BEACON FALLS — As more businesses increase their usage of information technology on the cloud, a local construction company is looking to erect a data center on vacant land in town.
Torrington-based O&G Industries is having its subdivision company, Data Center, spearhead a project to construct a data center on about 25 acres of land it has owned for more than 20 years in between Gruber Road and Railroad Avenue, Data Center manager Bill Corvo said.
A data center is a building, a dedicated space within a building or a group of buildings where many banks, hedge funds or financial industries store and house cloud information. The cloud is software and services that run on the internet rather than locally on a person’s computer.
Last year, Gov. Ned Lamont signed a bill into law that went into effect last July for the state Department of Economic and Community Development to offer tax incentives for data center operators to locate their facilities in the state. This new initiative allows operators of data centers built in the state and who meet certain requirements to pay the municipality and skip sales, use and financial transaction taxes, Corvo said.
“It’s got to be competitive with (data center) projects in United States. That’s why they did it that way,” Corvo said. “The idea is to get a fair but competitive in the host municipality fee agreements as opposed to regular taxes.”
If it was normal taxes, no one would be coming here, Corvo added.
Corvo said the company chose Beacon Falls because of a major fiber optic line behind the property, easy access to Route 8, a number of airports and an excellent connection with the town.
“They have a very long and good relationship with the town,” Corvo said.
If a data center company invests more than $200 million, it will be a 20 year agreement in lieu of taxes.
If it’s more than $400 million, the tax exemption is extended for 30 years, Corvo said.
First Selectman Gerard Smith said at the Feb. 14 Board of Selectmen meeting that town assessor June Chadderton is determining what taxes the data center would generate to find the correct number to put into an agreement.
Once the agreement is finalized and town officials sign a memorandum of understanding, Data Center will bring the MOU to the DECD for approval.
Town officials are trying to come up with a factor from different areas of how to actually figure what the taxes are going to be which is challenging, Smith said.
“We’re hoping to have that done within the next thirty days. So the data center is kind of tied up in a legal quagmire because of the complexity,” Smith said at the meeting.
Selectman Peter Betkoski agreed that it is complex.
Smith said once the MOU is drawn up, it will go to the public for approval.
Data Center is expecting to be able to service multiple different industries according to Smith.
The state was not competitive with other states in the country where data centers have a high presence. The approval of the new legislation last year was critical, Corvo said.
“Basically the state was going to go all in for development of data centers,” Corvo said.
The DECD has a committee set up to review all of the data centers. After the state approval, Data Center would still need to get approval from local commissions at the town level, Corvo said.
“We’re looking forward to it,” Corvo said. “We think that we have a project that would be very competitive and likely to succeed.”
Town officials anticipate that it will be very good for the town, if the project moves ahead, Smith said the town will see great infrastructure improvements.
“It’s going to bring natural gas down to that area,” Selectman Michael A. Krenesky said shortly after the meeting. “It’s a huge infrastructure plus.”
Krenesky said the town will now have the opportunity to have natural gas on Main Street and on the other side of the Naugatuck River.
“The public works department, the public buildings all will have opportunity to get gas, Smith said. “It’ll be a boom for the town.”
Town officials are hopeful to have the MOU finalized within the next 30 days Smith said at the meeting.