This Week in Startups
00:56:33 · Lon Harris, Jason Calacanis
[00:56:33] S1: I think the companies think that they can just do the same kinda like what we used to call, like, cause washing or greenwashing, you know, when the companies would be like, they take out a bunch of ads touting their environmental record and you wouldn't necessarily see any of the results, but you'd be like, well, Chevron says they're cleaning up the lake, so I guess I should trust them. I think that's what's happening now. Pull up that pull that up, Jacob. If you live in Texas, you see these ads all over the place for Meta. Like, we're not just building up data centers in El Paso. We're pumping money into El Paso. We're making El Paso a great place to live in. Like, I I I don't live in El Paso. Maybe it's true, but it doesn't seem like... It it feels like this is marketing, and I don't feel like there's a groundswell of people in El Paso, Texas who really feel like, thank God, Meta is here and building these data set is because El Paso is a much better place than it used to be. And I just feel like I don't know if we've crossed that chasm where the the companies are actually spending the money in a way that is felt by everyday people as opposed to building websites where they talk about how they're gonna do that. [00:57:42] S0: I mean, if you're building a data center in one of these towns like El Paso, it's going to have a major impact eventually. It may not have the impact today. The website might be a bit, you know, manipulative. They're running commercials for
00:57:42 · Jason Calacanis, Lon Harris
[00:57:42] S0: I mean, if you're building a data center in one of these towns like El Paso, it's going to have a major impact eventually. It may not have the impact today. The website might be a bit, you know, manipulative. They're running commercials for [00:57:58] S1: this too, where it's like guys in hard hats, and they're like, everybody used to have to move out of El Paso to go get a good job. But now that the data center's here, we all work for Meta, and it'll be like a guy with a bulldozer. And, you know, like, they're they're girly... They're all in on the idea that, like, Meta is gonna save the town of El Paso with this data center. And, like, I haven't talked to a lot of El Pasoans. Maybe they do feel that way, but I'm skeptical. [00:58:21] S0: Okay. So there is do no harm. Like, don't make my electric bill go up. Right. That is table stakes and it's done. Yes. Don't be selfish and take something from the community. That used to be what we did ten years ago in the industry. You would bid one city off another to get tax breaks. And remember Amazon did it, and I was on CNBC talking about it, and they were gonna, like, have their second headquarters somewhere, and they wound up splitting it between two cities. [00:58:46] S1: So it be this, like, long ongoing, like, maybe we'll put it here, and then they would see what the city council would offer them. Right. Exactly.
00:58:46 · Lon Harris, Jason Calacanis
[00:58:46] S1: So it be this, like, long ongoing, like, maybe we'll put it here, and then they would see what the city council would offer them. Right. Exactly. [00:58:53] S0: Right. And that's ended because that felt like... Correctly so, people were like, Well, wait a second, what are we getting out of this? Now, if you said 10,000 jobs, great. Okay. But when you talk about a data center, you're talking about very few jobs after the thing has been finished. Right, [00:59:08] S1: building it, and then once it's there, there's a bunch of savings. The next. [00:59:11] S0: Unless they're gonna continue to build. So we went from we're gonna extract something from the local community to we're not gonna do any harm, we're gonna pay our way for the electricity, to now we're going to subsidize this town, we're going to train people to be electricians and HVAC folks for free, which Meta is doing, so give them a lot of credit for that. We're going to pay for the local stadium, we're going to lower your electrical cost, we're going to lower your water cost. And I think they need to be more explicit of that. When I look at this website, investing in El Paso, 300 operational jobs is nothing. I mean, it's not nothing, it's something I don't know how many people live in El Paso, or how many people are working in El Paso right now, but I don't think it's that much. 4,000 skilled workers on-site at peak construction. Again, they're in and they're out. They're probably causing as much of a ruckus at the local bars as they are contributing. [01:00:02] S1: It's alright.
01:00:02 · Lon Harris, Jason Calacanis
[01:00:02] S1: It's alright. [01:00:03] S0: It's you watch Landman. [01:00:04] S1: 650 to 700 k people in El Paso. So a decent sized town, not that much smaller than Austin, really. [01:00:11] S0: How much bigger? How big is it? [01:00:13] S1: Austin's about a million. This is about 650,000 in El Paso. [01:00:17] S0: Okay. So 6,000 would be 1%. 600 would be 10 basis points, 300 would be 50 bps. So it's some [01:00:28] S1: It's zero, it's not zero. Yeah. [01:00:31] S0: Right. So they need to figure out how much is actually going to the libraries, the roads, etcetera. [01:00:40] S1: That's what [01:00:40] S0: I'm saying. Is not for them. They don't exactly quantify that. I think what they should say is we're going to be giving $100,000,000 over ten years to the community to spend as they see fit. [01:00:55] S1: Right. [01:00:55] S0: So... And and just put the... Where where is the tax number here? Like, how much are they gonna pay in local taxes? They should just say, we're gonna pay a 100,000,000 a year in local taxes, a billion dollars over x number of years. And then people could say, okay. Yeah. And and give it to the community. Because local taxes, they say tens of millions. But [01:01:15] S1: Like, why isn't there... Why aren't they getting, like, the Meta El Paso Arena? You know? Like, it's just, like, do do something visible that everybody in town is like, well, Meta built that. It's great. I love it. We go to the Meta Dog Park every week. You know? Like, I feel like it's
01:01:15 · Lon Harris, Jason Calacanis
[01:01:15] S1: Like, why isn't there... Why aren't they getting, like, the Meta El Paso Arena? You know? Like, it's just, like, do do something visible that everybody in town is like, well, Meta built that. It's great. I love it. We go to the Meta Dog Park every week. You know? Like, I feel like it's [01:01:30] S0: always really do that kind of stuff. I I would argue the other side of that, which is don't do the, like, hand wringing signaling stuff because I feel like that's a little bit performative. I think just giving a certain amount of cash and taxes at a minimum, we're going to do a minimum, instead of it being it says $80,000,000 in taxes, and who knows how to get to it. We're just going to give $25,000,000 a year in taxes as our minimum tax payment for the next ten years. So as long as we're here, we're going pay twenty five minuteimum in taxes. And if you don't have a way to give us that money, we're just going to gift it to you. They know the economic value of this thing. So I think they should just give and pick a number, give it to the city council, and then let the city council have arguments of how to spend it. Because they might say, you know what? The football stadium is the priority. No. We think training is the priority. No. We think this bridge is the priority. [01:02:22] S1: Yeah. [01:02:22] S0: What... Whatever it happens to be. [01:02:23] S1: Teachers to move to El Paso
01:02:23 · Lon Harris, Jason Calacanis
[01:02:23] S1: Teachers to move to El Paso [01:02:25] S0: or something. I... You know, I... One of the things that happens, you know, with these local communities, there is an interesting phenomenon in rich communities. And I've lived in, how many times have I lived in an affluent community? Twice. Brentwood and then Brentwood. Then in The Peninsula. Yeah. Yeah. In The Peninsula. What happens is you have a lot of expensive homes. You get charged a percentage of the home value, and the local schools are run by that district, they become overfunded. And people who are in there who are affluent send their kids to private school. So the people who do send their kids to the local school have, I'm not kidding, a five to 10 to one teacher to kid ratio, is better than the private school ratio. They get overfunded, in other words. That would be what I would do if I was Meta. I would overfund the school system and say, your school system is going to have a five to one kid to teacher ratio because of what we're [01:03:20] S1: doing. That's [01:03:21] S0: That would be... That would resonate with people. [01:03:23] S1: Visible that people can feel that's visceral that's not just a commercial or, like, guys in hard hats, but, like, something that people are like, okay. It's super valuable. I'm glad Meta's here. That's what I