The CheckFree project was announced by Zydeco Development, which is seeking to develop much of the remaining space at its huge MetCenter business park as a data center campus. Zydeco said Tuesday that it was launching the second phase of development at MetCenter, and has broken ground on a 150,000 square foot industrial building to kick off the expansion.

In early 2006 Zydeco announced plans for a large data center park within MetCenter. The 550 acre MetCenter campus includes 2 million square feet of developed commercial space. Companies with existing data centers at MetCenter include Digital Realty Trust (DLR), DataFoundry, Waste Management and Progressive Insurance.

“By beginning construction on Building Five on a speculative basis and eliminating the uncertainty associated with the build-to-suit option, we deliver the speed-to-market like no other in Austin,” said Howard Yancey, a principal at Zydeco. “The high quality level of the park and its buildings, as well as the many amenities offered, makes MetCenter the premium option for companies looking to locate or relate in Austin.”

MetCenter has sturdy electrical infrastructure, featuring two 400 megawatt power substations. The Electric Reliability Council of Texas (ERCOT), which oversees the power grid for the state of Texas, has its corporate headquarters and data center at MetCenter. Zydeco has obtained site plan approvals for more than 1.6 million square feet of additional space in the new phase. The expansion property was purchased last year.

The growth has established a number of Texas cities as destinations for data center site location, which in some cases are now battling one another for new projects. Here’s a look at the Texas data center map and recent developments for Austin, San Antonio, Dallas, Houston and El Paso.

DALLAS
The early growth of the Telecom Corridor in Richardson helped put the Dallas market on the map for data center development. Around the same time, the Infomart was evolving into a major carrier hotel. The city has also benefited from the growth of a vibrant crop of web hosting companies, including The Planet, C I Host, DataSide (Collocation Solutions), SoftLayer, Layered Technologies and Colo4Dallas.

While Dallas is the most mature of the state’s data center markets, it continues to attract new projects, including a planned 1 million square foot data center campus in Richardson by Skyrise Properties, which also recently bought a Ft. Worth data center from Hillwood Development Company. Behringer Harvard recently bought a facility in Arlington.

AUSTIN
The capital city snared one of the largest enterprise data center projects when Citigroup chose Austin for a $450 million facility in Georgetown. It is the latest in a series of corporate stand-alone data center projects the region has attracted. Hewlett-Packard is building two major facilities in Austin, while Lowe’s has a $126 million data center in the works. That’s in addition to Zydeco Development’s proposed data center park and plans by Digital Realty Trust to expand its Austin facility.

SAN ANTONIO
Microsoft’s decision to build a $550 million data center in the Westover Hills area has been followed by announcements of data center projects by the NSA, Stream Realty and Christus Health. The San Antonio Economic Development Foundation said it is working with five other companies looking at San Antonio for new data center sites, including some speculative projects. One new project is driven by the growth of a local success story: Rackspace Managed Hosting will invest $100 million to convert a vacant San Antonio shopping mall into its headquarters, and plans to add 4,000 new employees over the next five years.

HOUSTON
Houston means Big Oil, and many local IT providers have sprung up to support the industry’s needs. But Houston was also home to one of the dedicated hosting industry’s juggernauts. EV1Servers (Rackshack) was founded as a spinoff of local ISP Everyone’s Internet, and the popularity of its $99 servers made it one of the biggest hosting companies in the world by 2003. The market for new data centers in Houston has been relatively quiet since EV1Servers was acquired by The Planet/GI Partners in May 2006. But things heated up in July, when two managed hosting providers based in Houston were bought in separate deals. Vericenter was acquired by Sungard, one of the largest players in the disaster recovery business, while managed hosting specialist Cyrus One was bought by ABRY Partners, a private equity firm that invests in communications industry.

EL PASO
With these other Texas cities all attracting data center projects, El Paso wants to get in on the act. The El Paso Regional Economic Development Corp. (REDCo) has begun promoting El Paso as a destination for data center developments, hoping to attract investment and high-tech jobs. REDco president Bob Cook said his group launched an initiative in January to make industrial recruiters aware of El Paso’s attributes for data centers. Since then, Cook says REDCo has received calls from two consultants and a company searching for data center sites, he said.

“Austin is well-known for its strong pool of well-educated, talented professionals with the right level of expertise in technology and ecommerce,” said PayPal vice president of core technologies, Matthew Mengerink. “The area’s reputation as a great place to live and work makes it an ideal location for our center.”

Citigroup is advertising for an operations and facility manager and a delivery team manager for the Georgetown site. The company has posted the jobs at Diversity Inc. and LatPro, a job board for Hispanic and bilingual professionals, as well as the Citigroup web site.

The Citigroup project reinforces the status of the Austin region as one of the strongest markets for new enterprise data centers. Hewlett-Packard is building two major facilities in Austin, while Lowe’s has a $126 million data center in the works. That’s in addition to Zydeco Development’s proposed data center park and plans by Digital Realty Trust to expand its Austin facility.

Of greater interest: the price tag on the project has now risen to $980 million, up nearly $400 million from the original estimates from June. The size of the project – 470,000 square feet – hasn’t changed, either. What’s up with the cost estimate? One possibility is that the original cost estimate of $600 million was incomplete. Another possibility is that the cost is rising along with projected power and cooling costs. At least one other company developing new data centers has experienced this.

In June Equinix said that it would invest $165 million in the first phase of a new Chicago area data center. In September, just three months later, Equinix announced that it was upgrading its plan to provide “over twice the power and cooling specifications of its original design.”

As we noted at the time, that suggests Equinix is seeing its clients’ heat and power loads continue to rise – or at least that those clients are seeking enhanced specs on the new sites to have headroom on a “just in case” basis. Microsoft is different, as we gather the Texas data center will be for its own use in the platform for its Live family of SaaS services.

Whatever the details, local officials are optimistic. “It appears everything is moving right,” Bexar County Judge Nelson Wolff told the San Antonio Express-news. “We hope to have something to announce after the first of the year.”

Here’s a summary of data center projects either proposed or finalized in 2006:

• Hewlett-Packard is building two large facilities in Austin as part of its huge data center consolidation project.consolidation.
• Zydeco Development announced plans for a 350 acre data center park in Austin.
• Digital Realty Trust bought two properties at Met Center Business Park in Austin, near Austin-Bergstrom International Airport. One is a fully-leased 45,000 square feet data center, and the other is a 75,000 SF empty facility slated for redevelopment.
• Microsoft began scouting sites in both Austin and San Antonio for a $600 million mega-data center.
• Citicorp is looking at sites in the Austin area for a $475 million data center project.

The exact site of the new state data center is not being disclosed, but data center will include tightly guarded space where 17 mainframe computers operated by the agencies will be consolidated into six and where about 1,200 servers will replace about 5,500 that are now spread statewide.

Citigroup is considering a site in Georgetown in the northern suburbs of Austin, and working with local officials on potential incentives. The Georgetown City Council is said to be preparing a package that would include property tax abatements for 10 years. “We feel good about it, but until that package is completely done, it’s not a done deal,” Georgetown Economic Development Director Mark Thomas told KXAN-TV.

Citigroup has looked at several sites nationwide, including at least one other site in the Austin area at Round Rock. No proposals have been taken to the Round Rock council.

The Austin market is benefitting from a combination of affordable energy, quality work force and an established technology community that includes Dell, AMD, the SEMATECH chip research consortium and IBM’s Pervasive Advanced Technology Laboratory. Energy costs are a huge factor in data center construction, as shown by the recent boom in central Washington, where cheap hydro-electric power has attracted new data center projects from Microsoft, Yahoo and Sabey Corp. While not quite as cheap as in San Antonio, electric power in Austin is more affordable than in many tech hubs with airports for easy access. Austin is also a leader in clean energy technologies, with active support from local utilities.

The story says that “New Orleans approached Austin officials about four weeks ago to discuss the plan.” That seems an awfully late start, but New Orleans officals had considered other locations or even building their own center before reaching the deal with Austin, according to the Austin American Statesman. The city considered and rejected Houston; Atlanta; Jackson, Miss.; and Baton Rouge and Lafayette, La. as backup locations, Meffert said.

The relationship helps New Orleans, which will pay a fee of $5,000 to the city of Austin. But it also has benefits for remergency planners in Austin, according to CIO Collins, who said his team can learn from New Orleans what is essential for a city to function in crisis. “It’s a win-win for us,” Collins told the paper. “We don’t have to reinvent the wheel. It is critical for governments to establish these relationships before a disaster occurs. Having the data here will help us to help them. Knowing what is valuable to them will help us better learn what is valuable to us if, God forbid, we need to use it.”

“People close to San Antonio’s talks with Microsoft said its site-selection staff likes the area’s inexpensive electrical power, work force and lack of exposure to natural disasters,” the paper reported. Real estate firm Jones Lang LaSalle is said to be working on Microsoft’s behalf and looking in the Westover Hills area of San Antonio.

Microsoft has asked the city and Bexar County for 10-year tax abatements for the planned 470,000-square-foot center, according to the two people familiar with negotiations. Austin is becoming a hot market for data centers, as it recently was selected as the site for two large Hewlett-Packard data centers.

Microsoft broke ground last week on a 75-acre data storage facility in Quincy, Washington. The software giant is scaling up its data center infrastructure as it moved to a “software as a service” model focused around delivering consumer and business services through web portals like Office Live.

Demand for data center space is growing along with the Internet economy. As television and movie content moves to a digital delivery model, an enormous volume of digital files will need to be stored in data centers to provide “always on” high-speed access. Meanwhile, Microsoft, Google and Yahoo are planning huge infrastructure expansions to deliver online services and applications.

Doigital Realty’s redevelopment projects will create more than 330,000 square feet of advanced data center space, with approximately 40 megawatts (MW) of available UPS load. Sites selected for development include Digital Realty Trust facilities in Northern New Jersey, Boston, Philadelphia, Charlotte, Atlanta, Chicago, Austin, Dallas, Los Angeles and San Francisco.

“Demand for high-quality datacenter space has been strong in each of these ten cities, which makes the timing of these redevelopment projects ideal,” said Chris Crosby, Senior Vice President of Sales and Technical Services at Digital Realty Trust. “Each of these datacenter spaces will offer the world-class technical capabilities that Digital Realty Trust facilities are known for, including outstanding electrical power availability – an increasingly rare commodity in the technology real estate market.”

Here’s an overview of the 10 projects announced today:

• Northern New Jersey: A marquee redevelopment effort, the 283,000 square foot 3 Corporate Place facility in Piscataway is a fully entitled and master planned data center designed for twelve (12) pods of 12,000 raised-floor square feet with 1,100 KW of 2N UPS load per pod. Each pod has the ability to be a standalone data center or part of a shared infrastructure system. The initial pod has a target completion date of Q4 2006. Additionally, Digital Realty Trust will provide clients with customization options for combining pods into full floor data centers, full 2N redundancy for mechanical electrical plant and self-managed environments.
• Boston: At the 115 Second Avenue data center facility in Waltham along Boston’s Route 128 “Technology Corridor,” a total of 38,500 raised-floor square feet of space is being developed in three pods, with approximately 1,100 KW of available N+1 UPS load in each pod. Two of the pods have target completion dates in Q3/Q4 2006 and one pod has a target completion date of Q1 2007.
• Philadelphia: At the 833 Chestnut Street facility in Philadelphia’s Central Business District, 12,000 raised-floor square feet of space is being created, with 1,100 KW of available 2N UPS load. The project has a target completion date of Q4 2006.
• Charlotte: At the 125 N. Myers Street Internet Gateway facility in downtown Charlotte, 7,000 raised-floor square feet of space is being developed, with 900 KW of available 2N UPS load. The project has a target completion date of Q3/Q4 2006.
• Atlanta: At the 375 Riverside Parkway data center facility in suburban Atlanta, 12,000 raised-floor square feet of space is being created, with 1,100 KW of available 2N UPS load. The project has a target completion date of Q4 2006.
• Chicago: At the 350 East Cermak Road Internet Gateway facility in Chicago’s Central Business District, 6,500 raised-floor square feet of space is being developed, with 900 KW of available 2N UPS load and a target completion date of Q4 2006.
• Austin: At the 7500 Metro Center Drive data center facility in Austin’s Met Center Business Park, Digital Realty Trust is implementing a master redevelopment plan for a high-density data center that will provide more than 10 MW of N+1 UPS load across 50,000 raised-floor square feet of space.
• Dallas: Digital Realty Trust is redeveloping space at two of its facilities in the Dallas area. At the 2323 Bryan Street Internet Gateway facility in downtown Dallas, a total of 10,000 raised-floor square feet is being created with 1,000 KW of available 2N UPS load and a target completion date in 2007. At the 4025 Midway Road data center facility in suburban Dallas, 26,000 raised-floor square feet of turn-key Datacenter space will be developed, with 2,700 KW of available 2N UPS load and a target completion date of Q4 2006.
• Los Angeles: At the 600 West 7th Street Internet Gateway facility in Downtown Los Angeles, 8,700 raised-floor square feet space will be created, with 810 KW of available of available 2N UPS load and a target completion date of Q4 2006.
• San Francisco: At the 200 Paul Avenue Internet Gateway facility in south San Francisco, a total of 14,600 raised-floor square feet of space is being developed in two pods. The first pod has 480 KW of available 2N UPS load with a completion date of Q2 2006. The second space has 1,300 KW of available 2N UPS load with a completion date of Q4 2006.

This continues a trend in which landlords of carrier hotels and data centers have begun developing unused space and marketing it directly to end users, and takes advantage of Digital Realty’s expertise in developing and managing data center space. Digital Realty is also seeking to gain a competitive advantage, offering itself as a long-term landlord in a market that is attracting many new investors and developers.

In its announcement, Digital Realty emphasized its long-term commitment to the data center market, apparently seeking to reassure customers concerned about landlord stability. As the technology real estate market has rebounded, the value of data centers has increased, attracting new investors and developers. Digital Realty suggests that this could provide them with an advantage.

“Digital Realty Trust is the only owner that specializes in datacenter facilities on a national and international basis and that has true expertise in building and operating advanced turn-key datacenter facilities,” said Michael F. Foust, Chief Executive Officer of Digital Realty Trust. “We have a long-term commitment to the technology real estate market, and that aligns our own interests with those of our clients. Our commitment guarantees stability and consistency of service that is in stark contrast to what many customers experience when they work with developers and investors with short-term divestiture goals. We are committed to being long-term partners with our tenants.”

“Control is particularly important for most clients, and our approach is fundamentally different from what one would find in a colocation environment where companies often cannot be in command of their data center,” noted Crosby. “Digital Realty Trust gives tenants a tremendous amount of control over their environment: They can have control over security levels, the kind of equipment they install, facility management, and many other issues. We are here to support the technical and business needs of our clients, and our unique approach to working with tenants is a reflection of that commitment.”