How to Prepare Data Center Sites for An Attraction Strategy
16 Oct 2023
News, Strategic Plan, Business Attraction
If you are looking to attract a data center to your community, it’s critical to understand how to prepare sites or product that would be attractive and meet their needs. A data center attraction strategy must include available sites, ideally around 500 acres, along with the infrastructure to support them.
Consider Infrastructure Needs First
Ensuring your community has the infrastructure to support data center operations is an important first step in developing an attraction strategy. If the proper infrastructure is not in place, or cannot be developed, this may not be the correct industry to target.
One notable example of success is the Omaha Public Power District (OPPD) in Nebraska. Through innovative partnerships and a collaborative approach, OPPD, along with various local partners, successfully attracted Facebook to build a massive data center running entirely on renewable energy. OPPD’s ability to provide energy from renewable sources was critical for Meta choosing the location for their data center, a project that resulted in over $1.6 billion in investment.
The Next-Generation Data Center Design Could Need Even More Water
In addition to requirements for renewable energy, data centers have specific water requirements that are changing. It is vital to grasp the significance of next-generation data center designs. Companies like Meta are developing data centers optimized for Artificial Intelligence (AI) computing and training. These cutting-edge data centers support liquid-cooled AI hardware and high-performance AI networks, enabling data center-scale AI training clusters, and will have significant water requirements to support cooling.
Steps to Prepare Data Center Sites for an Attraction Strategy
1. Conduct a Comprehensive Site Assessment
Conducting a thorough assessment of potential data center sites is the first step in the attraction strategy. Data center sites typically range between 300 and 500 acres in size. Economic developers should evaluate factors such as infrastructure availability, energy sources, water supply, and access to fiber-optic networks. Additionally, understanding the unique requirements of next-generation data centers, such as liquid cooling capabilities, is essential to ensure the site can support the latest technology.
2. Focus on Energy Efficiency and Sustainability
Data centers are notorious for their high energy consumption. To appeal to tech companies and meet sustainability goals, it is crucial to prioritize energy efficiency in site preparation. Access to renewable energy sources and collaboration with local utility providers to offer competitive energy rates will significantly enhance the site's appeal.
3. Build Strong Partnerships
Collaboration between economic development agencies, local governments, utility companies, and other stakeholders is essential and will make the attraction process run more smoothly. If a technology company is interested in a site, they will need to have their questions answered quickly. Building these partnerships first ensures that everyone can come to the table and help push the project over the finish line. In addition, these collaborations can also facilitate the development of innovative incentives and policies that attract data center investments.
4. Offer Incentives and Support
Data center development requires substantial investments, and incentives can make a significant difference in the decision-making process. Incentives may include tax breaks, grants, expedited permitting processes, and customized rate structures for energy consumption. Economic developers should work closely with policymakers to create a business-friendly environment that encourages data center companies to invest in the community. For example, some states have waived personal property taxes, something that can make a huge impact on a data center’s viability. “Equipment may need to be changed out every ten years or less,” said Aaron Brossoit, CEO of Golden Shovel Agency. “If companies are paying taxes each time they upgrade or replace equipment it can make it difficult to operate in a community.”
5. Promote the Community's Advantages & Workforce Strengths
Highlighting the unique advantages of the community can enhance its appeal to data center developers. This includes showcasing the availability of a skilled tech workforce, the presence of established tech companies in the region, and a supportive business ecosystem. Demonstrating that a community has workers in the skilled trades is also important, since a data center cannot be built without them. Publicize success stories and positive impacts of previous company investments to demonstrate the community's capacity to support projects effectively.
Develop a Data Center Attraction Strategy
Preparing data center sites for an attraction strategy is a multi-faceted endeavor that requires a deep understanding of the industry's trends and requirements. As data centers continue to play a vital role in the digital economy, communities that proactively invest in creating data center-ready sites and offering incentives are poised to reap substantial economic benefits.
Unlock the secrets of attracting data centers to your community. Download the Golden Shovel Agency Whitepaper now to learn how to create effective strategies that attract Data Centers that paves the way for future success in your community.