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Incentives forMissionCriticalProjects:
TaxPolicyChangesCanMeanSignificantAdvantages toRelocate
byTimComerford
Economicdevelopmentandenergy
incentives formissioncriticalprojects
continuetoexpandandcanhavea
greater impactonabusiness’bottom line
thantheydid justa fewyearsago.
Thoughstateand local incentives for
missioncriticalprojectsoftenarenotas
highasthose fora largemanufacturing
orheadquartersoperation, recent
changes intaxpolicynowoffer
significant financialadvantages for
companiesthatrelocatetocertainstates.
Inaddition,manyutilitiesareoffering
economicdevelopmentridersand
energyconservation incentives.
Thisarticlewillexplainthetypesof
incentivesthatareavailabletoday, the
impactandvalue for largecompanies,
co-location facilitiesandsmalldata
centers,andtheprocesstoobtain
incentives.
Background–Economic
Development Incentives
Fiveyearsago,economicdevelopment
incentives fordatacenterprojectswere
fairlyuncommon. Datacenters
challengedtheeconomicdevelopment
community’s long-standingpracticeof
measuringaproject’svalue largelybythe
numberof jobs itcreates. (Datacenters
create fewer jobspersquare footthan
manytypesof facilities.)
Complicatingthe issuehasbeenthe
undeniabletrendtowardsco-location
andwholesale facilities, inwhichthe
owneroftheproperty isnottheactual
userofthedatacenterspace. Now, there
are frequentlymultipletenants located in
thesame facility. Thisspreadsthe
project’s jobcreationand investment
overmultipleparties,making itdifficult
foranyonepartytomeetminimum
thresholds for incentiveprograms.
Thetide isturning,andvariousstatesand
communitieshavebeguntakingan
activerole inutilizing incentivestoattract
datacenteroperations forseveral
reasons. Datacentersdon’ttypically
meanhundredsof jobs inone location,
buttheydomean large investments,
high-paying jobs,and—increasingly—
new jobs. Further,co-locationand
wholesale facilitieshavebecomean
importantasset forthebusiness
community. Justascommunitieshave
beeneagertospur fiberdevelopment in
ordertobecompetitive,manycitiesare
findingco-location facilitiesarean
integral resourceandbuildingblock in
today’snetworkedenvironment.
Communitiesarealsorealizingthatthese
investmentsofthousandsofdollarsper
square footcreatesignificantspinoff
economicbenefits, includingsupport
jobsandservices. Clusteringof
companiesthatoffersimilarservicescan
occurafteronedatacenterexpandstoa
region. Inaddition, theseprojects
providesignificanttaxratableswhile
requiring limitedpublicservices.
