s water resources face similar pressure: if multiple data centers (Meta plus Gemstone’s five proposed buildings) come online, they could claim a significant chunk of the region’s water allocation (even recycling helps only so much). In a dry summer, will that impact farmers or trigger future water restrictions? These questions were beyond the scope of this research, but they highlight how the costs of supporting a power-thirsty, water-thirsty facility are externalized onto the community and environment.

During Gemstone’s hearings, some neighbors raised concern that 10 years of construction and heavy truck traffic for the phased build-out will wreak havoc on Kuna’s roads and quality of lifekivitv.com 77. That decade of disruption is a cost not reflected in the rosy economic projections. A gradual build-out of mixed small businesses wouldn’t be nearly as intensive or invasive – and would allow infrastructure to catch up step by step. Data centers, however, tend to be all-or-nothing: huge projects dropped in at once. The community bears the hidden costs of noise, dust, road wear, and potential lowered air quality from diesel generators and construction equipment. These may not show up in a cost-benefit sheet, but residents feel them.

Critically, when comparing to a small-business industrial park alternative, the data center falls flat on every metric of community benefit. Let’s envision the alternative: Say Kuna took those ~600 acres and parceled it into a business park for 100% Idaho-owned small and mid-sized businesses – manufacturers, agri-tech firms, local logistics companies, craft producers, startups, etc. The economic and social benefits of that scenario would likely dwarf what a data center provides:

  • Jobs: Instead of 100 jobs, a diversified park could sustain many hundreds of jobs, accessible to a range of education levels. Small businesses collectively employ 56% of Idaho’s private workforceadvocacy.sba.gov 78, and with the right support, they could scale up on that land, creating far more opportunities for Idahoans. There’s also a multiplier here: small local firms tend to use local accountants, local banks, local suppliers – creating a cascading employment effect that stays in-state, not outsourcing everything to corporate HQ.
  • Economic Resilience: With dozens of different businesses, the community isn’t hostage to the fortunes of one company. If one business closes, others still provide jobs. By contrast, Meta’s data center is a single point of failure – if Meta decided tomorrow to relocate its AI computing or discovered a way to do more with less hardware (not unlikely, given rapid efficiency improvements), Kuna could be left with a mostly empty shell. The risk of overspecialization is real; Mercatus analysts warn that subsidies often encourage overspecialization that makes communities vulnerable to downturnsmercatus.org 79. A small business park spreads risk and builds a culture of entrepreneurship, which is self-sustaining.
  • Tax Revenue vs. Cost: Many small businesses on that acreage would also pay property taxes and likely more in aggregate without special breaks. Additionally, local businesses typically don’t have the leverage to demand huge tax incentives – they grow with what’s available. So the city and state wouldn’t be forgoing tens of millions in incentives. Plus, locally owned enterprises generate more net tax revenue for cities with less public cost than sprawling corporate projectsilsr.org 80. For example, studies have found that big-box developments often impose costs (traffic, infrastructure strain) that can outweigh their tax contributions, whereas local enterprises tend to fit into existing infrastructure more seamlesslyilsr.org 81. In Kuna’s case, a series of smaller businesses might have been accommodated without needing an entirely new substation or $70M wastewater plant (or if needed, those costs would be shared among many beneficiaries). The city could use tools like Urban Renewal to systematically upgrade infrastructure as businesses come, recouping the investment from the growing tax base – exactly what was intended before the state yanked Meta out of the URDboisedev.com 82. The result could be a higher long-run tax yield and more of it flowing to general funds (not locked in deals for one user’s needs).
  • Community Engagement: 100 local businesses would mean 100 local owners or managers likely involved in the community, versus one community relations manager from Meta checking the boxes. The level of personal investment in community well-being is incomparable. Remember, small businesses donate 250% more locally than big businesseslnpmediagroup.com 83. We’d see more little league sponsorships, more volunteer firefighters, more local scholarship funds – because those businesses are part of the community’s fabric. And because they reflect local culture, the development could be done in a way that preserves Idaho’s unique character, rather than a generic fenced-off complex. The American Independent Business Alliance notes that proliferation of corporate chains and monoliths leads to cookie-cutter “Anywhere, USA” communitiesamiba.net 84. Conversely, a multitude of independent businesses can give Kuna a distinctive identity and charm, attracting visitors and talent who appreciate a community with local flavor.
  • Innovation and Long-Term Growth: Small businesses are the seedlings of larger economic growth. Many big employers start as small startups. By cultivating a small business park, Idaho could nurture the next Micron or J.R. Simplot from within, whose loyalty will be to Idaho. The data center does nothing to advance local innovation – it’s a closed facility serving an external company’s global operations. Local firms, on the other hand, often collaborate with local universities, cross-pollinate ideas, and spawn new ventures. The entrepreneurial ecosystem thus created can yield exponential returns in jobs and wealth that stay local. A data center is a technological dead-end locally; no new tech companies spin off from it, because it’s essentially a warehouse for servers. It doesn’t interact with local supply chains in any significant way (aside from maybe buying diesel from a distributor or contracting landscapers). It’s a cul-de-sac in the economy. In contrast, a community of small businesses interacts dynamically – a local packaging supplier gets business from a local food producer; that producer works with local farms; local IT consultants service all the businesses; and so forth, weaving a resilient network.

The Flawed Logic of Idaho’s Incentive Strategy

The broader issue underscoring this debate is Idaho’s heavy focus on wooing out-of-state corporations with incentives, versus investing in its own people and businesses. The data center tax credit and similar programs are emblematic of a strategy that assumes “big outside = good, local = incapable.” This strategy has been roundly debunked by independent experts. The Mercatus Center, in analyzing such policies, found that these subsidies often have no net positive effect on employment or investment decisionsmercatus.org 85. In many cases, they merely reward companies for doing what they would have done somewhere regardless, while draining public resources and hurting local competitorsmercatus.org 86. Idaho’s own experience bears this out: Fiberpipe, a local data center company, struggled to expand for years while lobbying for the tax break, only to see a behemoth swoop in when the break was passedidahobusinessreview.com 87. The local player (Fiberpipe) now faces a giant competitor benefitting from a tax environment essentially created at its behest. This is a classic case of the homegrown business being left in the cold while the state bends over backwards for a newcomer. Mercatus scholars describe this dynamic as subsidies encouraging rent-seeking and disadvantaging non-subsidized firmsmercatus.org 88 – exactly what’s likely happening in Idaho’s tech sector now.

Furthermore, reliance on big external projects can foster complacency in economic development officials. Instead of doing the hard work of cultivating local entrepreneurship (through education, infrastructure for small enterprise, networking, removing barriers for startups), it’s tempting to chase the next headline-grabbing relocation. But as Mercatus notes, real economic strength comes from fundamentals, not handoutsmercatus.org 89. States that pour money into marquee deals often find themselves poorer for it in the long run, especially if those deals underdeliver. The Foxconn debacle in Wisconsin – a $3B subsidy for a project that never materialized at promised scale – is a cautionary tale explicitly highlighted by Mercatusmercatus.org 90. While Meta will indeed build its center, the scale of benefit relative to incentives is so small that one has to ask: could those forgone tax dollars (and that land, and that power capacity) have been put to better use fostering 100 local enterprises? The evidence strongly suggests yes.

Even on the metric of “diversifying the economy,” data centers are a dubious tool. True diversification means developing industries that leverage Idaho’s unique strengths and build new capabilities among its workforce. Data centers do rely on Idaho’s cheap power, but they don’t particularly utilize Idaho talent (beyond a handful of technicians), nor do they create a cluster of suppliers with specialized skills (the high-tech components are all imported). So Idaho doesn’t become known for producing anything new – we’re just hosting infrastructure. It’s akin to leasing out a piece of land to a foreign entity; Idaho’s role in the value chain remains low. By comparison, imagine Idaho invested in helping local food processing companies move up the value chain, or local aerospace startups to prototype drones – these could create entire supply chains and know-how centered in Idaho. Small businesses drive innovation and capture more value locally, whereas being one node in Big Tech’s global network yields limited local value capture.

Lastly, consider community values and quality of life. Idaho prides itself on independence, self-reliance, and community spirit. There is something incongruous about a strategy that is “100% focused on business attraction bringing in out-of-state business,” as the user noted. It sidelines the independent Idahoan in favor of courting corporations that, frankly, have no particular loyalty to Idaho. If the tax structure or PR calculus changes, Meta could easily mothball the Idaho site (indeed, it paused the Kuna project in 2022 during a company-wide reorientationdatacenterdynamics.com 91). Small businesses, on the other hand, are rooted here – they don’t up and leave en masse because their owners are raising families in Idaho. When policies favor them, the benefits stick around.

By pouring incentives and scarce resources (power, water, land) into data centers, Idaho may actually be crowding out local entrepreneurs. For example, if Idaho Power’s capacity is tied up in serving data centers, it might be harder for a new manufacturing plant to get the electricity it needs without costly upgrades. If real estate prices surge because big players buy up land (Meta’s arrival already likely increased speculation in Kuna – e.g., Diode Ventures rushing to assemble 620 acres), local businesses may be priced out of land or leases. This kind of displacement is hard to quantify but very real. It leads to that “Anywhere USA” outcome where only big external companies can afford to operate, and the unique local ventures get squeezed out.

Apples-to-Apples: Data Center vs. Local Business Park

To crystallize the comparison, let’s do a simplified side-by-side using per acre metrics, since land is a fixed resource:

  • Permanent Jobs per Acre: Meta’s data center: ~100 jobs over, say, ~200 acres (the facility plus buffer) = 0.5 jobs/acre. Gemstone Tech Park (if 5 buildings, 100 jobs total on 620 acres) = 0.16 jobs/acre. A small business park scenario: conservatively, 10 businesses each on 10 acres, each employing 50 people = 500 jobs on 100 acres = 5 jobs/acre. Scale that to 600 acres (60 businesses): potentially 3,000 jobs. Even if that’s optimistic, clearly the orders of magnitude differ – small biz park could yield 10–20 times more jobs per acre than data centers.
  • Local Payroll and Income: 100 data center jobs, even at say $80k average, is $8 million annual payroll, much of which might go to people living in Boise/Meridian (commuters) and some possibly to in-migrant specialists. 3,000 small biz jobs at, say, $50k average is $150 million in payroll, overwhelmingly to local families. That’s a vastly larger injection of purchasing power into the local economy year after year, supporting housing, retail, services.
  • Tax revenue per acre: Data center might have high assessed value per acre due to equipment, but remember a lot of that equipment is exempt from sales tax and depreciates. A mix of smaller businesses – some warehouses (lower value), some light manufacturing buildings, some offices – could in aggregate match or exceed the value. Importantly, small businesses often don’t get lengthy abatement deals; they pay their property taxes in full from day one. So the city actually collects. In Kuna’s case, Meta being yanked out of UR means its taxes will go to general fund, but then state lawmakers want that to relieve homeowners rather than be reinvested – not exactly a windfall for city improvements beyond a one-time dip in tax rates. A URD with many businesses could finance infrastructure that in turn raises property values further (a virtuous cycle). The one big data center approach ironically led to political intervention that may deprive Kuna of leveraging the growth for more growthboisedev.com 92.
  • Utility burden: 100 data center jobs consume ~100 MW power; 3,000 other jobs might consume a fraction of that (unless heavy industry, which Kuna likely wouldn’t site there). So per job, the data center uses massively more electricity – making the economic output per kilowatt far lower. In an era where we consider energy efficiency and smart growth, data centers are arguably a wasteful use of energy for the local good they produce. The same power could run industries that create far more direct economic value and jobs locally. Water usage shows a similar pattern.
  • Longevity and Adaptability: If Meta’s facility has a 30-year life (common for data centers before obsolescence), what then? Idaho could be left with a giant concrete shell and environmental cleanup issues (diesel tanks, etc.). Small business areas tend to evolve – new businesses replace old ones organically. The infrastructure (streets, subdivided lots) remains useful. A single-tenant campus is harder to repurpose (who will want a million-sqft server warehouse later on?). So the small business park is a more future-proof investment in the land.

Given all this, it becomes clear that the so-called “unique” benefits of data centers are largely illusory or generic. Yes, any new employer will bring some jobs, spend money on construction, and pay some taxes. Data center proponents list these as if they are special, but they are the bare minimum any project brings. In fact, by those measures, data centers bring up the rear compared to other development options.

Take “contributing to the community” – as we noted, that’s not unique to Meta; any decent-sized employer, local or not, typically contributes to local causes (and small businesses do so disproportionately more). So trumpeting that as a data center benefit is misleading; it’s like praising a company for obeying the law – expected, not exceptional.

The heart of the matter is that after you strip away the fluff, Idaho’s AI data centers provide virtually no special benefit that couldn’t be obtained more robustly from nurturing Idaho-owned businesses. The only real advantage one might claim is that data centers have a huge capital investment (hundreds of millions) – but what does that money actually do? It buys machines that sit in a warehouse. It’s not building a product ecosystem in Idaho or creating an ongoing supplier network here. It’s mostly a one-time capital dump with very low multiplier locally. Ironic as it sounds, a dollar spent at a local bookstore circulates more in the Idaho economy than a dollar spent on Meta’s server hardware (which likely goes straight to a vendor in California or Taiwan). Local multipliers matter, and on that front data centers fail.

Even the argument of “if not this, then nothing – what else could Kuna do with that land?” falls flat. The narrative that “we’re just doing the best we can; at least it’s something” is a false choice. Idaho is growing and could pursue many development paths. That Kuna farmland could have become an Idaho Innovation Park filled with local entrepreneurs, or even a mix of housing and local businesses that generate construction and service jobs without special tax breaks. It’s not data center or bust.

In fact, focusing on outside attraction may be to the detriment of fostering local enterprise. There’s a concept in economic development: crowding out. By lavishing attention and incentives on footloose big companies, states can inadvertently neglect the needs of their small businesses – needs like workforce training programs, small-scale infrastructure improvements (broadband to rural towns), access to capital, etc. If Idaho’s economic development resources (time, money, legislative goodwill) go mostly toward landing a Facebook or recruiting the next large data center, that’s less bandwidth to focus on, say, a program to help 50 local manufacturers scale up and hire 5 more employees each (which would be 250 jobs). Mercatus and others have observed that targeted incentives can divert public funds from broader tax relief or services that would help all businessesmercatus.org 93. Instead of a narrow sales tax exemption for one industry, Idaho could have perhaps afforded a slight across-the-board tax rate reduction for all businesses – benefiting every local firm. But political capital was spent on the flashy but narrow goal.

To conclude this debunking: The “benefits” of Idaho’s AI data centers are largely a mirage or at best a wash when weighed against their costs and the lost alternative uses. The promise of jobs turns out to be a scant 100 positions, versus potentially thousands from local entrepreneurship. The vaunted tax contributions are relatively small per acre and often offset by infrastructure burdens or incentives given – whereas a multitude of local businesses would pay as they go and grow the base more organically. Community support from Big Tech comes in press-release-sized doses, while local businesses quietly pour far more into the community fabric every daylnpmediagroup.com 94. The sustainability claims, while commendable (renewables, efficient cooling), don’t erase the fact that these centers consume enormous resources to serve non-local needs, essentially outsourcing environmental impacts to Idaho without commensurate local gain.

Idaho’s unique identity and economic strength has always come from its people’s ingenuity, independence, and connection to place. 100% Idaho-owned small businesses on that acreage would amplify those strengths, creating a distinctive, resilient local economy where profits and decision-making stay in Idaho. In contrast, an opaque, minimally staffed data center could be plopped anywhere with cheap land and power – there’s nothing uniquely “Idaho” it taps into except our utilities (hence the feeling of “Anywhere USA” monotony). As one analysis succinctly put it, small-scale local businesses create more prosperous and connected communities across a wide range of metrics, while the rise of giant absentee firms undermines those outcomesilsr.org 95. Here, the data center is the giant absentee firm – its headquarters a thousand miles away, its purpose unrelated to Idaho’s local economy.

When defending the data center, proponents list generic positives that any project could claim. But when we compare apples-to-apples – tax revenue per acre, jobs per acre, secondary spending per dollar – the data center loses badly against a scenario of fostering local enterprises. The analysis reveals that there are virtually no unique net positives to Idaho from the data center beyond what a generic large construction project provides. And in several respects (jobs, local reinvestment, multiplier), it is actually one of the poorest uses of the land and infrastructure if our goal is broad-based Idaho prosperity.

Idaho can and should do better than settling for “at least it’s something.” The real question going forward is: will Idaho continue to chase these low-return trophy projects, or refocus on cultivating the kind of diversified, locally powered economy that truly benefits Idahoans? The evidence strongly favors the latter. As we’ve shown, once the smoke and mirrors are cleared, the AI data center hype is largely an illusion – the elephant in the room is that Idaho got very little, when it could have had so much more by investing in its own backyard.

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