Billion-dollar data center park proposed for Colorado Springs' south side

RICH LADEN Updated: October 28, 2010 at 12:00 am • Published: October 28, 2010

A $1 billion, state-of-the-art business park to house five to 10 corporate data centers is being proposed for Colorado Springs’ south side, where an on-site power plant could generate electricity for users from the burning of trash, wood and other materials.

The ambitious Vineyards Data Center, as it’s being called, would have the potential to create 300 to 400 permanent jobs for employees staffing corporate data centers, another 700 to 800 construction jobs, and $50 million to $60 million in terms of employee salaries, according to the developer.

But the project holds the promise of a return to the community that would far exceed its initial economic impact, backers say. They envision branding Colorado Springs as a data center leader — attracting facilities from Fortune 500 companies around the nation who, in turn, might be inclined to make additional long-term investments in the community once they locate a data center here.

In addition, the project could result in new recreational uses for the city and development of new tech-related curriculum and workforce development programs at the University of Colorado at Colorado Springs. And an “energy from waste” power plant would provide electricity for the community as a whole.

The investment in construction of the data centers, power plant and nearby public improvements could total $1 billion, supporters estimate.

Four years ago, Springs general contractor Vince Colarelli and a partner purchased the former nine-hole Vineyard Golf Course and the Pikes Peak Vineyards, a winery, southeast of Interstate 25 and Circle Drive and east of the Colorado Springs World Arena.

The 105-acre area initially was envisioned as a business park to house office and industrial uses. But the project stalled when the economy soured. The Colorado Department of Corrections chose the site for a new headquarters, but scrapped the project in early 2009 as part of state budget cuts.

Looking to revive the business park, Colarelli has proposed the data center concept on 65 acres and is seeking for the property to be designated as an urban renewal site. He outlined details to the Colorado Springs Urban Renewal Authority on Thursday, which would include donating 46 acres to the city for open space, Fountain Creek streamside improvements and an extension of a bike trail.

Declaring the property — which has poor access and rugged topography — as an urban renewal site means future tax revenue collected on the land and data center equipment would generate millions for roads and public improvements in the area. The project won’t succeed without the urban renewal designation, Colarelli said.

Data centers typically house hundreds of computer servers that operate corporate websites and internal computer networks and programs. They consume vast amounts of electricity, and businesses often locate the facilities in centralized areas where floods, tornados and other natural disasters are rare. Colorado Springs is home to data centers planned or operated by Hewlett Packard, Verizon Wireless, FedEx and Progressive Insurance.

UCCS already has indicated support for a business park dedicated to data centers, and could benefit from curriculum grants from major corporations, Colarelli said.

Many corporate giants, meanwhile, are going “green,” and an on-site plant that burns trash could be attractive, he said.

The power plant remains conceptual. It could cost upward of $200 million, and supply 40 to 50 megawatts of power. It would be funded by Colorado Springs Utilities or by private operators, Colarelli said.

Springs Utilities has studied such plants before Colarelli proposed his project, said Drew Rankin, general manager of energy supply for the city-owned utility. Such projects have appeal because they are relatively cheap to build and operate, compared with coal- and gas-fired plants and other types of renewable energy. They also offer an alternative to dumping waste in landfills, he said.

Springs Utilities has made no commitments to the Vineyards project, and City Council would have to sign off on any new power plant, regardless of what kind it might be, Rankin said.

The Vineyards site could be appealing, he said, because it’s close to a Waste Management transfer station where trash already is brought and recyclables sorted. A power plant near the transfer station means trash wouldn’t have to be hauled miles away to landfills.

If approved, a power plant would take at least four to five years to build, Colarelli said.

Mayor Lionel Rivera, while supportive of the data center concept, said he’d want commitments from users before going much further on the idea of a city power plant.

Colarelli said several potential users have indicated interest in the property, and a national survey of business executives shows many corporations are planning data center expansions over the next two years.­

Contact the writer at 636-0228

 

WHAT’S NEXT

The Colorado Springs Urban Renewal Authority on Thursday agreed to allow proponents of the Vineyards Data Center to conduct a study that would determine if their property qualifies as an urban renewal site under Colorado law, and to create an urban renewal plan or land-use blueprint. Those studies, to be funded by the Vineyards’ land owner, are expected to be completed in early December and reviewed by the authority at that time. The City Council has the final say on any urban renewal designation.

 

 

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