Lockport Union-Sun & Journal Online

March 22, 2013

Yahoo! calling

Internet giant will build new data center and call center, bringing in 115 jobs

BY JOE OLENICK
Lockport Union-Sun & Journal

Lockport Union-Sun & Journal — TOWN OF LOCKPORT — Yahoo aims to expand its operations in the Town of Lockport by building a new data center and a customer call center in the town’s industrial park.

The projected $168 million investment would bring a total of 115 jobs, 100 of which will be located in the customer call center.

The Internet giant announced on Thursday its plans to build a 150,000-square-foot complex on the 13-acre property it purchased from Lockport in December. The property is just east of the existing 190,000-square-foot data center, which opened in 2010 in the Enterprise Drive and Junction Road corner of the park.

“This is significant, we’re excited about another 115 jobs coming here,” said David R. Kinyon, the town Industrial Development Agency executive director.

At this point, details about the customer call center are still being figured out. But, the call center will be located in the Industrial Development Agency Park for sure, said Paul Bonaro, facilities manager for the Lockport Yahoo data center.

“They (Yahoo management) are excited about the opportunity to come here,” Bonaro told the IDA Board of Directors on Thursday.

The new data center will be similar to the current facility, right down to its “chicken coop” design as well as the fact the new center will consist of three “pods” and an administrative wing. The coop uses outdoor air to cool the servers, mimicking the long, narrow design of a chicken coop that encourages natural air flow.

The current facility is a 190,000-square-foot data center with five “pods” or data wings and an administrative center. There are currently 77 full-time employees working at the site, which is Yahoo’s northeast data center. Other regional data centers are located on Omaha, Neb. and Quincy, Wash., which have been expanded in the past few years.

Yahoo’s plan to expand in Lockport is a good thing, said Larry Southwick, professor emeritus from the University at Buffalo’s School of Management. Office type industries such as Yahoo or Geico in Amherst are stable and diversify the market, which is what an economy needs.

“It’s very promising,” Southwick said. “It says something about the area.”

At Thursday’s meeting the IDA board of directors formally accepted Yahoo’s application for financial incentives. Yahoo is seeking a 20-year Payment-In-Lieu-of-Taxes for construction and equipment, as well as a 100 percent abatement of property taxes for the first 10 years of the deal. Then the exemption would be reduced by 20 percent every two years.

Yahoo would also receive a sales tax abatement on construction costs and for the replacement of computer and network equipment. Bonaro said the majority of the cost — roughly $100 million — was in equipment alone.

The Town of Lockport does not have a town property tax, meaning the municipalities most affected would be Niagara County and the Starpoint Central School District.

Tax incentives can help, but they should be used in moderation, Southwick advised. You don’t want to hurt municipalities or already existing businesses.

“You have to be careful about that,” he said.

The town IDA will hold a public hearing on the tax breaks, at 9 a.m. April 25 in the town hall on Dysinger Road. Additional details about the construction and call center are expected then, although it’s unknown at this point if the IDA board will vote that day on the incentives or not.

Also Thursday, the New York Power Authority Board of Directors approved an allocation of 7,200 kilowatts of low-cost power. A similar allotment of 15 megawatts, with similar tax incentives, is partially what drew Yahoo to Lockport originally.

BY THE NUMBERS • WHAT'S COMING: Yahoo wants to build a new data center and customer service call center, totaling 150,000 square feet • WHERE: The data center will go on the 13-acre site Yahoo bought from the Town of Lockport last fall, it's unknown where the call center will go, but it will be in the IDA Park for sure, according to officials • IMPACT: Yahoo will invest $168 million and would bring 15 new jobs with the data center and 100 additional jobs with the call center • INCENTIVE: Yahoo has submitted an application for IDA incentives that consist of a 20-year tax abatement, with the first 10 years being 100 percent property and sales tax exemption, followed by a 20 percent reduction of the exemption every two years

Contact reporter Joe Olenick at 439-9222, ext. 6241 or follow him on Twitter @joeolenick.