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5/31/13 Finance&Commerce>Print>Minnesota offers more data center tax breaks Finance & Commerce http://finance-commerce.com Minnesota offers more data center tax breaks so , by Chris Newmarker Published: May 31st, 2013 Minnesota could end up winning even '"`"" more data centers now that it is expanding the sales tax exemption it offers for equipment, software and electricity used in such projects. Gov. Mark Dayton signed a taxes bill last " week that allows refurbished data centers ; to also claim the exemption. a I As of July 1, projects have to be more than 25,000 square feet versus a previous j 30,000. And for brand new data centers, total project costs have to be more than I $30 million over four years instead of a previous $50 million over two years. Chaska officials think the expanded sales tax i break will help them win more data centers such Refurbished data centers will require a $50 as the $26 million, 220,000-square-foot data million investment over two years to center that Mortenson completed for United Health qualify. Group in the city last year. (File photo:Bill Klotz) E E I "We are very pleased with the sales tax break," said Chris Crosby, CEO of Dallas-based Compass Datacenters. Compass is proposing a Shakopee data center consisting of four buildings totaling 90,000 square feet that would serve an undisclosed Fortune 500 company. "While we are not the sole beneficiary of this break, our clients will benefit on their significant investments in computer [equipment], storage and network that gets put into our data centers," Crosby said in an email. Only 15 to 18 jobs would be created in Shakopee, at an average salary of$68,500, according to city documents. But Crosby explained that when it comes to companies with more than $500 million in annual revenue, most executives want data centers within 30 miles of their IT operations or corporate headquarters. I "For a municipality to try to get high-tech IT jobs without data centers is the proverbial 'tail wagging the dog,"' Crosby said. The sales-tax exemption expansion comes after another previous expansion that went into effect in mid-2012. The state Department of Revenue has no data at this time when it comes to what has been claimed in the past year. A state Legislature fiscal analysis shows the state is expected to offer more than $2 million in extra tax breaks over the next two years due to the new changes. I Chaska officials think the expanded sales tax break will help them win more data centers such as the $26 million, 220,000-square-foot data center that Mortenson Construction completed for United Health Group in the city last year. Golden Valley-based Mortenson is planning a 115,000-square-foot facility for Dallas-based Stream Data Centers that would sit on 12 acres at 1708 West Creek Lane in Chaska —just to the west of the United Health site. i i E Greenwood Village, Colo.-based ViaWest has acquired the vacant 158,000-square-foot former headquarters of Entegris, at 3500 Lyman Blvd. in Chaska, with plans to convert it into a data center. ' i E More flexibility, especially on the timeframe, should help both of the projects better qualify for finance-commerce.com/wp-content/plugins/tdc-sociable-toolbar/ p-print.php?p=61618 1/2