Yahoo Eyes Lockport, NY for Data Center

Yahoo (YHOO) has filed plans for a $150 million data center in Lockport, New York and hopes to begin work in August building a 190,000 square foot server farm. Officials in Lockport announced Yahoo's interest after the company filed site plans with the city planning board. Lockport is about 25 miles northeast of Buffalo, NY.

Yahoo has told local media the Lockport location is "not a done deal" and the company is still considering other states. Yahoo's board has yet to approve the proposal, and the company is apparently debating whether to buy or lease the site. But the filing of site plans suggests that a decision is all but done but can't be finalized until a pending package of tax breaks is approved.

The company has filed site plans for a 30-acre parcel along Route 270. Yahoo also considered sites in nearby towns of Pembroke and Cambria, and had previously scouted locations in Virginia and eastern Canada.

“We suspect we’ll hear from the Yahoo! board of directors in early July," Lockport Supervisor Marc R. Smith told the Buffalo News. “The receipt of the application from Yahoo ... is just one more step in the process of reaching an agreement with Yahoo! We are hopeful at the conclusion of this process that Yahoo! will be bringing its investment and jobs to Western New York."

The New York Power Authority has approved 10 megawatts of low-cost hydro power for a first phase of construction for a Yahoo facility. A second phase, expected for the spring of 2012, would receive an additional five megawatts of power. The Buffalo News has estimated that the power deal will save Yahoo $101.2 million over the 15-year life of the deal. The projects is expected to create 75 jobs paying $50,000 per year.

Lockport is offering a Payment in Lieu of Taxes (PILOT) incentive that would include a 20-year tax break that would have Yahoo pay no property taxes for the first 10 years, then pay 20 percent more every two years after that. The deal would also include a sales tax exemption on all equipment purchases, an incentive which has been adopted by a number of states hoping to lure data centers.

The Lockport Planning Board will discuss the Yahoo project next Wednesday, and the town already has scheduled a public hearing on the site plan for June 30.