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Data Centers: New Use for Blighted Downtowns?

After the economic bust, a number of cities have been left with literally blocks of abandoned office space, creating an eyesore as well as hazards due to decay, arson, and squatters.

However, according to an article by Robert Sharoff in the New York Times, cities such as St. Louis are finding new tenants for their vintage downtowns: Data centers and hundreds, if not thousands, of servers. Unisys opened a data center in November that occupies in a five-story former department store building with an elaborate ornamented facade, the Times said. The center will eventually have about 300 employees.

Some cities have looked down on data centers, because they have huge demands on electricity — up to $1 million or more, according to the Times — with relatively few jobs created for that. On the other hand, that’s an advantage for cities such as St. Louis, which has excess capacity based on when downtown was dominated by large warehouse and industrial companies.

A similar development is going on in Dublin, where Amazon bought an abandoned supermarket warehouse to house its data center, according to Rich Miller of Data Center Knowledge.

Derrick Harris of GigaOM is suggesting that other cities hit hard by the recession, such as his own Las Vegas, look at attracting such tenants. “[T]the landscape is littered with abandoned supermarket and department store sites. Where those stores anchored shopping centers, the neighboring businesses are moving out or going out of business. We have a 24-hour workforce, limitless solar energy and an economy desperately in need of diversification — why not convert some of our large abandoned space into data center sites?”

Moreover, data centers are one employer that might not be outsourced, due to the time it takes for computer signals to travel long distances “If you’re in the middle of the country, the differences are pretty minor whether you go to California or Virginia,” Jonathan Heiliger, then Facebook’s vice president of technical operation, said in a 2009 article about data centers by Tom Vanderbilt. But extend your communications India, and delay begins to compound, the article continued.

What’s required to attract such tenants? In a word, power — lots of it, and cheap. “Massive data center projects require large amounts of reliable and cost-effective electricity,” said William deGrandis in his article, “Power Considerations in Siting Data Centers.” “Data center developers must consider key gating factors for siting data centers and negotiating power supply arrangements with utilities including: costs and economic incentives, regulatory requirements and utility procedures.” Even as far back as 2009, the electricity cost on a low-end server was predicted to exceed the server cost itself in less than four years — which is why data centers are located in lower-rate areas.

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I love this concept especially for government agencies who want to spur economic development. I’ve also seen this done in rural towns.

Andrew Rushton

This concept seems ripe with potential!

I’m wondering if major industrial hubs, past and present, such as Detroit and Pittsburgh, already have the power infrastructure to support this type of initiative?

Terri Jones

This is really exciting to me. I worked on downtown revitalization efforts in Maine and Arizona and data centers are such a good idea for repurposing those buildings and even bringing some people back to downtowns for other business development.