It looks like Virginia’s recent updating of its data center incentives is continuing to pay dividends. This week Capital One Financial said it will invest more than $150 million to build a new data center in Chesterfield County, Virginia. The facility will help the huge credit card provider consolidate IT infrastructure in the wake of its recent acquisitions of ING Direct and HSBC’s US credit card portfolio. Capital One chose Virginia over Texas for the project, which will create at least 50 new jobs.
“In today’s environment, information technology is a competitive advantage,” said Rob Alexander, Chief Information Officer of Capital One. “With the new Chesterfield data center as a key element of the company’s simplified and automated infrastructure, we are proud to continue our strong relationship with Virginia and expand our workforce here.”
Capital One is the country’s sixth largest bank based on deposits. Founded and headquartered in McLean, Virginia, Capital One employs over 14,000 workers in the state.
Virginia Governor Bob McDonnell approved a $500,000 grant from the Governor’s Opportunity Fund to help win the Capital One data center project. The company will also be eligible for a sales tax exemption on eligible data center computer equipment as a result of legislation passed in 2009 by the General Assembly. Through its Virginia Jobs Investment Program, the Virginia Department of Business Assistance will provide funding and services to support the company’s recruitment, training and retraining activities.
Virginia passed its data center incentives in 2009, partly to remain competitive with North Carolina, which has been competing aggressively for major data center projects. The original incentive package had a 2017 sunset date for the expanded sales tax exemptions, which earlier this year was updated to extend the tax benefits to 2020 – a key consideration for companies looking to build or lease data centers with an expected lifespan that will include several server refresh cycles.
The incentives apply to computer equipment and software purchased or leased for the processing, storage, retrieval or communication of data, including but not limited to servers, routers, connections and other hardware, including chillers and backup generators used in a data center. To qualify, the applicant must invest at least $150 million and create at least 50 new jobs – precisely the numbers announced for the Capital One project.
The updated incentives were recently cited as a factor in several large leases for DuPont Fabros Technology (DFT).