Citigroup Eyes Austin for Huge Texas Data Center

Citigroup is scouting several sites in the Austin, Texas area for a $475 million data center.

Citigroup is scouting several sites in the Austin, Texas area for a $475 million data center, according to local media. The huge bank's interest reinforces the status of the Austin market as one of the hottest areas for new enterprise data centers. Hewlett-Packard has committed to build two major facilities in Austin, which is also on the short list for a huge Microsoft data center project. That's in addition to Zydeco Development's proposed data center park and plans by Digital Realty Trust to expand its Austin facility.

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.