Wal-Mart says it will build data center in Springs
This news story was published first, and free, at gazette.com
Wal-Mart announced Thursday it will build a corporate data center in Colorado Springs — an economic development coup that will bring jobs and a major capital investment to the Pikes Peak region by the world’s largest retailer.
“For them to make an investment of this kind in our community says a lot about the business climate of our community and our openness to business,” said Doug Quimby, Colorado Springs Regional Economic Development Corp. board chairman.
The deal has been in the making for months and united Colorado Springs, El Paso County and Academy School District 20 in offering financial incentives in hopes of landing the project.
“It’s a great community in which we’ve had a very successful partnership in the past with our retail facilities,” said Josh Phair, a Wal-Mart spokesman in Denver. “We know it’s a community we can work well with, and plan to.”
City officials say based on their estimates, and using information provided by Wal-Mart, the facility will cost about $100 million to build; the company declined to disclose the cost. Wal-Mart also is expected to invest another $50 million to $100 million in machinery and equipment over the initial 15-year life of the facility, city officials say.
The center will employ about 30 people with salaries of $30,000 to $70,000, Phair said. It will be built on 24 acres Wal-Mart has contracted to buy southeast of InterQuest and Voyager parkways on the city’s far north side; construction is scheduled to begin in October and is expected to be completed in late 2012, Phair said.
The project will have an economic impact of $488 million over its first 15 years in terms of wages for data center employees and construction workers, building material and equipment purchases and property and sales taxes paid to local governments, city officials estimate.
Beyond the immediate economic impact, city and business leaders hope Wal-Mart’s investment will lead to the company bringing additional corporate operations — beyond new stores — to the community. Likewise, they hope other companies will follow suit with similar facilities and make the Springs a data center hub; the city already is home to data centers operated by FedEx, Hewlett-Packard and Progressive Insurance.
“Wal-Mart is the No. 1 company in America,” said David White, the EDC’s marketing vice president. “It’s a very big fish. To land a facility of this size will send all sorts of positive publicity for this region around the country.”
Data centers essentially are technology equipment warehouses, where corporations operate websites or internal computer networks and programs. In Wal-Mart’s case, “the new data center will have strategic importance to our business and help us serve our customers more effectively,” Rollin Ford, Wal-Mart’s executive vice president and chief information officer, said in a statement. The company declined to be more specific about what operations will take place in the Springs.
Among reasons Colorado Springs was chosen, Phair said: low-cost and reliable electricity, since data centers consume vast amounts of power; an available and highly educated work force; and a location that’s largely free from natural disasters. Financial incentives also were a factor, Phair said.
To land the data center, Colorado Springs beat out Charlotte, N.C., which Quimby and White said had offered incentives totaling about $25 million.
Colorado Springs’ package totaled roughly $4.5 million in sales and business personal property tax rebates — about $2 million from Academy School District 20, $1.7 million from the city and $800,000 from El Paso County, White said. Wal-Mart receives the rebates only after it makes its investments.
The difference in the packages offered by Charlotte and the Springs demonstrate financial incentives aren’t the only factor in winning such projects, Quimby and White said. Yet had the Springs offered nothing, it probably wouldn’t have made Wal-Mart’s short list, Quimby said.
“Obviously, it wasn’t incentive driven,” he said of Wal-Mart’s decision. “But without any kind of incentives, I doubt they would have come here.”
In addition to its planned data center, Wal-Mart has nine retail supercenters and two Sam's Club warehouse stores that employ more than 3,000 people in the Pikes Peak region. Wal-Mart also recently announced it will build two smaller grocery stores on the Springs' east and southeast sides.
—
Contact the writer at 636-0228
