South Sioux City in Nebraska has paid back a $685,000 grant after its data center failed to bring in jobs to the city.
First reported by the Siouxland Public Media News, the city was awarded the Community Development Block Grant for a data center business park in 2010 near the Northeast Community College Campus by the Nebraska Department of Economic Development.
The funding was also awarded to the cities of Aurora and Kearney by then Governor Dave Heineman in Nebraska and was designed to help them develop "power park" sites, with the anticipation that they would attract data centers and high-tech industries.
Those sites were required to exceed 50MW in capacity and have power available at less than five cents per hour. They were also poised to offer green advantage capabilities in construction and operation, including geothermal, outside air economization for cooling and sales tax refunds, and personal property tax exemptions for data centers through the performance-based Nebraska Advantage incentives.
Sioux City used the funding to complete a purchase of 108 acres of an existing 314-acre parcel. In addition to the CDBG fund, the local Community Development Agency, contributed just over $1 million, bringing the total investment in the data center park up to $1.77m.
The city hoped that its high capacity of reliable and low-cost power would attract data centers to the park. This did not materialize, and the city thus failed to produce the 22 jobs for low-to-moderate-income residents as was required.
At the time of the award, Aurora, Kearney, and South Sioux City each received $50,000 for phase one and initial planning, and worked with national and local companies in commercial real estate including Gensler, RTKL, Corgan, CBRE, HP, Syska, Hennessy, Grubb & Ellis, SCORR Marketing, and CBRE/MEGA.
The city has now repaid the state.
Nebraska does not traditionally have a large data center market. Data Center Map suggests the state has 17 data centers in four markets, the majority of which reside in or around Omaha.
