Rackspace Seeks Data Center Tax Breaks in Reno, Nevada

Rackspace is exploring the possibility of building a data center in Reno, Nevada. The company applied for a package of data center tax breaks with the state governor’s economic development office this week, Reno Gazette-Journal reported, citing the managed cloud and hosting services provider’s application for incentives.

The company has not made a final decision to build in Reno, Rackspace COO Mark Roenigk said in a statement emailed to Data Center Knowledge. "We have identified some compelling benefits to adding a data center presence in Nevada,” he said. “However, at this time we do not have any finalized build-out or operational plans to share with you for this specific location or any other West Coast location.”

Rackspace is asking for a 20-year sales tax abatement on equipment and a 75-percent personal property tax abatement for the same period of time, according to RGJ. The tax breaks would apply to a potential 150,000-square-foot data center in Reno Technology Park, which is currently home to an expanding Apple data center campus. The data center outlined in Rackspace’s application would cost $422 million.

Switch, famous for its massive SuperNap campus in Las Vegas, is building a $1 billion data center campus across the freeway from RTP, close to the construction site of a Tesla battery manufacturing plant. eBay will be the anchor tenant in the Switch facility.

Nevada Governor Brian Sandoval signed a new set of data center tax breaks into law in June. Applying to both data center owners and colocation customers, the bill gives 10-year tax abatements to projects that cost $25 million or more and hire and keep at least 10 Nevada residents employed. A company that invests $100 million or more in a data center and hires 50 employees can enjoy tax abatements for up to 20 years.

If Rackspace decides Reno will be its next data center location, it is not likely to build it on its own. Like it has done elsewhere, the company will use a data center provider, such as Digital Realty, for example, which built its latest UK data center. “We can re-affirm that we do plan to remain consistent with our data center strategy of working with third-party data center development and operational partners,” Roenigk said.

State economic development officials are supportive of Rackspace’s application, according to RGJ. Spokesperson for the governor’s economic development office did not respond to a request for comment.