Data center owners: Please give us tax breaks

Backers say lack of state tax incentives is hindering growth in Chicago

Chicago /
Jan.January 28, 2019 02:00 PM

(Credit: Pixabay)

Heaps of commercial property owners in Illinois take advantage of tax incentives, but data center owners say they haven’t gotten the sweeteners they need to stay competitive.

A new report funded by data center owners and the Illinois Chamber of Commerce Foundation says Illinois’ lack of tax incentives for the industry is stifling its growth.

Past legislative efforts to create tax credits for data centers have stalled, and other states have begun courting the industry with incentives, according to the report cited by the Chicago Tribune.

Still, the Chicago area ranks third in the country for data center capacity.

“We’re increasingly losing our desirability and our competitiveness,” Tyler Diers, executive director of the Illinois chamber’s technology council, told the Tribune. “Even though we’re still relatively high, we want to stop the bleeding before we no longer (are) a desirable location.”

Data centers employed more than 10,000 people in Illinois in 2017, according to the report conducted by Virginia-based consultant Mangum Economics. The industry’s total economic impact in the state in 2017 was about $2.4 billion in labor income and $7.1 billion in economic output, according to the report.

A surge in the construction of Chicago-area data centers ballooned the industry’s regional vacancy rate from 2 percent to 11 percent last year. Pushed by growing demand for cloud-computing storage, developers built almost 57 megawatts of capacity — enough to power more than 16,000 homes — around the metro area in the first eight months of 2018, according to CBRE data. [Chicago Tribune]John O’Brien

 

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