Saturday, November 25, 2017

North Dakota’s largest city gives telco $500k tax break in lure for Tier III data centre build

Tax exemption passes with only one commissioner against it as hub is expected to create ‘only’ two to three jobs.

The Fargo City Commission has given regional telecommunications provider Midcontinent Communications (Midco) a tax break of $500k in an attempt to secure data centre investment in the city.

Commissioners have decided in the first meeting of 2017 to give the tax break as Midco plans to invest $12m in a 16,000 sqf data centre in the South West part of Fargo in Urban Plains.

According to local news service Inforum, the company is yet to purchase the land on which it plans to build the facility.

Justin Forde, Midco director of public affairs said the purchase is expected to be completed by the end of January with construction works projected to initiate in the spring.

He said: “This is the type of facility that is in demand for the future of technology.”

Scheduled to come online in 2018, the data centre will be used to host, store and monitor data services.

Despite the favourable vote regarding the tax break, City Commissioner Tony Gehrig opposed the exemption saying the data centre would be built even without the tax incentive and that the hub will not create enough jobs to deserve a tax break.

Commenting on Gehrig’s views, Forde counterargument was that the data centre will attract digital businesses to a region where Tier III data centres do not yet exist.

He also said the company considered up to 40 different locations across the region.

Gehrig said: “My opposition to incentives should never be taken as an opposition to growth.”

Headquartered in South Dakota, Midco has over the last year made a large investment in North Dakota, especially around Fargo with capital expenditure topping $50m.

The company is currently expanding its network infrastructure in the region with the first phase expected to be activated in by the end of this month.

Clay Stephens, Midco’s Senior Director of Regional Operations, said: “So far, with 85% of the project complete, we have built out more than 2.2 million feet of underground line and turned on 233 power supplies to deliver services to Fargo residents and businesses.”