Monday, February 01, 2016
A timely real estate deal paved the way for Nevada-based technology company Switch to pull the trigger on a $5-billion data center investment in western Michigan.
As a result, Switch confirmed on Dec. 15 that it will establish the new SUPERNAP data center on the site of the former Steelcase Pyramid in Gaines Charter Township about 13 miles (21 km.) south of Grand Rapids.
Billed as the “largest data center campus in the Eastern US,” the project will ultimately encompass 2 million sq. ft. (185,800 sq. m.) and employ about 1,000 IT professionals on the 142-acre (57-hectare) campus.
Formerly known as the Steelcase Corporate Development Center, the site known for its pyramid-shaped facility had been on the market for half a decade. Although the building cost about $111 million to build in 1989, it went on the market in 2011 for $19.5 million, or about $3 million below its taxable value. Its final sale price was not disclosed.
The property in Kent County was initially sold last April to Roger Norman, a California real estate developer who has done real estate deals with Switch in Reno in the past. Switch is acquiring the building from Norman Properties.
Tim Mroz, vice president of marketing and communications for The Right Place Inc., the economic development organization for the Grand Rapids metropolitan area, says the real estate deal was put in motion when Switch founder and CEO Rob Roy and Norman were traveling together on business.
“When Rob Roy discussed Switch’s desire to establish an Eastern US presence with Norman, Norman told him that Switch should take a look at his building in western Michigan,” Mroz says. “That is really how the relationship started.”
A suitable building was just the first hurdle, notes Mroz. The company needed the high-powered infrastructure that could accommodate a SUPERNAP Tier IV Gold data center, and it also needed assurances that the state of Michigan would roll out the welcome mat in the form of tax breaks.
Switch got both and more, adds Mroz. “Steelcase built this site with an incredible amount of redundancy and infrastructure in the building,” he says. “It was a prime target for a high-tech data center. Plus, Gaines Charter Township [pop. 25,000] is close to our airport and has open, developable land near the highway. We will also provide very competitive electric utility rates through Consumers Energy.”
Category: Site Selection Magazine, News