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by Chris Curtis and Dan Bowman
Speed of delivery has always been a bullet point on most data center providers’ corporate presentations, with each promising “delivery of your new data center space” in “months not years.” While it’s obvious that everyone wants their data center sooner rather than later, it is important to note that the speed of construction is wholly contingent upon the completion of all of activities surrounding the acquisition of the site and its corresponding development. In other words, the delivery clock can only start ticking once the site is ready for groundbreaking. Therefore, the true schedule for the construction of your new data site isn’t simply the duration required to build it, but must also include the time required for its site acquisition and development.
This fact is increasingly significant when you consider the rapacious need for new space and facilities within the service and cloud provider communities. The emergence of these increasingly aggressive timeframes underlies the need for a close relationship between the provider and economic development arm of a prospective data center community. To illustrate the importance of these “symbiotic” relationships, let’s examine the interactions between Compass Datacenters and the Allen Economic Development Corporation in support of an aggressive customer development and construction schedule.
BACKGROUND
Tierpoint, a leading colocation and cloud services provider, was seeking a new Dallas facility with a March 31, 2017 turnover date and initially approached Compass about the project in August, 2016 (only seven months in advance of their desired occupancy date). Tierpoint envisioned a multi-phase project that will ultimately reach 90,000 square feet (sf). The initial phase of the project will deliver 1.2MW of power and a 16,000 sf raised floor data hall within a 30,000 sf building.
The Dallas-area data center real-estate market is highly competitive. Presently, it is home to 2.5 million sf of commissioned data center space representing over 278 MW of power, with another estimated 200 MW in the development pipeline. Tierpoint had looked at multiple locations within the Dallas forth worth area. At the same time, Compass, in preparing its proposal to Tierpoint, re-opened discussions with the Allen Economic Development Corporation (AECD) regarding a plot of land they had discussed for an earlier potential project.
SELECTING THE SITE
The city of Allen is a northern Dallas suburb with a population of approximately 100,000 that has made becoming an aggressive competitor for new data center business part of its strategic growth plan. in concert with the focused efforts of the AEDC, the city has put together a package of incentives that are highly competitive in and of themselves and, in this case, dramatically compressed the site acquisition and development process for Compass and Tierpoint. The AEDC package included:
Since Compass and the AEDC had previously discussed the site, both parties were intimately familiar with key elements such as the location of utilities like water and power and the proximity to major sources of fiber, but the timeframe for the project reduced the normal “acquisition window” substantially. It is in situations like this that the value of a “can do” municipal partner becomes critically important. Based on the assurances provided by the AEDC, Compass signed the lease agreement with Tierpoint before officially purchasing the site.
NAVIGATING THE PROCESS
Compressing the Development Timeline
Since, there is rarely a site that comes specifically zoned as “Data Center ready,” the need for activities such as re-zoning, re-platting and obtaining the necessary permits and utilities easements are standard requirements that must be satisfied before the first bit of earth can be turned. Typically, overcoming each of these hurdles can take an average of 12-18 months in total to complete. what this means is that even though your provider can build your facility in 6-8 months, the total time that elapses before you are handed the keys is more like 1-2 years.
In acting like a true project partner, the AEDC was instrumental in enabling key elements of the approvals processes to be performed in parallel rather than as part of their normal sequential process. This “development” was further augmented by the city’s provision of early grading permits that accelerated Compass’ ability to complete all platting activities to meet the target date necessary to break ground in early October 2016. This collaborative operation between Compass and the AEDC effectively reduced a normal timeline of 12-18 months into one of slightly over two months.
FAST TRACK PERMITTING
Before construction on any data center can begin, multiple elements, including the design of the building, the plan for the surrounding landscape and the plans for sub-systems like fire suppression must be approved and have the proper permits issued. Since requirements often vary from municipality to municipality, the approvals obtained for a data center built in one location typically don’t carry over to another. In this sense, each new project is its own unique entity, and the time required to obtain the proper permits, typically six months or more, must be factored into a provider’s overall timeframe.
Since a 6-month permitting process would have meant that Compass could have only begun building Tierpoint’s data center after it was due, the AEDC was instrumental in working with the city to establish a fast track permitting process and structure. The implementation of this fast track process incorporated the efforts of multiple departments within the city as evidenced by their establishing a special city task force dedicated to the project as well as the assignment of both a dedicated plans reviewer and a senior building official. The inclusion of a dedicated building official was particularly important as it enabled a “just in time” inspection process to be adopted under which all inspections were performed in concert with the project’s scheduled milestones resulting in “continuous construction activity” to take place as the start and stop inspection processes that characterize the majority on new data center projects.
MEDIATION
No matter how well planned and executed, every data center project is going to encounter one or more “issues” that can result in damaging schedule delays. Early in the construction process it became apparent that the successful ability to accommodate the site’s storm water considerations was going to require an easement. Although the resolution to issues like this are always technical/physical in nature, the problems themselves typically carry a higher level of volatility since they are often human facing. “Not in my backyard” or “I don’t want to look at that” are often logical reactions to proposed solutions and this one was no different. In many instances, the municipality tends to take a “hands off” approach thereby leading to extended periods of acrimony while an acceptable solution can be agreed on.
In this instance, the AEDC assisted Compass in quickly resolving the issue by actively engaging as the mediator between multiple constituencies that included: nearby landowners, city management, planning and zoning, the city council and the utilities in question. By assuming an active role in the discussion, the AEDC facilitated an environment of proactive dialogue amongst all the effected parties to achieve a solution rather than passively disengaging and risking the issue resolving into an exercise in finger- pointing and recrimination.
In this instance, the AEDC assisted Compass in quickly resolving the issue by actively engaging as the mediator between multiple constituencies that included: nearby landowners, city management, planning and zoning, the city council and the utilities in question. by assuming an active role in the discussion, the AEDC facilitated an environment of proactive dialogue amongst all the effected parties to achieve a solution rather than passively disengaging and risking the issue resolving into an exercise in finger-pointing and recrimination.
SUMMARY
The physical construction of a data center is, to use a popular cliché, only the tip of the iceberg, with site acquisition, permitting and development comprising the majority of the project. although most providers are confident in promoting their “above the line” time of delivery it is their ability, or inability to compress the acquisition and development processes that set the facility’s “true” delivery date. These efforts can only be achieved via a strong relationship with a municipality that understands that building a data center carries requirements unique from those of erecting a new warehouse or strip mall within the city limits. Since the demand for data space shows no signs of abating, collaborative relationships like that between the AEDC and Compass should be expected to increasingly become the rule and not the exception. Note: Tierpoint’s data center was delivered on March 31, 2017 as promised.
Chris Curtis is the Senior Vice President of Development and Acquisitions at Compass Datacenters. He can be reached at [email protected]. Dan Bowman is Executive Director and CEO of Allen Economic Development Corporation in Allen, Texas. He can be reached at [email protected].
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