State local leaders increasingly target data centers for community development strategies
Texas Insider Report: FORT WORTHTexas Ross Perot Jr. describes data centers as the modern day equivalent of Americas giant factories in the early 20th century. And in the sprawling Dallas-Fort Worth region they seem to be spreading as fast as wildflowers. Texas has become one of the countrys leading destinations for data centers propelled by robust economic growth a business-friendly tax climate abundant sources of water and dependable electricity.
Richardson Tex. whose registered trademark is Telecom Corridor was one of the states first municipalities to actively pursue data centers said John Jacobs executive vice president of the citys chamber of commerce.
Each one of these data centers is a little gold mine cranking out wealth for the city" he said.
As long as people are tethered to computers the Internet and smartphones there will be an insatiable need for data centers.
The data center market across North America had tremendous growth" in 2015 according to a report by JLL a global real estate services firm. Multi-tenant data centers in the United States earned $115.3 billion in revenue last year a 6.1 increase from 2014.
The boom seems to be playing out under the radar of the public in part because data centers prefer to keep a low profile largely for security reasons. Average citizens are most likely unaware that the large windowless buildings they pass on their morning commutes might be data centers housing equipment to facilitate their computer-reliant lives.
At AllianceTexas Mr. Perots 18000-acre multi-use project in northern Fort Worth Facebook is building what it says will be a premier data center with an investment expected to reach $1 billion. About 50 miles east the Dallas suburb of Richardson is home to 20 data centers and expects at least four more over the next 18 to 24 months. In neighboring Garland RagingWire Data Centers based in Sacramento is in the first phase of construction on a planned million-square-foot complex.
Dallas-Fort Worth the nations fourth-most-populous metropolitan region ranks among the nations top five data center locations. In square footage for multi-tenant data centers Dallas ranks fourth with 2.8 million square feet according to 451 Research a firm based in New York that analyzes information technology trends.
Suburban Northern Virginia near Washington is widely considered the nations top data center market and others high on the list include the greater New York-New Jersey region and the Silicon Valley-San Francisco area.
So far impervious to the boom-bust cycles in residential real estate data centers have been a reliable bright spot and analysts call for continued expansion in the foreseeable future both in the United States and even in developing markets like Latin America.
In the grand scheme of real estate data centers are still a huge business" said Todd Bateman of the CBRE Group a commercial real
estate services company.
The general public today probably doesnt realize how they tap and touch and utilize the data center all throughout their day" said Bo Bond a leader of JLLs data center solutions team.
State and local leaders across the country have increasingly made data centers a target of their community development strategies often by offering tax incentives and other inducements. While data centers with relatively small staffs are not a big source of jobs they contain millions of dollars of components that provide a lucrative source of tax revenue even with abatements.
Large enterprises like Facebook often maintain their own centers but many companies are shedding that costly and complex function to concentrate on their core business giving rise to a continuing increase in multi-tenant centers that offer security and expertise to a range of clients.
Across the 13 counties in the Dallas-Fort Worth region the governors office says there are at least 200 enterprise and multi-tenant data centers.
The city of Richardsons largest is Digital Realty which sits on a 69-acre campus that was once occupied by Collins Radio a military contractor in the early days of aerospace. Fortified by an eight-foot spiked fence Digital Dallas as it is known locally is a corporate flagship with eight buildings. Four serve multiple tenants; the others each serve large single tenants. The still-growing complex will ultimately encompass 10 or 11 buildings and total more than 1.1 million square feet said Bryan Marsh III a vice president and portfolio manager for Digital Realty.
In Plano one of the areas growing data center markets Aligned Data Centers a division of Aligned Energy has opened a center that offers a pay-as-you-go" program in power usage. It enables clients to sharply curtail power costs by paying only for power they use instead of locking into costly arrangements upfront said Aligned Energys chief executive Jakob Carnemark.
While much of the data center development in North Texas has been clustered in the Dallas corridor government and business leaders on the western side of the metropolex region have been waging an aggressive effort to lure more data centers toward Fort Worth and its surrounding communities.
At AllianceTexas data centers have added another dimension to the development that Mr. Perot the son of the computer magnate H. Ross Perot started assembling more than 30 years ago in wheat fields and ranch land about 15 miles from downtown Fort Worth. Alliance encompasses an airport houses more than 425 companies and has a bustling town center and upscale homes. Facebooks will be its fifth and by far largest data center.
Now under construction the Facebook center will consist of three 250000-square-foot buildings. Work on the first facility is expected to be complete in June. Facebooks chief executive
Mark Zuckerberg said in a Facebook post that the complex would be one of the most advanced and energy-efficient data centers in the world."
Fort Worth leaders landed the Facebook deal after a 220-city competition that stretched for more than a year. Fort Worth and Tarrant County provided a total of $146.7 million in tax abatements for up to 20 years. During that time the city county and an area school district will receive a total of $228.5 million in additional property taxes the Fort Worth Chamber of Commerce said.
To appeal to Facebook local officials promoted the availability of wind energy a strong labor pool in technology and access to airports. And in addition to tax incentives they pointed out a Texas law that spares larger data centers from sales taxes on equipment.
Fort Worths mayor Betsy Price who was heavily involved in the Facebook talks said city leaders across the region were scrambling to lure more data centers because they offer well-paying jobs attract other high-tech enterprises and do not require a large investment on infrastructure.
We love those guys" Price said.
