| SAN FRANCISCO
SAN FRANCISCO May 18 It's not just employees of
Facebook Inc and its original investors who are expecting
a big payday from the No. 1 social network's much-anticipated
initial public offering.
Some of Facebook's wealth is also slated to help fill the
cash-strapped coffers of California and the smaller but still
needy ones of Menlo Park, the Silicon Valley city where the
company is located, although not in the form of taxes.
In a voluntary agreement with the city's government,
Facebook will soon pay a lump sum of $1.1 million, a move Mayor
Kirsten Keith hopes will be followed by another $500,000.
The initial outlay to help fund capital projects for the
city will be followed by additional annual payments of $800,000
for five years, $900,000 for the following four years and $1
million in subsequent years.
The payments will help Menlo Park respond to Facebook's
expansion and its traffic. The company currently has 3,500-plus
employees and plans to develop a new campus - and there is an
expectation the growth will lure more business to Menlo Park.
"Whenever you hear Facebook, you'll hear Menlo Park. That's
just priceless," Keith told Reuters in an interview. "Other
companies will want to be around that."
Keith says a future "ecosystem" of high-tech firms could
establish itself in Menlo Park to develop products and services
complementing the social network, providing more revenue to the
Menlo Park faces a budget gap of about $1 million for the
2013 fiscal year beginning on July 1 and money slated to arrive
from Facebook next January will help close the shortfall, said
City Manager Alex McIntyre.
Facebook's payments to Menlo Park will help replace revenue
that was generated on the company's campus when it housed a Sun
Microsystems facility that generated about $800,000 a year in
sales tax revenue for the city.
Earlier this week, California's Legislative Analyst's Office
estimated that California will see $2.1 billion in revenue
linked to Facebook's IPO through its next fiscal year. The
estimate was based on the expectation the company's shares will
rise to $45 a share in six months from the initial public
offering price of $38.