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Farmington ripe for landing data center

Mark Lofthus, economic development director with Dakota Electric, says utilities companies can play a role in economic development to partner and facilitate site readiness and attract industrial development such as data centers. He spoke to Farmington officials July 27, 2017. Photo by Kara Hildreth / contributor

Imagine living with all the data and information you need at your fingertips — greater access than today with smartphones, laptops, iPads and live streaming music and movies.

Imagine a world where the reality is 50 billion connected devices and every human is connected to 10 devices.

The need for data storage will be greater and in high demand.

That world is not far off, according to Mark Lofthus, economic development director with Dakota Electric Association in Farmington.

"Your refrigerator will be able to tell when you are out of milk and it will be delivered to your house and what is that? Data. And that is data going into a data center and they are having it shipped from Amazon who is delivering it," Lofthus said.

Economic development triad

Farmington Economic Development Authority listened to a talk about demand and need for data centers Thursday, July 27, at City Hall. The discussion centered on why companies may want to build or relocate data centers in Minnesota or cities like Farmington within Dakota County.

Carrying 23 years of experience working in state government under five different governors, Lofthus said, "I have heard every perspective and all of those generally revolve around how can we promote growth."

For economic development to boom within Farmington, the triad is job creation, tax base and private development.

"Politicians and government officials all want to promote job creation and we all think about economic development as three essential elements," Lofthus said. "Most people would say 'yes' we want to create more jobs with the help and support of our tax base, and we want to leverage private investment and we don't want the government spending to get us there."

Giving the EDA a primer on how Dakota Electric is a cooperative, Lofthus said. "Our goal is to sell electricity and if we can sell of a certain type especially with projects like these large data centers that have a consistent load and avoid the peak demand."

Data centers

Data centers require a consistent load of electricity and energy from utility companies that can offer attractive incentives and ways to pay for the whole system, Lofthus said.

"This also applies to manufacturing companies that utilize consistent demand" of electricity, he added.

Describing data centers as large technology hubs that house large racks of data and power up computers, cool hardware and offer security. Data center companies in search of building or relocating have specific land and power needs, Lofthus said. In some cases, locational factors need to be taken into account.

Cities like Farmington have a great interest in such companies because they would carry a tremendous property tax benefit.

"Another asset for data centers for cities is that they do not put a heavy demand on city services," he said, listing for police and fire calls as two.

"There are not a lot of jobs for families with kids, so there is not a lot of demand on the schools either, but the jobs they have are very well paying jobs, typically because they are a very well paid and skilled workforce," Lofthus said.

"These are also companies that bring in a lot of suppliers and data centers on the East Coast and have buildings with 400,000 square feet with 50 full-time employees," Lofthus said.

In that data center site there may be 50 employees and that company may need 100 vendors to visit the site weekly for service, repair or installation.

Outsourcing data

Manufacturing or banks may decide in the future they do not want to run data center needs internally, so they may outsource that job to a data center, he predicted.

"Companies are realizing they do not know how to do that and they decide it is not their core business," Lofthus said. "If your IT goes down and you are a small business, you cannot take calls and if your system goes down."

Adam Kienberger, Farmington community director, added, "Some small businesses are dead in the water if they don't have their data services."

Lofthus attends four or five trade shows and conferences a year to promote companies coming to build or relocate in Dakota County and specifically Farmington, since he understands Farmington is welcoming new industry and manufacturing.

The wave of the future means there will be a greater demand for data centers to securely store all kinds of information and that data also will include a growing need to maintain cyber security.

"We have not even scratched the surface on all the data needs," he said.

The details

What: Bringing data centers to Dakota County

Who: Mark Lofthus, Dakota Electric Association economic development director

Why: Farmington and other cities within Dakota County may be ideal cities to locate a new data center.

Marketing characteristics:

• Conveniently located within 30 minutes of Minneapolis International Airport

• Certified data center ready sites

• Reputation for grid reliability

• Strong corporate environment and workforce

• Community support for data center users

• Sales tax exempt for 20 years

• 300-plus days of free cooling with Dakota Electric