Data Centers in the Desert?
It makes more sense than you might think.
Peoria, Arizona presents an opportunity for companies looking to relocate or expand their presence in the computer data center market. Builders, developers, site selectors, and consultants/analysts are encouraged to read below to find out why Peoria should be at the top of your list for potential locations.
What is a Data Center?
A data center is a secure facility that houses a large volume of servers, routers, switches, and other computing equipment used in high volume data storage and processing. Data centers are the power houses that run many of today's online services - everything from e-mail to video streaming services, social networking, online shopping, and banking.
Data centers strive to provide access to information 24 hours a day, 365 days a year with minimal to no service disruptions. Data centers are a critical part of our modern world, even though they are not as visible as other communications infrastructure such as cell towers, telephone poles or post offices.
Why Build Data Centers in Arizona?
Arizona is a top choice for data centers for several reasons.
1. The Ideal Low-Risk Environment
Southern Arizona cities such as Peoria are recognized as having a very low risk of environmental and natural disasters, according to data from the National Oceanic and Atmospheric Administration, University of Miami, and U.S. Geological Survey. Severe weather events and natural disasters can cause disruptions in service - something you don't want for a data center. Locating in the desert away from areas prone to natural disasters is a smart way to reduce the risk of outages.
- No hurricanes or tropical storms
- No tornadoes
- No snowfall/winter storms
- No volcano activity
- Not prone to flooding
- Low seismic risk (no major active fault lines)
2. Room to Build
The key to data center efficiency is "right sized." Constructing a brand new data center facility in Arizona from the ground up gives operators exactly the amount of capacity they need, compared to taking over an existing building or facility. There are plenty of shovel-ready sites in Peoria that are ready to begin development.
Researchers, consultants, site selectors, and developers can contact Peoria Economic Development at (623) 773-7735 to request a list of our top shovel-ready sites for a data center facility.
Advances in data center design and cooling technologies mean that a brand new, ground-up facility can be significantly more energy efficient than a facility built 5-10 years ago. This results in lower operating costs and avoids the hassle of trying to retrofit an existing facility without interrupting service.
In a broad sense, Arizona has an abundant supply of cheap land to build on compared to other markets and metropolitan areas in the United States.
3. An Established Market
Big tech companies have already realized the numerous advantages of building a data center facility in the greater Phoenix area. By choosing to locate your data center in Peoria, your business can be neighbors with companies like Apple, Google, Microsoft, Iron Mountain, Aligned Energy, and many others.
These companies have not only found an abundance of land and a stable environment, they have also recognized the talent pool of the region's workforce. With so many data centers, Phoenix has become a hub for computer network engineers, computer systems administrators, storage administrators, network and security specialists, and other related technical staff. It is not difficult to find experienced data center employees in the region.
|Operator||Size (sq ft)||Location||Opened|
|Digital Realty Van Buren Data Center||175,000||Phoenix, AZ||2009|
|IO Data Center||538,000||Phoenix, AZ||2009|
|Alaska USA Federal Credit Union||60,000||Glendale, AZ||2012|
|Apple, Inc.||1,300,000||Mesa, AZ||2016|
|Aligned Energy||550,000||Phoenix, AZ||2017|
|Cyxtera Technologies||45,000||Phoenix, AZ||2017|
|Cyxtera Technologies||37,000||Tempe, AZ||2019|
|Iron Mountain||550,000||Phoenix, AZ||2019|
|Stream Data Centers||418,000||Goodyear, AZ||TBA 2020|
|Vantage Data Centers||1,000,000||Goodyear, AZ||TBA 2020|
|Compass Datacenters||1,816,000||Goodyear, AZ||TBA|
4. Affordable Cost of Energy
A report published by the U.S. Energy Information Administration in 2019 has identified the Mountain region (#8) as having one of the lowest average costs for energy in the country. Many cities in the Phoenix metropolitan area (including Peoria, Arizona) enjoy a comparatively low cost of energy thanks to a diverse portfolio of sources including natural gas, coal, and nuclear power. This means that the cost to operate a data center will be lower in this region compared with coastal regions.
Average Energy Cost by Region (All Sectors)cents per kilowatt-hour
1. New England - 17.37
2. Middle Atlantic - 12.06
3. East North Central - 10.09
4. West North Central - 9.27
5. South Atlantic - 9.78
6. East South Central - 9.19
7. West South Central - 8.08
8. Mountain - 9.26
9. Pacific Contiguous - 12.15
|Data Source: United States Energy Information Administration, Electric Power Monthly, April 2019|
In fact, Arizona is home to the Palo Verde Nuclear Generating Station (PVNGS), located approximately 35 miles west of Peoria, AZ. Palo Verde is the nation's largest nuclear power plant by energy produced, with an annual capacity of more than 32 million megawatt-hours (combined) from its three reactor units.
Palo Verde produces 71 percent of Arizona's electricity, with zero greenhouse gases emitted. The plant employs more than 2,500 workers and produces reliable electricity around-the-clock. This provides Peoria and other Phoenix metro area cities with reliable, clean electricity at a cost below the U.S. national average.
With its low cost and availability of clean, reliable electricity, Peoria is an ideal location for a power-intensive facility like a computer data center.
Prime Land Sites
Peoria offers a number of choice land sites to site selectors interested in identifying potential locations for a new data center. One of these sites is the Vistancia Commercial Core, located in northwest Peoria. This 320-acre site is zoned for Planned Area Developments and offers shovel-ready parcels with room to expand.
Peoria's Park West shopping center also has an available 16-acre parcel of land with excellent freeway visibility, that would be ideal for a new commercial development project such as a data center facility. The site has all utilities available including natural gas and fiber optic service.
Peoria's Rovey Employment Park is a 128 acre business and industrial park, with build-out capability of 328 acres. The frontage on 75th Avenue creates outstanding opportunities for a mix of office and industrial tenants. Rovey Park will be surrounded by other high-end technology businesses and can capitalize on easy freeway accessibility and close proximity to an airport. Research and development-oriented companies, commerce park users and commercial retail will support the proposed employment center.
The Right Infrastructure
Energy Capacity - The Vistancia Commercial Core site in Peoria is located close to the APS Westwing substation, which offers a capacity of 40 megawatts of energy (expandable to 120 megawatts). This makes it an ideal location for power-intensive businesses such as a computer data center.
Telecom Providers - Peoria is served by Salt River Project, which operates the largest independent fiber network in Arizona. View SRP Commercial Fiber Network Map Plus, other major telecom providers in the area such as CenturyLink, Cox, and Integra Telecom provide redundancy, subject to availability.
Economic Incentives for Data Centers in Arizona
Computer Data Center Tax Exemption
Did you know? The State of Arizona established an incentive program in 2013 for Computer Data Centers. Act now - applications end December 31, 2023!
Qualifying businesses may receive exemptions from transaction privilege tax and use tax at the state, county, and local levels for the purchase of qualifying equipment. New construction is eligible for a 10 year exemption, while a sustainable redevelopment project may be eligible for 20 full calendar years following the year of the certification. View more information about the Computer Data Center Program.
Quality Jobs Tax Credit
Arizona is looking to encourage business investment and the creation of high quality jobs in the state. Employers can receive up to $9,000 of Arizona income of premium tax credits spread over a three-year period for each net new quality job ($3,000 per year). Learn more about the Quality Jobs tax credit.
Expedited Development Process
The City of Peoria has adopted an economic strategy that includes expedited permit and development plan review services for businesses in specific targeted industries, including telecommunications and data centers. Qualifying projects will enjoy "front of the line" and reduced time frames to help get their projects moving as quickly as possible. Read more about Peoria's Priority Track program.
- Labor pool of over 1.8 million workers within a 30-minute commute
- 59% of the adult population has some college or a college degree
- More than 550,000 graduates from Arizona public universities since 1990
- Learn more about Peoria's workforce.
Quality of Life
Peoria is more than just a great location for data centers - it's also a wonderful place to call home. Residents enjoy a high quality of life with great parks, top-rated schools, and a diverse offering of affordable housing opportunities, including master-planned communities such as Vistancia.
For sports fans, Peoria is also the home of Spring Training Baseball for the Seattle Mariners and San Diego Padres. The city also includes Lake Pleasant, a 10,000 acre outdoor regional park, two community theaters, and an art museum. Read more about Peoria's Quality of Life.
Find the Perfect Location for a Data Center in Peoria, AZ
Developers, brokers, research analysts, consultants, and site selectors would be wise to consider Peoria, Arizona for the location of a new computer data center build. Peoria offers shovel-ready sites, the right infrastructure, a lower average cost of electricity, and many other factors ideal for data center facilities. Shouldn't your business be part of this rapidly-growing corridor of technology infrastructure. Don't miss out!
Contact Peoria Economic Development at (623) 773-7735 to learn more