Alabama strikes deal for $750M data center

Dive Brief:

The City of Huntsville, Alabama approved on May 24 a deal that will see the construction of a $750 million "large-scale data campus" there, according to Al.com. The city said it has been recruiting data center operators in order to beef up its high-tech business sector.
The name of the company who will own and run the data center has not yet been released, but Starbelt, the company that is facilitating "Project Cricket" on the owner's behalf, unveiled its future location, which is a 340-acre parcel of land in a city industrial park that the company has agreed to purchase for $8.5 million. Starbelt also has an option to purchase another 203 acres in the same industrial park for $25,000 per acre.
In exchange for building the data center in Huntsville, the company will receive a $6.6 million "non-direct" benefit package — $2 million in waived permit fees and $4.6 million of infrastructure work around the center. Other local agencies will also provide breaks. In return, the city, county and local school systems should see a package that includes a total of $165 million in economic benefits during the next 20 years.

Dive Insight:

This is only one of the major development deals the Huntsville area has either won this year or seen break ground.

Toyota and Mazda announced in January that they would be building a $1.6 billion auto manufacturing plant just outside of the city. Part of a $10 billion investment program, the plant will turn out 300,000 vehicles a year and employ about 4,000 people.

And last month, Google broke ground on a $600 million data center in nearby Bridgeport, Alabama. This is one of the projects that is helping the Huntsville region shed its manufacturing image and create more of a tech-friendly atmosphere. In fact, Google is giving the local Jackson County School District a gift of $100,000, and a portion of the money will go toward local STEM (science, technology, engineering and math) programs.

But companies like Google and Toyota have been able to count on big incentive packages from ambitious states like Alabama. The state reportedly promised a whopping $700 million of incentives to the automobile plant, for example, in order to secure the project. And Google was very generous when it donated $100,000 to local schools, but the company will receive an estimated $81 million in tax breaks and other incentives for building in Alabama.