Digital Realty Wins Incentives, Could Invest $1.9B In Data Center Campus In Garland
A data center campus that may cost as much as $1.9B is underway in Garland with help from city incentives.
Data center location and solutions firm Digital Realty started work in the fourth quarter of 2022 on two data centers that will be part of the new campus. That first phase of the project, budgeted at $400M, will bring 16 megawatts of capacity when it is completed later this year, according to a press release from the city of Garland.
But Digital Realty's two buildings could be just the start of a more expansive campus. With 64 acres to work with, the Austin-based company said the site could see an additional investment of up to $1.5B. The data center campus would provide more than 150 MW of capacity if fully built out.
“The City of Garland has become a hot spot for data center development as well as multiple redevelopment and infill projects,” Garland Economic Development Director Ayako Schuster said in a statement. “Data center projects represent a highly dense form of development in terms of investment.”
Garland City Council last week approved a 50% tax rebate for 20 years and a four-year, 40% rebate on business personal property and real estate taxes for each phase of construction as part of an economic development agreement with Digital Realty, the Dallas Business Journal reported.
A separate incentive agreement approved for the first phase of construction will also give the company a rebate of up to $500K on development fees, a four-year 40% rebate of real estate taxes and a two-year 40% rebate on business personal property taxes, per the Business Journal.
The under-construction data centers have been leased to a financial services company that will bring in operations staff following equipment investments.
The data centers project is a joint venture with the Mitsubishi Corp. City officials said the development will be a significant contributor to future redevelopment in Garland as part of its expanded tax increment finance zone.
The next phase of the project is already in the works. Digital Realty filed a permit with the Texas Department of Licensing and Regulation earlier this month for an additional $120M, 410K SF data center building. Work on that project is slated to begin in March and wrap up in October 2026, according to the filing.
The Digital Realty campus is the latest in a string of data centers in Garland and elsewhere around the Metroplex.
Global information technology firm NTT Data is set to begin work on a $42M expansion of its data center hub in Garland this month. The 236K SF building will be the fourth at the 47-acre campus at 2008 Lookout Drive. Construction is expected to finish in April 2026, according to a permit filed with the state. Stream Realty also completed an expansion on its Garland data center facility to give it around 280K SF. A major cloud customer moved in last year.
Garland officials estimate the city could eventually be home to 2M SF of data center space along President George Bush Turnpike.
Also in north Texas, U.S. data center owner DataBank announced earlier this week that it plans to build a 480 MW data center campus in Dallas suburb Red Oak. That project, which will be on a 292-acre tract, is slated to complete in mid-2026, CoStar reported. Kansas-based QTS Realty Trust filed a permit this week for a 413K SF data hall space in Lancaster in southern Dallas County.
