Microsoft, QTS To Bring More Than 1M SF Of Data Centers To Irving

Irving is set to see construction on seven data centers that will span more than 1M SF of development now that government incentives are in place.

The Irving City Council approved incentive agreements giving Microsoft Corp. and QTS Realty Trust LLC 50% off their property tax bills for the next decade.

Microsoft is developing four data centers while QTS is planning three, the Dallas Business Journal reported. 

“As a part of Irving's economic development strategic plan, the city is focused on attracting diverse companies from key industries, including high-value industrial projects like data centers, to call Irving-Las Colinas home,” Greater Irving-Las Colinas Chamber of Commerce President and CEO Beth Bowman told DBJ in a statement.

A 50% property tax abatement was approved for Microsoft’s four data centers for a period of 10 years. The agreement requires the company to sign 15-year leases on the four buildings, with the first two required by the end of next year and the others by the end of 2026. It also stipulates the company will increase the taxable value of the properties by at least $200M by 2027. The square footage of Microsoft’s planned facilities was not disclosed.

QTS also was approved for a 50% property tax abatement over 10 years for its three planned data centers adjacent to the company’s existing campus in Irving. The terms of the agreement require QTS to occupy at least half of the planned 1M SF of space by the end of 2028 and spend $350M on the property by January 2029. 

The company already has projects with estimated costs surpassing that total in development in Irving, according to filings with the Texas Department of Licensing and Regulation. QTS operates data centers across the country, including locations in Fort Worth and San Antonio in addition to its 175-megawatt facility on 56 acres in Irving. 

Microsoft is involved in more than a dozen data centers in the state, according to the Texas comptroller's website. 

Data center demand has skyrocketed in Dallas-Fort Worth over the last several years, with JLL reporting earlier this year that most users have waited two to three years for space.

Garland is also a hot spot for data centers, with officials there estimating the city could eventually be home to 2M SF of data center space along President George Bush Turnpike.

Data center location and solutions firm Digital Realty is working on a data center campus that may cost as much as $1.9B in Garland. Digital Realty company also received city incentives for the project.

The power requirement of data centers is expected to help nearly double statewide demand on Texas' self-contained power grid over the next six years.

However, state regulators are rolling out requirements allowing them to keep a close eye on power usage by cryptocurrency mining data centers. Those companies must now submit detailed reports on their energy use.