Deal Combines San Diego Data Center Firms

American Internet Services (AIS) announced today that it has acquired Complex Drive in a deal that combines two leading data center providers in the San Diego, Calif. market. AIS has three facilities with 105,000 square feet of data center space in the San Diego area, while Complex Drive has two facilities with 20,000 square feet of space. AIS was recently acquired by Seaport Capital, which has also been a major investor in Switch and Data (SDXC) and Peak 10.

Complex Drive will become a “seamless part” of the AIS operation with no changes made to either company’s existing staff or management team, said Alessandra Carrasco, CEO of AIS.

Nationwide Data Center Planned for Ohio

Nationwide Mutual Insurance Co. is making plans to build a $96 million data center in New Albany, Ohio, according to local media reports. The insurance company is planning a data center facility of at least 120,000 square feet on 45 acres recently designated as New Albany’s Research and Information District. Construction is scheduled to begin in January 2010 and wrap up by December 2011, according to city officials.

Perhaps the most interesting facet of the announcement has been the tangible benefits for the local community. Economic development agencies in many areas have been seeking to attract data center projects, which typically involve massive investment but few full-time jobs, which traditionally have been the key benchmark for new projects.

Flurry of New Data Center Projects

There’s been a flurry of announcements in the past week about new data center projects and expansions in ”second-tier” markets around the country. As we’ve noted before, the demand for data center space extends well beyond the core Internet connectivity hubs. Here’s a roundup:  

• DataChambers is expanding its data center space inside its hardened underground facility in Winston-Salem, North Carolina, the company said this week. DataChambers will expand its footprint within its Salem Business Park facility, which is 18 feet underground and previously used as a design and fabrication site for nuclear missile guidance systems. This is the second major expansion initiative for DataChambers this year. In March the company opened an 85,000-square-foot facility at Ridge Creek Business Park in Charlotte.
• Reynolds and Reynolds will build a $23.8 million data center on its Kettering, Ohio campus with the help of a property tax abatement officials say helped prevent the company from building the facility in Texas. The company will save $430,000 in property taxes over the five-year life of the 25 percent property tax abatement, city officials said.

Iowa Wants Even More Data Centers

Google and Microsoft have decided to invest more than $1 billion in building giant data center campuses in Iowa. Apparently that’s not enough for Iowa officials, who are continuing to pursue more huge “server farms,” according to the Des Moines Register. The question is this: after you’ve landed Microsoft and Google, how many more data center projects do you need?

The same factors that make Iowa attractive to the technology industry’s largest companies also make it ideal for single-tenant enterprise data centers, according to John Boyd of The Boyd Group, who has done several major studies of the cost of operating data centers in different regional markets around the United States. Iowa has fared extremely well in Boyd’s surveys, with Council Bluffs, Ames and Des Moines all ranking among the lowest-cost locations, with annual operating costs of between $12 million and $12.4 million.

Data centers are highly-automated operations that typically don’t come with a large number of jobs attached. Google says its $600 million Council Bluffs data center will create 200 jobs. Some industry observers have questioned this number, noting that competitors like Microsoft and Yahoo operate their facilities with between 30 and 50 employees. Microsoft recently indicated it will build a major data center in Iowa as well.

DBSi Plans Data Center in Wall Street West

Disaster recovery specialist Data Based Systems International, Inc. (DBSi) is building a 228,600 square foot data center in Pennsylvania’s Lehigh Valley as part of the state’s Wall Street West initiative, the company said Friday. DBSi has begun work on its Advanced Technology Center (ATC) on the TEK Park campus in Breinigsville, Pa. and hopes to complete the facility late this year.

TEK Park is a seven-building complex that was originally developed by AT&T Bell Labs as a research center. The MRA Group bought the property from TriQuint Semiconductor in 2005 for $9.3 million. TriQuint inherited the property in 2003 when it bought a division of Agere Systems, a Bell Labs spinoff.

“The addition of TEK Park further enables DBSi to provide the greater New York, New Jersey, Philadelphia, and Central Pennsylvania corporate markets with secure hosting and disaster recovery services outside of the metro threat zones,” said William Bachenberg, CEO of DBSi. “The existing power infrastructure at TEK Park will allow the facility to support very high density deployments of blade servers and other technologies.

Castle Access Plans San Diego Colo Facility

San Diego colocation provider Castle Access is building a new 88,000 square foot data center to meet growing demand from its enterprise clients, the company said this week. The facility will be located in Rancho Bernardo, Calif., and the company plans to bring the first 10,000 square feet of colocation space online by November 1.

The facility will be carrier-neutral and will offer multiple Tier 1 fiber carriers. Castle Access says the new data center will be supported by two 2-megawatt high power Caterpillar backup generators, two 5,000-gallon double-lined fuel tanks, dry-pipe pre-action fire suppression, a VESDA fire detection system, dual 12 kV power feeds and 880 tons of cooling capacity.

Relief in Sight for Sinking Tennessee Data Center

Last July we noted reports that the state of Tennessee’s primary data center is slowly sinking, prompting the state to invest $68 million to build two new data centers in Nashville and Smyrna, which were scheduled to be ready in 2010. It looks like that schedule has been moved up, as ComputerWorld reports that the state has accelerated construction on the first new data center in Smyrna and may begin transferring critical applications and data out of the sinking Nashville facility as soon as the first quarter of 2009.

ComputerWorld notes that the state of Tennessee’s facility is “located in the worse spot in America for a data center - on an unstable landfill, next to a railroad and a river and downstream from a large dam that the U.S. Army Corps of Engineers says has a risk of failing.” The center requires constant monitoring, and some areas are too unstable for storing heavy computer equipment. “The back end of it, it sinks into the old landfill, and we have to prop it up, apparently on a fairly routine basis, so it’s not secure,” state Finance Commissioner Dave Goetz said last year. Goetz noted at the time that “if the Wolf River Dam breaks (the data center) will be under about 12 feet of water, which is hard on computers.”

Testing the Math on Data Center Incentives

What’s a data center worth to the local economy? How about a data center engineer?

As state and local economic development agencies step up their efforts to attract major data center projects with incentive packages, they should expect scrutiny from constituents. That’s certainly the case in North Carolina, where an incentive package for Google’s $600 million data center in Lenoir became a political hot potato last year. Now local officials in Research Triangle area have agreed to offer IBM $750,000 in economic development incentives if Big Blue decides to build a new data center in Research Triangle Park. An excerpt from the Right Angles blog:

The commissioners unanimously committed $750,000 over a seven-year period if IBM builds the facility here. The company is also considering locations in New York and Colorado. … The facility will be somewhat unusual in that it would only create 10 jobs but is expected to bring at least 1,000 executives a year here to visit the center. Over five years, the data center would generate $4.4 million in visitor spending, which in turn would translate into $150,000 in local tax money, Shelley Green of the DCVB said.

As we’ve noted, data centers are odd birds by economic development standards because they typically are so automated that they create very few new jobs - which has long been the standard by which incentives are developed and judged. The growth of data center incentives programs suggests that economic development officials no longer debate this point very much. But taxpayers are likely to continue to keep score.

Data Cave Plans Indiana Data Center

An Indiana company has announced plans to build an 80,000 square foot data center near Columbus, Indiana, with the state providing more than $300,000 in incentives to get the project off the ground. The data center will be built and operated by Data Cave Inc., a new company spun off from Analytical Engineering, Inc. (AEI)

Data Cave said the two-story facility adjacent to AEI’s headquarters in Columbus is expected to cost about $7 million to build, and will create 25 new jobs. The company said it will begin construction of the new data center in July and will begin hiring IT staff later this year.

“Creating an environment that attracts new job-creating investment from Hoosier companies and from businesses around the world is essential to Indiana’s economic success,” said Indiana Governor Mitch Daniels. “Analytical Engineering’s decision to start Data Cave and invest in Indiana is an indication that the environment we have created is working.”

Jones Lang LaSalle to Acquire Staubach Co.

In a combination of two real estate firms with expertise in the data center sector, Jones Lang LaSalle (JLL) has agreed to buy Staubach Co. in a deal valued at $725 million. A possible combination between the two companies has been widely rumored in recent weeks.

Staubach Co. was founded in 1977 by Dallas Cowboys quarterback Roger Staubach, who will join the JLL board of directors and will be “actively involved” in the combined firm, serving in the new role of executive chairman for the Americas. Staubach specializes in representing tenants of office, industrial and retail space. The transaction does not include Staubach Retail Services or Cypress Equities, Staubach’s investment-development business, which will both continue operations under license agreements.