It's been an active time for the data center market in Colorado, with HP announcing a major new facility in Fort Collins, while Fortrust announced plans to expand its facility near Denver. The developers of Vineyard Data Center would like to see that activity extend south to Colorado Springs.
The planned Vineyard Data Center Park is a property that has served as a vineyard, polo pitch and golf course. The project has gained some early attention for its plans for an on-site biomass plant that would generate up to 50 megawatts of power capacity using a fuel mix including biosolids and municipal waste - in other words, a trash-powered data center.
Developer Vince Colarelli believes Colorado Springs, a city of 410,000 located about 60 miles south of Denver, has the potential to be a player in the market for large data center campuses. The area is home to existing data centers for Verizon Wireless, HP, FedEx, T. Rowe Price, Progressive and Intel, among others.
Combination of Scale, Sustainability
Colarelli says the Vineyard project - which can offer recycled "grey water" in addition to renewable energy - offers a combination of scale, sustainabilty and affordability (about 4.5 cents a kwH for electric power through an agreement with Colorado Springs Utilities). The 108-ace site offers space for multiple data centers housing up to 800,000 sqaure feet of data center space.
"Colorado Springs gives us an environment where we are free of man-made and natural disasters," said Colarelli. "The climate is ideal for free cooling for all but 260 hours a year. We have moved forward on the premise that it's an emerging market."
The toughest part of establishing a new data center development is landing the first customer. Colarelli says he has had active interest from users, and hopes to line up a colocation or wholesale provider as the first tenant. If no deals are finalized by this summer, Colarelli said the Vineyard team is prepared to build a first phase to showcase its design, which features data center pods sized at about 3,000 square feet apiece.
The project's prospects have been boosted by the city's March 25 approval as an urban renewal zone, which allows Vineyard to use tax increment financing, which aplies future revenue from taxes on the property to pay for park, road, storm water, sewer and other public improvements. Some council members debated whether a former vineyard and golf course could qualify as "blighted," but the council ultimately approved the application by a 5-3 vote.
The site also qualifies as an enterprise zone, allowing for tax credits on the purchase of capitalized equipment and furnishings for the project.
Competitive Incentive Environment
The ability to use tax increment financing was key to efforts to assemble a financial incentive program that can help Vineyard compete in an environment where many state governments are offering aggressive incentives to attract greenfield data centers.
"I think it's misleading for people to say Colorado is not 'incentive strong,'" said Colarelli, who said the effort has active support from Colorado Gov. John Hickenlooper. "This is truly an occasion where you have a public-private partnership. I meet with utilities every week. We're ready to go. I could put a shovel in the ground tomorrow, and we have entitlements in place.
One potential approach is positioning Vineyard as a site for secure facilities for the defense industry, which has a large presence in Colorado Springs, home to the Air Force Academy and NORAD's Cheyenne Mountain Operations Center.
"We're really confident and convicted in that this is a great emerging market for end-users," said Colarelli. "A year ago the conversation was about secondary market many fights you have a Colorado Springs. Now the conversation is about being shovel ready."