Verizon Outlines Plans for Huge NY Data Center

Verizon (VZ) is moving ahead with plans to build a mammoth data center campus in Somerset, N.Y. on the shores of Lake Ontario. The company outlined plans to spend $500 million to build 900,000 square feet of data center space.

Verizon is moving ahead with plans to build a mammoth data center campus in Somerset, N.Y. on the shores of Lake Ontario. The company outlined plans to spend $500 million to build 900,000 square feet of data center space, which it will fill with up to $3.4 billion worth of equipment over the 20-year life of the facility. Combined with land, utilities and other costs, the project represents a total investment of about $4.5 billion, according to the Buffalo News.

Verizon hasn't yet confirmed that it will build in Somerset, saying that it has also looked at properties in other states. But the company offered more details on the project this week as it appeared before Somerset zoning officials and applied for tax breaks from the Niagara County Industrial Development Agency (NCIDA). Verizon sent a dozen officials to the planning meeting, according to the Lockport Union-Sun.

Three Huge Data Center Buildings
Verizon envisions building three two-story data centers on the 17-acre property, each with about 300,000 square feet of space. The land is owned by AES. The telecommunications company is seeking tax incentives in the form of a 20-year payment-in-lieu-of-taxes (PILOT) arrangement, which could add up to savings of $330 million over the life of the agreement. Verizon is also seeking grants from the Empire State Development Corp.

The region offers several advantages to data center operators, including the ability to use fresh-air cooling (free cooling) virtually year round, along with the availability of hydro-electric power from the Niagara River. he Somerset site is approximately 20 miles from Lockport, N.Y., where Yahoo is nearing completion on the first phase of its newest data center, which employs an energy-efficient design known as the Yahoo Computing Coop.

Power Provisioning
A key issue will be the availability of hydro-electric power from the New York Power Authority. The NYPA is providing Yahoo with 15 megawatts of power for its 180,000 square foot data center in Lockport. The scope of Verizon's proposal clearly suggests a larger power requirement. The projected construction cost of $500 million, combined with typical construction cost of about $9 million to $10 million a megawatt for efficient data center builders, suggests that Verizon may need in the neighborhood of 50 megawatts or more of power for the entire project.

However, that capacity could be delivered in phases as the data center is built. The NYPA structured its deal with Yahoo in two stages, with a first phase of 10 megawatts and then an additional 5 megawatts. Verizon's tax submissions to the NCIDA describe a three-phase investment in data center equipment, with phases staged in 2011, 2015 and 1016.

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