A German global software giant will build a data center in a southside Colorado Springs business park - the area's first such user and culminating efforts by developers who long have envisioned the site as a high-tech hub for multiple corporate data centers.
SAP America Inc. of suburban Philadelphia, the U.S. subsidiary of international software corporation SAP paid $3 million last week for 9 acres in T5@Colorado, southeast of Interstate 25 and Circle Drive, according to El Paso County Clerk and Recorder's Office land records.
SAP spokeswoman Melanie Stevens confirmed Wednesday the company plans to develop a data center at the T5@Colorado site, although she didn't immediately have details about its size, cost, number of employees or timetable.
SAP, which business publication Dun & Bradstreet says develops software for various industries, has at least 23 data centers around the world, including 13 in the United States, according to the company's website.
Documents submitted to the city's Land Use Review Division in April showed development of a nearly 100,000-square-foot data center at the T5 site, although those plans didn't spell out the facility's owner or operator.
Vince Colarelli, president and CEO of Springs-based Colarelli Construction, who along with financial and development partners has proposed T5@Colorado, said Wednesday that SAP America's project is a milestone for the business park after years of work by his group and Colorado Springs city officials.
"It's an affirmation of what we have believed all along about Colorado Springs being a premier location for data center development," Colarelli said.
Data centers - large buildings that house sophisticated equipment where businesses typically operate their websites or internal computer networks - don't necessarily employ large numbers of people.
However, their owners and developers typically spend tens of millions of dollars on new construction and equipment, and the projects also create spinoff jobs.
The Springs already is home to data centers operated by Hewlett-Packard, Progressive Insurance, Walmart and FedEx, and city business leaders have hoped to attract more by marketing the Springs' favorable climate and low electric costs - keys to a data center's efficient operation.
T5@Colorado - formerly the Vineyard Data Center Park - includes 65 acres for development and 35 acres for trails and open space.
In 2010, Colarelli and a partner proposed the business park, which they said could accommodate five to 10 corporate data centers totaling hundreds of millions of dollars worth of investment. That year, the Colorado Springs City Council annexed the business park site and declared it an urban renewal area, which allows tax revenue generated from its development to be used to pay for utilities and other public improvements.
Since the urban renewal designation, Colarelli has worked with his partners and city and Urban Renewal Authority staff on the property's development. In April, he told the Urban Renewal Authority that three data centers projects - totaling a potential investment of $855 million in development and equipment costs - were pending at the site.
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