Data Centers Put 'Structure' In Infrastructure
By Lori Gary, Economic Development Director, City of Goodyear
Lori Gary, Economic Development Director, City of Goodyear
For a fast-growing community in the desert, attracting data centers is not an end unto itself. Do not get me wrong. We love data centers, so much so that we speak in terms of data center campuses rather than individual buildings. We currently have five such campuses in development, two by Microsoft Corp, and one each by Compass Datacenters, Stream Data Centers, and Vantage Data Centers. Data centers are the building blocks in a larger effort to bring high-tech jobs to our community.
A HOT MARKET
Goodyear, Arizona, is a fast-growing city with a population of nearly 85,000 located along Interstate 10, just 20 minutes west of downtown Phoenix. It is named for the Goodyear Tire and Rubber Co, which purchased 16,000 acres here in 1917 to grow cotton that was used to make its rubber tires.
The Phoenix area is second in the nation for the concentration of data centers, closing in on Northern Virginia, according to a report from commercial real estate advisory firm, Newmark Knight Frank, cited in the Phoenix Business Journal.
“The major drivers for increased data center growth in Phoenix and around the U.S. are planned 5G upgrades on cellular data, online gaming and streaming services, artificial intelligence, and big data analytics,” says a report by the Business Journal early the year. “All of these require massive data center storage to drive information quickly, collect more data faster, and increase bandwidth for faster services.”
WHAT IS SO SPECIAL ABOUT THIS PART OF ARIZONA?
Goodyear is a natural next step for technology-based businesses due to its geographic location, fiber connectivity, affordable cost of operations, the rarity of natural disasters, and the growing pool of knowledge-base workers.
Trade publication Data Center Frontier says Goodyear is emerging as a “significant submarket” for Greater Phoenix.
For the past decade, the mayor and City Council in Goodyear have worked to ensure that the city has infrastructure in place to attract data centers, which lay the groundwork for a technology-based economy.
To attract big investment, an area must have appropriate infrastructure. Data centers and high-tech businesses need a robust fiber network. I consider fiber to be the “sixth infrastructure,” along with roads, water, sewer, electricity, and natural gas. Data centers put the “structure” in infrastructure.
Goodyear sits along the national fiber network. Major fiber lines run through this pipeline enable data users to tap into the most advanced fiber system available. Data centers correlate to heavy users, therefore they are building out the fiber network within the community to meet user needs. Once this happens, other advanced technology businesses can take advantage of this new fiber infrastructure.
Early on, Goodyear’s electric provider, Arizona Public Service Company (APS), built a strong electric infrastructure in the community, which included purchasing substation sites in key locations for future delivery of safe and reliable power. The data center campuses are being developed near these key sites and the 230kV electric lines. The closer data centers are to the power sources, like substations and 230kV electric lines, the easier it is to procure the large and reliable quantities of electricity they need. They tend to cluster together because they share infrastructure requirements.
“Energy is the single largest recurring cost that data center operators incur,” wrote Rob Nash-Boulden from the engineering firm Black & Veatch in an earlier article for Enterprise Technology Review.
The large investments being made by the data center companies build the tax base for communities. These companies pay property taxes, both personal and real, on an ongoing basis. Real property is land and buildings, and personal property comprises of items that can be moved such as machines or equipment.
They also generate sales tax from the electricity they use.
Alongside, development of these campuses stimulates construction jobs and generates construction sales tax revenue for the city. While Arizona offers tax relief under certain conditions for qualified computer data center operations, the city has devised other creative ways to attract companies, including shovel ready sites, spec buildings, and accelerated development review processes.
Data centers also bring high-tech jobs—quality, high-paying positions.
Goodyear is home to a handful of technology companies and an educated workforce with skills the high-tech industry sector requires. While staffing will depend on the individual needs of each data center, they typically operate around the clock which means employment is bolstered since their operations are continual.
Data centers are the building blocks in a larger effort to bring high-tech jobs to our community
With five significant data center campuses under development, the long-term employment growth for these highly skilled and well-paying jobs could be quite substantial. If employees for these positions come from or join Goodyear’s skilled workforce, their presence in the community will generate additional property and sales taxes. Although it is not clear as to how long will it take to fully build out the campuses, the benefits to Goodyear and the West Valley will continue far into the future.
Data centers are an important link in the economic development cycle. With five campuses coming online, Goodyear is ready to pivot toward other tech-related industries. City leaders can leverage the fiber network and strong base of knowledge workers from the data centers to attract other types of technology companies as well in the near future.
It is all about building the base of technology workers in Goodyear and Phoenix’s West Valley. Jobs attract workers with desirable skills, who in turn attract more businesses and more jobs. That is how the development cycle rolls.