Uptick in Illinois Data Center Activity: Construction Company Seeks Agreement with Chicago Officials

Mike Allen
May 30, 2014

"Currently, there are 122 data centers in the state of Illinois, 71 of which are located within the Chicago city limits and the rest are spread throughout the suburbs, according to datacenters.com. This number is poised to grow in the near future, as several organizations in the computing industry have announced the launch of new data center projects in the state.

Construction Company Eyes Site Near McCormick Place
One of the most interesting and controversial of these recent data center initiatives involves James McHugh Construction Co., which had its eyes on a site near Chicago's McCormick Place since 2012. According to Crain's Chicago Business, the company was looking to develop an area just west of the convention center. However, the group ran into issues when city officials began investigating the same location for hotel construction.

The land parcel that McHugh had chosen for its newest Illinois data center was also being looked at by Mayor Rahm Emanuel and his administration, which hoped the site would be used to construct a Marriott Marquis. The 1,200-room hotel would be built near the proposed DePaul University basketball arena, providing lodging for those coming into the city for the games.

However, the contractor had planned a 314,000 square foot, six story data center at the same location. The issue escalated to the point that McHugh filed a legal complaint with the Cook County Circuit Court in the fall of 2013. The documents demanded that the city issue the required building permits that would allow the company to begin the data center construction.

In late May 2014, however, the McHugh Construction Co. brought a compromise to Chicago officials that would benefit both parties: build both the data center, as well as the hotel.

Crain's reported that the city ended building its planned large hotel a block away from the site in question, but wanted to construct an additional ""boutique-style"" hotel near McCormick Place. If the city agreed to McHugh's proposal, the 320-foot tall hotel would be constructed on the north end of the plot, leaving room for a 142-foot tall data center closer to the road.

A McHugh spokesperson told the source that the city ""tentatively agreed to support"" their proposed plan, but the two groups still have ""a long way to go"" in finalizing details before the projects can begin. At the same time, a Department of Housing and Economic Development spokesperson said ""the city has not agreed to anything at this point,"" so it appears that both the smaller hotel and data center initiatives are still up in the air.

Former Sun-Times Building to Become Data Center
Another Chicago-area data center project that is getting a lot of attention recently is the QTS Realty Trust Inc. investment. The real estate trust is reportedly purchasing a warehouse which used to serve as the Chicago Sun-Times printing plant, which closed in 2011. Crain's reported in late April that the company could pay $17 to $19 million for the facility, which would be rehabbed to house computing equipment.

QTS Realty wasn't the first data center operator interested in the site, which is in a strategic location near the Chicago River and highway. The plot also boasts a total of 30 acres, allowing for the construction of another structure in the future.

""What data center developers love most is having space to potentially build on,"" said Jim Kerrigan, brokerage principal at Avison Young Inc., one of the individuals involved in the deal. ""That way, their tenants don't have to go somewhere else to expand.""

The deal is still being finalized.

Forsythe's Suburban Illinois Data Center
Another data center project taking hold in Illinois this year is that of Forsythe Technology Inc., which announced the launch of construction on its Elk Grove Village facility. The planned data center would be 221,000 square feet, equivalent to roughly the size of four football fields.

The organization is taking a new approach to the facility, which it hopes will provide a middle ground needed in the current industry landscape. Forsythe's development team noticed that the typical wholesale colocation data centers were usually around 10,000 square feet, and housed 200 to 300 square foot cages for retail client use. However, there were not many other options for customers needing data center support.

""There is really a missing component in the middle,"" noted Steve Harris, Forsythe data center development vice president. ""It became apparent to us that we should look at something that bridged the gap between wholesale and retail.""

The company's new Illinois data center will include 56 1,000-square foot units, as well as a 670-square foot support room for cooling and other systems. The suites can also be combined to create spaces of up to 4,000 square feet depending on client needs.

""A client operating out of that suite can kind of feel like it's their own data center,"" Harris said. ""They walk in, and they see every bit of that 1,000 square feet as usable to them for their IT infrastructure."""



    Mike Allen

    "Currently, there are 122 data centers in the state of Illinois, 71 of which are located within the Chicago city limits and the rest are spread throughout the suburbs, according to datacenters.com. This number is poised to grow in the near future, as several organizations in the computing industry have ...

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