CyrusOne is a publically traded firm that owns and operates one of the largest portfolios of data centers in the world. The company is considering construction of three data center facilities in Allen with an estimated investment of $1 billion on land located north of the Allen Premium Outlet Mall.
The Allen Economic Development Corporation (AEDC) negotiated an incentive package with the company that includes an AEDC grant to assist with electrical infrastructure, as well as a recommendation for a 380 Incentive Agreement from the City of Allen to provide the equivalent of a 10 year, 40-percent property tax abatement, and up to $50,000 in reimbursements for water and sewer infrastructure. CyrusOne has indicated that incentives play an important role in their site selection decision.
The proposed Economic Development Incentive Agreement between the City of Allen and CyrusOne, LLC provides a rebate of 40-percent of the property taxes for the real property associated with the three data center facilities planned for construction by CyrusOne. The first and second data center facilities will each contain 210,000-square feet, with the third data center being 140,000-square feet. The three data center facilities will receive the rebate for a 10-year period beginning January 1st of the calendar year following completion of construction of the first data center.
As part of this agreement, the company is required to complete design drawings for the expansion of Commerce Parkway and deliver those drawings to the City. The City would complete construction of the road expansion at some point in the future.
The primary local benefit of a data center is the large capital investment, which is subject to both property tax and sales tax. AEDC staff requested that CyrusOne provide a highly conservative estimate of their capital investment, which represents 70-percent of the value that CyrusOne intends to achieve. The company would prefer to exceed these expectations.
The economic impact analysis produced by the AEDC indicates that the local taxing entities will receive an average of approximately $3.9 million in taxes on an annual basis. The average tax revenue generated for the City of Allen is projected at $2.3 million annually. These averages are calculated over a 10 year period and use a conservative schedule for constructing the three data center facilities.