Data center offers incentives for Hutto services Iron Mountain plans to build near Samsung Austin Semiconductor
HUTTO — Officials with a proposed data center are suggesting a deal with Hutto in which the developer will provide benefits in return for city wastewater services.
No action was taken by the City Council during a presentation March 12 by representatives from Iron Mountain Data Centers, though members on the dais were intrigued by the company’s offer of incentives, noting developers usually come asking for those rather than offering them.
City Manager James Earp said he could think of several capital projects the developer could sponsor.
He plans to look into the legality of Iron Mountain making some type of payment to the city that could be used for debt service and lower tax or utility rates for residents.
“It’s not going to be just come and sponsor a picnic. It’s going to be something substantial for us to be willing, because if you were in the city, you would be paying full freight on property taxes,” Earp said.
Iron Mountain owns more than 30 data centers on three continents. According to its website, ironmountain.com, it operates 12 in the U.S.
The Williamson County facility would be its first in Texas and could take three years to complete.
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“It’s not going to be just come and sponsor a picnic.”
— Hutto City Manager James Earp Steven Walton, director of site selection for Iron Mountain, said the 500-acre site on CR 404 just south of Samsung Austin Semiconductor is in Taylor’s extraterritorial jurisdiction but is not in anyone’s sewer service territory.
He said the facility does not intend to annex into any city, so it will not benefit Taylor nor Hutto through city taxes.
A planned development in the area will already be receiving wastewater services from Hutto, and the data center wants to have access as well, officials indicated.
“Data centers are not popular with the people, for the large part,” Mayor Pro Tem Dan Thornton told Walton. “When we get property tax out of it and we can make the case that we’re making a good decision for the financial future of the city, then we can make that case for the public and it makes sense.”
He added, “When we’re not getting that, I’m having a hard time making that case … that it’s a good thing to go out of our way to provide the service.”
The proposed facility will have seven data center buildings, an electric substation, an electric utility yard and a retention pond. The developer plans to use a recycling closed-loop water system for cooling to minimize water usage.
Iron Mountain would be the second data center planned for the corridor surrounding Samsung.
In November, developer KDR announced a 210-acre lot at 1051 CR 401 would be home to a data center known so far only as Project Comal.
Walton said while there was a lot of misinformation about data centers, there were also some reasonable concerns and that was why he was approaching the issue through an offer of incentives to Hutto.
The 500-acre site will take up part of a tract that was already approved for a residential project known as Taylor Meadows Development.
The Taylor Meadows developer will now build a smaller residential subdivision on the remainder of the tract.
Hutto had already agreed to provide sanitary sewer services to Taylor Meadows. The decrease in the number of residences will mean an overall drop in the volume of wastewater service needed, even with the development of the data center, officials said.
Recently, data centers have been in the news because of the large amount of power needed to operate them, and the costs of infrastructure which are passed on from an electric company to residents as capabilities are upgraded.
“Iron Mountain has made a significant capital investment in terms of a letter of credit to (Oncor Electric Delivery) and we’re in ongoing discussions which will bring addition capital expenditures to build up the infrastructure and for the purchase of power from Oncor,” Walton said.
