Amazon Web Services (AWS) has this week reached an agreement with the City of New Albany, Ohio, a suburb of Columbus, to invest $3.5 billion to build five new data centers in New Albany by 2030.
As reported by Cleveland.com's Jeremy Pelzer, the new agreement between AWS and the city, billed as the second-largest single investment by a private-sector company in the state's history, was approved Tuesday by local officials.
The move accounts for the first part of Amazon's $7.8 billion master plan to build more than two dozen data centers in Central Ohio.
The Columbus Dispatch reported that, of the $3.5 billion investment, $1.8 billion is for construction, with the remaining $1.7 billion to be put into equipment.
Information gleaned from Sept. 19th's New Albany City Council meeting and the Columbus Dispatch indicated that under the details of the agreement, construction of the five data centers and supporting buildings totaling 250,000 SF is slated to begin in 2025.
Ohio: A haven for data center tax incentives
That tax incentives are part of the deal comes as no surprise. As the CEO of a major provider of dark fiber infrastructure within Ashburn's Data Center Alley recently imparted to DCF for a separate, upcoming story, "In states where there are no tax incentives, too many data centers really don't get built."
As recounted by Cleveland.com's Pelzer, under the agreement approved by the New Albany City Council, AWS will receive a 100% tax exemption for the first 15 years of the data center campus's lifecycle, then a 75% exemption for the next 15 years.
Further, the Columbus Dispatch's Jim Weiker reported that AWS has agreed to pay the City of New Albany a minimum of $352,750 a year, followed by greater amounts over time, until the city receives $1.1 million annually by 2031.
Amazon's Long Tail In Ohio
The reports said documents filed with the Ohio Environmental Protection Agency by the New Albany Company indicate that AWS intends to ultimately build 29 data centers in the Central Ohio area.
Once operational, the five new AWS data centers in New Albany will stand to create 105 full-time jobs, with an estimated annual payroll of $9 million, according to information provided by the company to the New Albany City Council.
As quoted by the reports, Merle Madrid, AWS’ public policy manager, told New Albany council members at the Sept. 19 meeting, “This is step one, the $3.5-billion investment.”
AWS currently operates data centers in Ohio's Franklin and Licking counties. The company has spent over $6 billion since building the first of its seven existing Ohio data centers, beginning back in 2014.
Leading up to announcing this week's $3.5 billion, 5-data center announcement, the hyperscaler spent $116 million to purchase 400 acres in New Albany, near the location that Intel will be investing $20 billion in to build their new chip fab.
As further noted by July reporting from DCF's David Chernicoff on Amazon's forays into the Midwest,
"Google has a continuing investment in Ohio data centers, and the Intel development is going to be collocated in the area where Google’s existing cloud hub is located. That AWS is building in that same area, therefore makes a great deal of sense."
Ohio a Popular Locale For Data Centers
The agreement between AWS and New Albany follows Google’s announcement at the tail end of last month of a planned $1.7 billion expansion of its three data centers in New Albany.
Recent analysis by 42floors.com as cited by the Ohio reports found that, even leaving aside the Amazon and Google deals, Central Ohio has become a major hub of data center development over the past decade and a half.
The study contends that as of the end of 2021, data centers in the Columbus area covered 4.6 million SF – the ninth greatest footprint for any market in the nation.
Meanwhile, between 2012 and 2021, the Columbus area reportedly added 2.7 million SF of data center space, accounting for the the third-highest such expansion in the U.S.
The 42floors.com analysis cited Central Ohio’s “reliable power, relatively affordable land, and lower incidence of natural disasters” for the increase in development.
According to a Baxtel study cited in the Columbus Dispatch, the Columbus area now contains 40 data centers operated by 25 companies.
By comparison, the Cleveland and Cincinnati metro areas are cited as having 20 and 16 data centers, respectively.
Local CBS TV news affiliate station WBNS 10TV here reports on the New Albany City Council's passage of the ordinance for Amazon's $3.5 billion data center build in New Albany through 2030: