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Borek: Legislation helps county compete for data center development

Legislation creating a competitive operating environment to attract data centers was approved by the Illinois General Assembly this weekend and heads to the governor for signature, according to the Illinois Chamber of Commerce.

Advocated by both business and labor leaders, the legislation creates tax incentives for the state’s data center industry in order to bring high-paying jobs to Illinois and create greater economic opportunities and additional revenue streams for communities.

The DeKalb County Economic Development Corp. has worked with technology companies, developers and community leaders together with the Illinois and Chicagoland Chambers of Commerce to inform legislators of the benefits of data center development and the need for incentives to compete with other states.

Data centers employ highly skilled computer and information technology professionals, many of whom are educated at Northern Illinois University and Kishwaukee College. Data center development would provide attractive jobs, enabling students to settle and raise families locally, strengthening and diversifying the DeKalb County economy and contributing to the Illinois economy.

Research, development and information technology has been identified as a target industry cluster in the DeKalb County Thriving! Comprehensive Economic Development Strategy. Establishment of a viable research and technology cluster would strengthen NIU, DeKalb County’s largest employer and economic engine, by providing transformational student experiences connecting business innovation with university research.

Data centers are critical infrastructure facilities that store, process and distribute large amounts of data for a range of industries. Data center development would contribute to the local economy by providing high-wage technology jobs and expanding the tax base to support schools, municipalities and other governmental services.

According to the Illinois Chamber of Commerce, “data centers generated approximately $321.7 million in state and local revenue in 2017. Additionally, Illinois boasted 31,500 high-paying jobs within this industry, as well as $54.1 million in construction labor income for 820 workers.” With the addition of incentives, Illinois and DeKalb expect to see those investment and job numbers grow.

DeKalb County is distinctly equipped to support data center development because of the availability of high-voltage electric power from ComEd, an abundant municipal water supply from the city of DeKalb and virtually unlimited broadband capacity through a high-speed fiber optic network built by NIU with the support of the state of Illinois and DeKalb County.

The data center development industry has shown great interest in DeKalb County, selecting the ChicagoWest Business Center as the last Illinois finalist for an 80-acre, $350 million Fortune 50 data center campus in 2013. This prospect was positively inclined toward DeKalb and Illinois, but instead selected an Iowa location because of more favorable sales tax treatment.

Since that time, most major technology firms have visited and seriously considered DeKalb, but instead developed data center campuses over the border in Iowa.

“A recent study published by Mangum Economics for the Illinois and Chicagoland Chamber Foundations found that tax incentives were an important factor in data center development and have been passed in 30 states, including neighboring states,” according to an Illinois Chamber of Commerce news release.

“The study found that from June 2017 to June 2018, Chicago’s data center market lagged behind other states and only grew 7%.

By contrast, states and cities with incentives experienced much higher growth rates, such as the Phoenix market, which grew 26 percent; the Northern Virginia market, which grew 16 percent; and the Atlanta market, which grew 12 percent,” the release said.

We are particularly encouraged by the actions of the Illinois General Assembly because DeKalb is a finalist for another data center campus, codenamed Project Apogee. The DCEDC is confident that a competitive operating environment will generate significant new data center investment, job creation and tax revenue.

• Paul Borek is executive director of the DeKalb County Economic Development Corp.

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