American Express picks Guilford County for data services center

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1 American Express picks Guilford County for data services center The Greensboro Economic Development Alliance announced that the American Express data center project will locate in eastern Guilford County, NC. The City of High Point lies in Guilford County as well as Davidson, Randolph and Forsyth counties. Please see the following two articles. 'Pack' may follow American Express News & Record Friday, May 28, 2010 By Richard M. Barron, Staff Writer GREENSBORO Greensboro never gave the world anything like the Eyjafjallajokull volcano or pop singer Bjork. But we re second in the world only to Iceland as an excellent place to build a data center like the one American Express will build here, a major international contractor for such centers says. To put it another way, Greensboro may well be the best place in the United States for data centers. It has cheap, reliable power, available land and workers, excellent telecommunications and protection from natural disasters, said Ronald Bowman, executive vice president of Tishman Technologies in New York. His rating also puts this region ahead of such powerhouse cities as Shanghai, China; Mumbai, India; and Vancouver, Canada, also among the top 10. Top 10 locations for data centers 1. Iceland (Reykjavík) 2. United States (North Carolina) 3. China/Vietnam (Shanghai) 4. Latvia (no city given) 5. India (Mumbai) 6. Russia (St. Petersburg) 7. Canada (Vancouver) 8. Japan (Toyko) 9. New Zealand (no city given) 10. United Arab Emirates (Dubai) Source: Ronald Bowman, Tishman Technologies American Express confirmed last week that it will build a data center worth up to $600 million east of Greensboro. That likely will attract the attention of other companies that also will want to build here.

2 I think there s a pack mentality, Bowman said. I think everyone else wants someone to go first. Despite the real estate recession, suitable sites for data centers are in high demand, driving up prices. In Guilford County, American Express will build two buildings in separate industrial parks. One will go up at a 100- acre site at Rock Creek Center, an industrial park south of Interstate 40/85. The other building will be at an undeveloped corporate park across Interstate 40 from the first site. That site is owned by developer Roy Carroll. The buildings will go up one after the other. The larger will be built first at Rock Creek and cover 350,000 square feet and cost between $350 million and $400 million. It will serve as the main data center. The second will be 150,000 square feet and act as a backup for the main building. Bowman was not a paid consultant for American Express in this site search, but the company did ask his opinion of the site. He said he has visited Greensboro and talked with government and business officials to research the area. He believes the city may see an influx of data centers now that American Express has made its decision. It s the gift that keeps on giving, Bowman said. The initial corporate outlay is impressive by itself, he said. But data centers not only attract other data centers, they attract suppliers and companies that can provide services to these massive buildings that house thousands of computer servers. Major network companies such as Cisco Systems, Siemens AG and Johnson Controls are typical suppliers, he said. If they don t (already) have an office in Greensboro, Bowman said, they will have an office in Greensboro either near or at the site. Greensboro and this region surpass the Research Triangle and Charlotte areas for two major reasons. Bowman says the Research Triangle has too many data centers, including one that IBM opened earlier this year. Raleigh and the Triangle is over-discovered, he said. Data centers tend to be built in clusters, he said, so sooner or later you over-absorb. Charlotte has financial institutions and an excellent power grid, but it is too close to one major source of cheap, reliable power Duke s Catawba Nuclear Station, 12 miles away in South Carolina. That puts the city well within the 50-mile kill zone of a potential nuclear catastrophe, Bowman said. It s a mixed blessing, he said. That does make one wonder how safe a country with an ash-spewing volcano may be. Iceland remains perfect for data centers, Bowman said. Bowman said in an that 1 percent of Iceland had ash and that the recent volcano eruption was a media event that did not affect daily life for most businesses. The infotainment world of cable had their moment, he wrote. Overnight experts emerged and have gone away. # # #

3 American Express picks Guilford County for data services center News & Record Friday, May 21, 2010 By Mark Binker and Richard M. Barron, Staff Writers GREENSBORO Guilford County got the best of both worlds Thursday. American Express has decided to locate a $400 million data services center in the eastern part of the county and agreed to do so without requesting any local financial incentives [NOTE: later articles updated the figure to more than $600 million]. I would say congratulations to all of us. This is a big deal. A big deal, said Pat Danahy, president and CEO of the Greensboro Partnership. It also is a big deal that the company decided to forgo incentives. The decision left local leaders puzzled but delighted. That s refreshing, said Keith Debbage, a professor of urban geography at UNCG. I suspect a major reason for this is (their) level of familiarity with the marketplace. Greensboro is no stranger to American Express. The company already has a large call center at 7701 Airport Center Drive. That operation opened in 1985 and employs about 2,000 people. Debbage said the company could have other reasons for eschewing incentives. I suspect they don t want people poking their noses in their business. he said. It is also possible that a rapid decision is needed, and they didn t feel the need to get tied up in the public realm. At one point, local officials said city and county governments would consider putting up as much as $13 million in incentives. Some would have come in the form of infrastructure improvements. That would have been the largest outlay ever for area municipalities. Greensboro and Guilford County tentatively had scheduled incentives hearings related to the project but quickly canceled those efforts. Guilford County had been competing with Des Moines, Iowa, for the center. Data centers such as the American Express project are huge computer storage facilities that preserve company information. Local officials said American Express will build two buildings in eastern Guilford County. One will go up at a 100-acre site at Rock Creek Center, an industrial park south of Interstate that is seven miles east of Greensboro, according to Assistant City Manager Andy Scott. Richard Beard, a partner with Simpson Schulman & Beard, the company that manages and markets Rock Creek, declined to comment.

4 The other building will be at an undeveloped corporate park across Interstate 40 from the first site. That site is owned by developer Roy Carroll. The cost of the land transactions could not be determined Thursday. The buildings will go up one after the other. The larger will be built first at Rock Creek and cover 350,000 square feet and cost between $350 million and $400 million. It will serve as the main data center. The second will be 150,000 square feet and act as a back-up for the main building. Its cost could not be determined. It will be built in about two years, Scott said. The Carroll property likely will be annexed into the city. It will need water and sewer access, Scott said. Initially, the company will employ 50 to 60 people, but that number could grow to 150. Several attributes lured American Express to the Triad: a strong, uninterrupted power supply from Duke Energy, well-positioned Internet cables and a location generally free of natural disasters. Experts say more data companies will take a hard look at coming to Greensboro after the American Express deal. Sometimes we see the effect of data center clustering, said Rich Miller, editor of Data Center Knowledge, an online news service. One company will identify an area as being ideal for a data center and others will follow in short order. Dan Lynch, president of the Greensboro Economic Development Alliance, the city s top economic developer, said American Express counts as a bull s-eye for this city s business recruiting strategy, which includes data centers. It s in the sweet spot of our marketing strategy, Lynch said. The initial investment could exceed $400 million. Local officials have said the project ultimately could exceed $1 billion. It remains to be seen how big it might become, Danahy said. The city will earn an estimated $1 million in annual property tax revenue from the facility when it is fully operational, Scott said. Guilford County stands to make two or three times that amount from property taxes on both facilities, he said. Danahy said he did not know the company s timetable, but he added, they are anxious to get going. American Express notified local recruiters of their decision Wednesday night. The company declined to discuss its decision. Our policy is not to comment on our technology facilities, said Susan Korchak, a spokesman for American Express in New York. The Triad has plenty of experience with big-dollar incentives packages. They include Dell, which built a factory in Forsyth County in 2005 with about $280 million in state and local incentives, $37 million of which came from local sources.

5 FedEx built a massive package-sorting plant at Piedmont Triad International Airport with a $500 million package of incentives from the airport and state and federal governments. Dell said last year it would close its plant, but it continues to operate at reduced capacity. And FedEx is running at minimal levels until the economy improves, the company has said. Still, a few companies have opened major operations with little or no incentive money. Lenovo opened a computer distribution center in Whitsett in 2008 with no public incentive money. In 2007, Kay Chemical said it would spend $12 million to expand its plant despite being rejected for county incentives. And Honda Aircraft got a relatively modest incentive package of $8 million for its $100 million headquarters and assembly plant at PTI. Commissioner Paul Gibson said he applauds American Express. They did the right thing, he said. They came for good business reasons. Staff Writers Amanda Lehmert and Donald W. Patterson contributed to this report. # # #