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Data center location selection: Incentives can tip scales

Though it is often a minor consideration for where to locate a data center, companies should consider incentives as a way to make a good deal better, one state organization says.

Kim Young is looking for data centers. The vice president of business recruitment for the Missouri Partnership, a quasi-public organization, Young's goal is to help companies get enough local, state and federal incentives to make locating a data center in Missouri a good choice. Young sat down with before she spoke at AFCOM Data Center World in Orlando, Fla.

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Mark Fontecchio: If a company wants to build a data center in a particular location, how should it start looking for incentives?

Kim Young: Don't get caught up in the name of the program. You can usually get the same kinds of benefits in most states, but they have different names. There are a lot of utility providers that provide incentives.

MF: How substantial can they get?

KY: I think that incentives can't make a bad deal good, but they can make a good deal better. With these projects, which are so capital-intensive, a company is will look at the overall cost of the project -- the utilities, fiber and so on. They usually make the business case for a certain location before looking at the incentives.

MF: What is the benefit for a state to have a data center built there?

KY: Data centers don't always have the highest job creation, but they are significant on the investment side. The tax benefit for a state and community can be fairly significant, including property tax as well as sales tax for equipment and electric services. Sometimes communities only want to go after the highest job-creating projects, but there are other benefits. For data centers, there may not be a lot of job creation, but the jobs are high-quality, high-paying jobs.

MF: So is it worth selling Missouri as a good data center location?

KY: Missouri is a great location for data centers. There are low electric rates compared with elsewhere in the U.S. We're a low-tax state. Labor costs are low compared with most other locations. There is an abundance of firms and suppliers throughout the state, and we have a ready workforce for the sector.

Let us know what you think about the story; email Mark Fontecchio, News Writer. Also, check out our blogs: Data Center Facilities Pro, Mainframe Propeller Head, and Server Farming.

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