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Keys to Attracting Data Centers to Your Community (2011)

Tim Comerford, Senior Vice President, Strategic Consulting Biggins Lacy Shapiro & Company

LEARN MORE Visit our Knowledge Center READ RELATED BLS ARTICLES & REPORTS
Keys to Locating the Right Community for your Data Center Project , by Tim Comerford, Area Development (2011) Principles of Data Center Siting, By Andy Shapiro, Trade & Industry Dev. Data Center Incentives Overview, by Tim Comerford, UEDA Forum Location Strategies: Corporate Sustainability's New Sweet Spot , Jay Biggins & Tim Comerford Interviewed, Leader

Mission critical facilities more specifically data center operations will continue to be strong economic drivers around the country; with expectations for data center construction to double in just five years, far exceeding levels prior to the financial crisis. So what is fueling this trend? Consumers, technological advances and changes in the way organizations conduct their business may all be driving this need. And communities may provide the environment where data centers can thrive. And while communities and economic developers may have once been slow to respond to this rising need, they are quickly catching up.
THE VALUE OF A DATA CENTER TO A COMMUNITY

Data center projects provide communities with fiscal benefits and opportunities for economic diversification: CAPITAL INVESTMENT: While its true that a data center may not yield a significant number of new full time jobs, these projects are capital intensive, infusing millions of dollars into the local community and creating potentially hundreds of construction positions. They also create ripple effects, drawing in ancillary businesses and vendors that support and maintain data center facilities. REVENUE GENERATORS: A recent 150,000 sq ft data center project in the Northeast generated $100 million in capital investment and created 25 high paying permanent jobs as well as 5000+ construction jobs. In assessing the larger economic benefit, this project resulted in $3.4 million in income tax, $4.1 million in sales tax and over $11 million in utility tax. In addition, the facility is expected to purchase millions of dollars of equipment and services annually, generating over $30 million in sales tax revenue over the 20 year life of the project. NEW INDUSTRY: Data centers can represent more than just jobs or capital investment, they can also mark a tangible sign that the community is broadening its industry base, transitioning into a new digital economy, and illustrating credibility and viability of the communitys economic conditions.
KEYS TO ATTRACTIVE DATA CENTERS

If you want to attract your fair share of this growing sector, it starts with a clear understanding of the core data center needs and then evaluate them against your communitys ability to meet these needs. Critical success factors include: THE RIGHT INFRASTRUCTURE NECESSARY TO SUPPORT DATA CENTER PROJECTS: This includes the availability of a reliable electric distribution system, significant and cost-effective energy supply, followed closely by multiple communication service provides that can offer reliable conductivity and latency through their fiber network. www.BLSstrategies.com/energy page 1

Keys to Attracting Data Center Project (2011) (CONTD)

THE RIGHT ENVIRONMENT: One of the most significant criteria for a data center is resiliency and security. Data center projects minimize risk by avoiding regions prone to natural disasters such as flooding, hurricanes and earthquakes and hazardous locations near airport approaches, oil & natural gas pipelines and in some cases freight rail lines. THE TARGETED INCENTIVES: Many communities understand that companies make a significant investment when building a data center. Targeted economic development incentives that reward companies for capital expenditures (if not large employment gains) such as sales tax exemptions, energy rebates, and property tax abatements that help to defray costs provide companies with a greater ROI and shorten the payback period.
EMPHASIZE PROCESS

Identify data center needs, conduct a clear-eyed assessment of your community and its ability to respond to these type of projects, take actions to augment your infrastructure where necessary and learn how to position your market for maximum benefit.

ABOUT BIGGINS LACY SHAPIRO & COMPANY

For more than 25 years, Biggins Lacy Shapiro & Company has provided professional expertise and creativity in the field of Location Economics: the mix of specialized disciplines that enables companies and communities to plan and execute successful location strategies. We create value on both the demand and supply side of the market for corporate location decisions.

ABOUT TIM COMERFORD | SENIOR VICE PRESIDENT, STRATEGIC SERVICES, BIGGINS LACY SHAPIRO
Tim leads a specially-designed interdisciplinary division focused on assisting companies, developers, municipalities and real estate advisors with issues that pertain to energy procurement, renewable installation, infrastructure assessments utility relocation, with a special focus on mission critical facilities.

LEARN MORE | VISIT WWW.BLSSTRATEGIES.COM/ENERGY

JAY BIGGINS | Executive Managing Director JOE LACY | Managing Director ANDY SHAPIRO | Managing Director TIM COMERFORD | Senior Vice President

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