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Selling the cold, Minnesota's tech community welcomes data centers

Monday, December 22, 2014

By Star Tribune

The bracing chill of a Minnesota winter doesn’t make for alluring tourism slogans, but there is an industry beyond dogsledding in which it’s a selling point: data centers.

Selling all that cold air to tech companies that need to keep towers of computers from overheating has become the work of people like Tom Lambrecht, manager of economic development services for the utility cooperative Great River Energy.

“It’s hard to get a professional volleyball league to come up here, but we can get a data center,” said Lambrecht.

That’s the hope, anyway, of an increasing number of Minnesota cities from North Mankato to St. Cloud who see a long-term boost to property tax revenues in data centers — the places where all of the information on the Internet gets stored.

This year, after a slow start, it appears more companies have begun checking out the cold, with three newly opened data centers becoming the first applicants for a new Minnesota sales tax rebate for the industry. Seven more projects are in the queue behind them. Great River Energy, meanwhile, has searched among its membership for the best sites in Minnesota to place a new data center.

Driving their interest has been a flurry of development just over the border in Iowa, which this year alone has seen billions of dollars in investment from Google, Facebook and Microsoft. A mayor there of a town with 60,000 people proudly told the local paper that he expects a recently opened Facebook data center to someday rain $8 million in annual tax revenue. That’s on top of jobs and the indirect benefits to the economy of having a Fortune 100 company in the back yard.

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