Perception-wise, we’ll believe what anyone tells us
I didn’t make the 10:00 am city council meeting today.
“(Today) is a very big step in making sure San Antonio is the place to locate Microsoft’s next data center,” said Mike Manos, senior director of Microsoft Data Center Services.
Manos will attend today’s 10 a.m. City Council hearing to discuss a 10-year, 100 percent tax abatement for a 44-acre tract in Westover Hills. The city’s Economic Development Department is also recommending that $5.2 million from a CPS Energy fund should go to the project.
But I bet Manos explained how important that we give Microsoft the tax breaks because
“I think it’s important to note that when we do the site selection process it’s on a global basis,” Manos said. “San Antonio is competing with cities all over the country and world.”
Yes, lets give them all these incentives otherwise they might choose India instead. Don’t listen to the other part of what he said:
Microsoft looked at 31 variables in narrowing its site selection to San Antonio as its favored location, including the availability of fiber optic networks, affordable energy rates, and work and life balance for employees.
The city ranked very well, Manos said.
“San Antonio has a tremendous amount of good things to offer,” Manos said. “It sells itself.”
But not enough so that Microsoft doesn’t wants a little financial incentive to locate here. Now I’m not against all economic incentives but I do like to see some return on our investments. And let’s face it, the city hasn’t got a great track record in this area.
Furthermore, Microsoft doesn’t even meet the requirements for the tax abatement. As for San Antonio competing with cities all over the world, I don’t think so.
Data center locations ranked by operating cost
The ten least expensive cities by estimated annual operating costs:
1. Sioux Falls, S.D. $9,684,282
2. Winston-Salem, N.C. $9,799,928
3. San Antonio, Texas $10,314,249
4. Birmingham, Ala. $10,340,534
5. Ames, Iowa $10,378,916
6. Charlotte, N.C. $10,440,123
7. Indianapolis, Ind. $10,451,796
8. Tulsa, Okla. $10,452,228
9. Des Moines, Iowa $10,480,298
10. Columbus, Ohio $10,499,091
The way I see it, the $600,000 difference in annual operating costs is more than made up by our lack of snowfall accumulation or 90% humidity.
Data center site selection appears to have such specific factors, that the field is much more narrow than the rest of the world.
The Data Center Journal - Site Selection and Your Next Generation Data Center
As the focus has shifted from finding existing facilities to new construction, traditional site selection criteria are once again important. So what are prospects focusing on; energy, fiber, avoidance of natural hazards, low real estate costs, pro-business local governments, and quality of life. But the king of the list is energy and fiber. Why? These are the two largest line items that vary from site to site.
Energy can make up as much as a third of the total occupancy cost and more if the rates are high. However, there is more that should be considered then just rate; service availability, capital cost, size and capability of the utility, responsiveness when and if an emergency should occur.
After analyzing 31 factors, Microsoft isn’t keen to start the process over in South Dakota or even Austin. At this point, Microsoft is just looking for the gravy.
Data center locations ranked by operating cost
Baudry agreed that most of the areas landing data centers are providing some sort of tax incentive package, and the areas that seem to attract attention have active economic development groups — but it’s often something worked out after the location has already been determined.
Obviously, none of this matters since we’re going to give Microsoft what it wants anyway. It’s so much easier for San Antonio to try buy it’s way to a reputation rather than do the hard work required to develop from local talent which does exist!
Technorati Tags: Microsoft data center, Mike Manos, San Antonio, Economic Incentives, Tax abatements, Economic Development Department, CPS Energy, site selection
Filed under: Microsoft, Mike Manos, San Antonio, data center, economic incentives, tax abatement
