Anticipating data center and technology industry growth, Nebraska is investing in infrastructure that will bring major data centers to the state.
This week Nebraska Gov. Dave Heineman announced Community Development Block Grants (CDBG) totaling more than $2 million in Phase II funding for Aurora, Kearney and South Sioux City, which will enable the cities to move forward with developing speculative “power park” sites. These sites will be equipped to attract data centers, high tech industries and companies with intensive power needs.
The grants represent a continuation of Nebraska’s long-range plans. “Last year, these communities received CDBG funding to begin planning for a power park site,” Heineman said. “Now we are partnering with local organizations to move forward with land acquisition. Nebraska is attractive to high-end power users due to electric rates that are among some of the lowest in the nation.”
During Phase I, Aurora, Kearney and South Sioux City each received up to $50,000 in CDBG funding for initial planning. City and local economic development officials worked with national and local experts in commercial real estate and site selection during the planning process, including Gensler, RTKL, Corgan, CBRE, HP, Syska, Hennessy, Grubb & Ellis, SCORR Marketing, and CBRE/MEGA.
Interest in Mid-West Locations
The booming interest in the region is driven primarily by decisions by three of the largest Internet companies to locate major projects in the region, with Google and Microsoft choosing locations in Iowa while Yahoo has set up shop in Nebraska.
Attention to data centers in the region has also been spurred by studies showing the affordability of the Midwest in housing mission-critical facilities, as illustrated in this chart of data from The Boyd Group on operating costs.
Nebraska Moves Ahead
In addition to state funding, each community will provide one-to-one matching funds for Phase II to develop sites and accompanying infrastructure, which are expected to be available in January 2011 for park tenants.
Each site will offer large quantities of low-cost, reliable power at less than five cents per KWH and the ability to exceed more than 50 MW, along with installed water, sewer and telecommunications infrastructure. When complete, the properties will offer green advantage capabilities in construction and operation, including geothermal and outside air economization for cooling. Also, Nebraska offers sales tax refunds and personal property tax exemptions for data centers through the performance-based Nebraska Advantage incentives.
Phase II funding includes:
- Aurora receives $705,000 in CDBG funding to develop a 151-acre speculative power park adjacent to the city’s south side. The city will enter into a sub-recipient agreement with the Aurora Development Corporation, providing $700,000 for land acquisition. The remaining $5,000 will be available to the city for administrative costs related to the project. Aurora Development Corporation will contribute an additional $800,000 toward the project’s total $1.5 million cost.
- Kearney receives $680,000 in CDBG funding to develop a 116-acre speculative power park northeast of the city with another 200 acres available. The city will use $675,000 to purchase the land, and the remaining $5,000 for administrative costs related to the project. The City of Kearney will then contribute an additional $675,000 match, and has already contributed with Buffalo County for soil testing, water extension and street paving toward the project’s total of more than $2.6 million cost.
- South Sioux City receives $690,500 in CDBG funding to develop an initial 108 acres of an approximate 314-acre speculative power park in the city’s northwest section, near the newly-developed joint Wayne State and Northeast Community College Campus. $685,500 of the CDBG funds will be used for land acquisition, and the remaining $5,000 will be available to the city for administrative costs related to the project. South Sioux City will contribute $749,500 in matching funds resulting from the sale of recovery zone bonds toward the project’s total $1.44 million cost.
All three parks may be leased or purchased by a single business or multiple businesses. Each power park will be required to create at least 22 full-time jobs. More information on available sites is online at www.neded.org/datacenters.