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February 28, 2011

Data Centers Growing in North Carolina

SOUTHEAST REAL ESTATE BUSINESS 
THE SOUTHEAST REAL ESTATE SOURCE
COVER STORY, JANUARY 2011

DATA CENTERS GROWING IN NORTH CAROLINA
Coleman Wood
 
For years the high-tech industry in North Carolina has been focused in the Triangle area. The availability of office space and the dearth of research universities made it very attractive to tech companies. However, a different kind of tech user has been coming to a different part of the state over the past couple of years.

Western North Carolina is quickly becoming a hot spot for data centers. Companies such as Google, Apple and, most recently, Facebook are being attracted by cheap land and utility rates as well as a pro-business government eager to create new economic development in an area that has seen years of decline.

FACEBOOK DATA CENTER HIGHLIGHTS BURGEONING INDUSTRY IN WESTERN B.C.

Forest City, B.C. -- Facebook has announced plans to construct a new $450 million data center in Rutherford County. According to local reports, the social media giant paid $3.1 million to the county for 135 acres located just off of U.S. Highway 74 in Forest City, which is located about 65 miles west of Charlotte. The site is near a county-owned corporate park that caters to data centers.

The groundbreaking took place in November for the new facility, and construction is expected to take 18 months to complete. The project will create more than 250 construction jobs as well as 35 to 45 full-time and contract jobs once the data center is operational. The project is being designed to LE ED-Gold standards. Its sustainable features include cooling and power management technologies that reduce electricity usage as well as efficient software that requires less computing power. Data centers are known as one of the heaviest commercial users of electricity.
 
North Carolina Governor Bev Perdue stated in a prepared release that the state has been working with Facebook for approximately a year to bring together the land, utilities and, most importantly, incentives to make the deal possible. The governor’s office did not release details about the state-level incentives Facebook received, but local reports indicate that the company could receive up to $11.4 million from Rutherford County if it meets its investment goals.

Facebook completes a trio of large data centers that have come to western North Carolina in the past several years. Google currently operates a $600 million data center in Le noir, and Apple’s new $1 billion center in Maiden is close to operational.

There are several reasons these three companies chose the same region. Charlotte-based Duke Energy provides reliable, cheap electricity to the area — a very important factor given that some data centers can use as much power as a small town. The relatively milder climate in the western part of the state means that air conditioners for data center buildings would have to work less to keep large server rooms cool.  Further, the chillers that operate these air conditioners require a lot of water, and the region happens to be perfectly set up to accommodate that.

“These were communities that had, not only electrical infrastructure, but also water and sewer infrastructure in place because of the textile, apparel and furniture industries. So, that is a key ingredient,” says Dale Carroll, assistant secretary of commerce for the State of North Carolina.

After these traditional industries left the region, government officials sought out new industries to fill the void. Data centers just so happened to fit the bill, and officials at all levels of government have spent a considerable amount of time making sure the fiber-optic infrastructure in the region can match the electricity and water infrastructure already there. They have also spent time attracting high-tech companies to the region to show what it has to offer.

“A key part of rebuilding North Carolina’s economy is the direct and secondary jobs, and economic impact that comes from these huge construction projects,” Carroll says. “It’s safe to say that, between these three large data centers, there are literally hundreds and hundreds of construction jobs that come along with them.

“But it’s not just the direct construction jobs,” Carroll continues. “It’s the companies that end up providing everything needed for construction, restaurants and retail, and hotels in these communities. It’s significant. And when you think about the timeframe of these projects, it’s given a significant shot in the arm to those local economies as we work our way out of the Great Recession.”


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