Chicago Becoming Data Center Hub: New Partnership and New Facilities

Mike Allen
July 29, 2014

"Although Illinois doesn't currently offer data center tax incentives like other states in the U.S., the mayor of Chicago hopes that a new partnership will help make the city more attractive to the technology sector.

Last summer, Mayor Rahm Emanuel announced a new partnership called the Data Center Express. Since then, a number of facility operators have launched projects in the city, including those involving wind power and leveraging existing structures.

Data Center Express Partnership
The Data Center Express partnership is an agreement including Chicago officials, World Business Chicago and Commonwealth Edison. The arrangement is aimed at consolidating and simplifying the data center startup process in the region. At the time of the announcement, there were 29 active computing facilities in Chicago, but the city has the resources to support a considerable number more.

Mayor Emanuel noted that data centers are a critical part of the technology industry and he hopes this sector will grow within the city. Chicago provides a number of benefits for data center operators, including stable utility costs, a favorable climate and general lack of natural disasters, as well as a central location.

""Chicago is primed to be a technology and data capital for the 21st century,"" Mayor Emanuel said. ""I am committed to laying the foundation for the new economy through initiatives like Data Center Express. which will make it easier for data centers to provide their vital services to Chicago's businesses, creating jobs and economic opportunity throughout the city.""

In addition to these advantages, the Data Center Express partnership will allow for a single point of contact within the city as a resource to foster the facility startup process. Since the launch of its pilot program in late 2012, all future data center projects will go through the partnership. As of mid-2013, a total of five data center operators had leveraged Data Center Express, including Server Farm Realty's Chicago facility.

Data Farm Server Benefits from Data Center Express
Data Farm Server's Chicago facility includes more than 443,000 square feet of space and eight stories situated on a 5.2-acre campus. The startup process was streamlined by the Data Center Express project, allowing the company to create its data center more easily than traditional projects.

The Chicago computing structure boasts 40 megawatts of electrical service, four client suites per floor and a total of 134,000 square feet of raised floor space. Overall, it also has one of the lowest PUE ratings in the city, projected at 1.4.

Server Farm Realty CEO Avner Papouchado noted that Chicago is an ideal region for data center operators.

""It offers aggressive power rates with a low carbon fuel mix and efficient, free cooling and is unmatched in its capabilities for content distribution,"" Papouchado said. ""Beyond its robust communications fabric, the city offers access to a well-educated high, work ethic labor while being centrally located, easily accessible to both the East and West coasts of the U.S.""

According to Data Center Knowledge, the company so favored the city that it added a second data center in the Chicago suburbs earlier this year. The new Oak Brook data center is comprised of two former office buildings boasting more than 193,000 square feet of space on more than 13 acres of land. As of early January 2014, the facility was already over 60 percent leased.

""In addition to being one of the best connected facilities in the Chicago market thanks to its expansive ecosystem of existing technology tenants, the Oak Brook data center features close proximity to robust underground telecoms fiber, as well as optimal power and electrical service,"" said Papouchado. ""Backed by SFR's deep technical capabilities, the region's dense fiber optic network, and solid infrastructure, the facility provides tenants with the expertise, connectivity and framework necessary to succeed in today's saturated technology market.""

Microsoft Launches Chicago Data Center Wind Project
Since the introduction of the partnership, there has been a considerable uptick in data center activity in Chicago. One such project involves Microsoft, which recently announced an agreement to purchase wind power for its Chicago facility.

According to Forbes, the computing giant has plans with the Pilot Hill Wind Project to purchase 175 megawatts of wind energy over the next two decades. Pilot Hill's wind farm is located about 60 miles outside Chicago city limits, straddling the border of Kankakee and Iroquois counties. It is connected to the same electric grid as the Chicago data center, however.

QTS'˜s $200 million Chicago Data Center Investment
Another Chicago data center initiative involves QTS Realty Trust, which recently finalized the details of a deal to purchase the former Chicago Sun-Times printing plant on the south side of the city.

After purchasing the structure for an estimated $18 million, the realty will leverage a more than $200 million investment to turn the former newspaper plant into a data center. The Chicago data center, projected to be completed in early 2016, will include 400,000 square feet of space and will have more than 100 employees.

Ascent's Third Chicago Data Center
Ascent is another data center service provider adding to the technology activity in Chicago. The company announced last year that it was building its third data center in the city, CH3. According to Datacenter Dynamics, the facility will be a multi-tenant data center with up to 50 megawatts of critical power load. Similar to the company's second Chicago data center, CH3 will provide flexible, dedicated client suites constructed to customers' unique specifications.

""Downtown Chicago is an attractive location for data center space, but previously didn't offer the options the market is now demanding,"" noted Ascent CEO Phil Horstmann. ""We're talking with companies about their current data center needs and developing CH3 to meet those market demands.""

Fidel Marquez, ComEd senior vice president of governmental and external affairs, noted that the company is working with Ascent to power all of their Chicago-area data centers and has noticed an uptick in activity downtown.

""The high-tech industry is experiencing significant growth in Chicago, and our ability to provide smart grid technology and industry-leading reliability in a state with a highly competitive electricity market makes Chicago an ideal location for mission-critical data center operations,"" Marquez said."



    Mike Allen

    "Although Illinois doesn't currently offer data center tax incentives like other states in the U.S., the mayor of Chicago hopes that a new partnership will help make the city more attractive to the technology sector. Last summer, Mayor Rahm Emanuel announced a new partnership called the Data Center Express. Since ...

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