Microsoft Lines Up Incentives for $250 Million San Antonio Expansion

An aerial view of the 470,0000 square foot Microsoft data center in San Antonio.

An aerial view of the 470,0000 square foot Microsoft data center in San Antonio.

Microsoft has proposed building a new $250 million data center in San Antonio, and has received approval from local officials for a package of tax breaks to support the expansion.

Local media in San Antonio reported last week that Microsoft recently began construction on the new facility, which would be its second major data center in San Antonio.

The company declined to address the reports. “The San Antonio datacenter is an important part of our portfolio but we have no additional details to share at this time,” said a Microsoft spokesperson.

Microsoft has an existing 470,000 square foot data center in San Antonio, which the company opened in 2008. Last summer, it leased 8 megawatts of wholesale data center space in the San Antonio market, according to industry sources. The new Microsoft facility is expected to be sizeable, given the $250 million investment.

Data Center Cluster Continues to Grow

San Antonio has attracted several enterprise data centers, particularly in the energy sector, as well as multi-tenant providers such as CyrusOne and Stream Data Centers. Both CyrusOne and Stream Data Centers continue to build up their San Antonio footprint.

Microsoft will not comment on the project, but San Antonio City Council meeting minutes from Nov 21, 2013 reveal details of the project. According minutes of a city council meeting, San Antonio International and Economic Development Director Rene Dominguez made a presentation saying Microsoft was proposing a capital investment of  $250 million in San Antonio beginning in 2016.

The proposal requested authorization to execute a 15-year Chapter 380 Tax Reimbursement at a minimum of 40 percent of City property taxes on the real and personal property investment of $250 million. The project will result in the creation of 20 high paying jobs starting in 2016. The jobs will have a minimum annual wage of $53,000.The estimated net fiscal benefit of the project to the city is $56.3 million. The motion passed by an 8 to 1 vote.

As of yet, there are no details about the proposed data center. Will it be a raised floor facility or will it use the IT-PACs that Microsoft has increasingly embraced? At one time there was discussion about installing on-site solar power at Microsoft San Antonio. For now, the minutes reveal that Microsoft plans on continuing to invest in its San Antonio infrastructure, but not much else.

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About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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  1. Texas remains one of the largest destinations for critical facilities in the country. Four of HP's six data centers are located in the state, among others.