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The Short List

The Short List

Columbia has made the short list of two unnamed companies looking to potentially build data centers in the northeast industrial side of town along Route B.

This could mean increased property and sales tax revenue, a handful of high-wage jobs and a small footprint when it comes to development as data centers don’t use a lot of utilities and don’t attract a lot of vehicle traffic.

In fact, there are two Missouri sites—Ewing Industrial Park and Sutter Industrial Park— ready and waiting for the right company to come along. Each site has approximately 100 Missouri Department of Economic Development-certified acres with close access to utilities and broadband.

For these reasons, attracting a data center to Columbia has become an appealing opportunity for Regional Economic Development Inc., which promotes economic growth to the area, in part, through business development.

Still, there’s a lot of competition, and data centers tend to cluster in states such as Arizona, California, Washington, Oklahoma, Iowa, North Carolina, New York, Colorado and Texas. They also seek out proximity to hydropower, a large local population or an appealing regulatory climate. Iceland and Canada are alluring because data centers run hot, and these environments offer cooler climates and lower cooling bills. To circumvent that, Kansas City, Springfield and Branson have data centers in caves.

“I would say we’re certainly not putting all our eggs in the data center basket,” says Bernie Andrews, executive vice president of REDI, the organization behind this marketing initiative. “It’s one market we are continuing to try and look at attracting to Columbia because of the large capital investment. Data centers cost millions of dollars.”

The idea was formed in 2007 when REDI asked a consulting firm from Austin, Texas, to look at Columbia and advise on what could attract more technology to the area.

“The study determined that data centers would be a good target industry for marketing because of the University [of Missouri’s] strength in computer science and computer engineering and the fairly low disaster risk in terms of natural disasters,” Andrews says.

Marketing efforts to promote the Ewing and Sutter sites for development include REDI staff attending several data center conferences and trade shows in places such as Florida and California.

A couple years back, the city was the runner-up site to get a major data center to locate in north Columbia, says Mike Brooks, REDI president. But in the end, AT&T elected North Carolina for the project.

“Keep in mind, there are a thousand communities in this country that all want data centers,” Brooks says. “For a data center to be interested in Columbia, Mo., it would have to be someone interested in locating in the Midwest, or they are not going to even find us.”

 

Why Columbia?

When it comes to building a data center, every company looking for sites is going to have a list of criteria they are evaluating the locales on, Brooks says. The most important advantage Columbia offers is the opportunity for the client to purchase wholesale power, the largest cost item data centers buy.

The city’s electric structure allows the company to purchase direct through the city, which allows for relatively low-cost power for larger data centers. Also, Columbia is in a geologically low-risk to moderate-risk area for earthquake hazards, Brooks says.

“Boone County is several seismic zones away from the seismic risk of the New Madrid Fault,” Andrews adds. “ We have a risk, but is it much less than southeast Missouri.”

Columbia’s central location is also of benefit. The city would be ideal for companies that want to put their data backup centers away from their corporate headquarters but still maintain easy accessibility. “And we are still close to major metro areas, St. Louis, Kansas City, with good proximity to I-70,” Andrews says.

In addition, the climate here, though hot in July and August, is more temperate than other cluster site areas, such as Arizona or Texas, which means less cooling to data centers.

Furthermore, MU is working with REDI on ways to dissipate heat into the ground to better cool the proposed center. Yun-Sheng “Shawn” Xu, associate research professor for the Civil and Environmental Engineering Department, says such a system would not only cool the facility more efficiently, but also the energy could be sold to others nearby as a heat source.

“Data center machines produce a lot of heat,” he says. “That heat can be dumped to the ground rather than put into the air through a large heat exchanger under the ground; you actually pipe it into the ground.”

The piping system can be either vertical or horizontal, and heat generated from the data center can be carried to neighboring buildings for their heating purposes.

“You can make money through the operation [of this system],” Xu says. “The heat generated from data center can be used for domestic water heating or building space heating. If you can find a user for [the heat generated], you could cover the cooling expenses.”

 

Jobs and tax revenue

A Kansas City-based property-holding company, CB&T ORE Holdings II LLC, hired a property manager to market the Ewing site. The St. Louis firm, Jones Lang and LaSalle, has the property listed for sale in 10-acre to 283-acre parcels. There is electric, water, sewer and other infrastructure that surrounds both the Ewing and Sutter sites.

Although two companies — what Brooks calls enterprise centers due to their large size — are looking at the sites, it is too early to release details. But if one of these companies selects either the Ewing or Sutter site, it wouldn’t mean a lot of job growth, but it could rebound into that.

“There’s a strong possibility, if it is an enterprise center [going in], you would find ancillary services companies want to locate in close proximity to support that business,” Brooks says. “I can’t give you specific examples [at this time], but I would say, yes, there is a distinct opportunity.”

It will also create a strong tax base, and it does not put a great deal of stress on existing infrastructure, such as downtown development concerns on an already spent sewer and water system.

So how many tax dollars will it bring in? It’s impossible to guess at this point. “Is it a 10,000-square-foot building, or is it a 100,000-square-foot building?” Brooks asks. “The only way to answer the question is to know what the investment amount is, and then you can do an estimate, but it would only be an estimate because only the tax assessor can do the assessment.”

Columbia is home to small data centers, including some that are underground, such as ISG Technology on Stadium. Construction of a larger data center would be one step forward for REDI.

“Data centers cost millions of dollars,” Andrews says. “They provide tax revenue and are generally good projects.”

 

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