Detroit. Data Center Capital of America Redux

Note: Saw that Apple just bought 2,000 acres and plans to spend $1.3 billion to build two new humungous data centers in Waukee, Iowa. We wrote this blog a few years ago but the same question still applies: “Why not Detroit?”

Life is good in Altoona, Iowa. With the coming of Facebook, servers will quickly outnumber the community’s 15,000 residents and the city is poised to become one of the country’s leading data center destinations. The citizenry of Altoona is ecstatic at their good fortune. The economic benefits alone are too numerous to consider. The police department is contemplating adding a second car, the country club might add nine more holes so members can play a full 18, and there’s a rumor going around that Krispy Kreme might be coming to town. Yes indeed, the gentrification of Altoona has begun—and good for them. I have nothing against the good people of Altoona. And yet I have to ask, “Why Altoona?” Why this small oasis in the Hawkeye state as opposed to say, the Motor City? That’s right, why not Detroit? I pose this as a serious question. I realize that a few of you effete data center snobs might snort in derision at the mere mention of this discussion, but really, what has Altoona got that the buckle of the Rust Belt doesn’t?

Perhaps the good folks at Facebook found that Altoona’s population of 15,000 gave the city a quant small town appeal. Kind of like a Mayberry on the plains. Detroit’s population is declining so rapidly it may be looking up to Altoona in a few years. Based on the most recent census data, one person left the confines of the city every 22 minutes during the last 10 years. That’s not migration, that’s evacuation. So many people have left the city that they are literally bull dozing whole neighborhoods of vacant houses as part of plan to turn the areas into farmland. So, in a way, Altoona and Detroit have more in common than you would think.

From a physical data center perspective, Detroit has it all over Altoona. Facebook is going to have to build their own facility in this sprawling suburb of Des Moines. This means they’ll have to chop down trees, grade and prepare the land, bring in building materials and run power to these new computing behemoths. How messy and expensive. The abandoned factories, or as the locals like to call them “the place where I used to work”, that abound within Detroit’s city limits offer a wealth of ready-made opportunities. All Facebook would need to do is move out the occasional stamping press, spruce up the interior, remediate a century’s worth of sludge and replace the Oldsmobile logo on the side of the building to be ready for action.

When any organization looks for a site to locate a data center they naturally take into account the intangible things that all contribute to the “quality of life”. After all, they do have to come to visit these places every once in a while—the ribbon cutting at least. I’m sure Altoona offers plenty of cultural alternatives, I heard that last year’s “Loganberry Festival” was off the hook, but would you rather watch the Altoona Community Players put on “Our Town” again or visit a mobilnett casino in Detroit’s Greektown? In fact, the city’s downtown area is so vibrant that it even draws the occasional suburbanite there after dark. Can Altoona say that? I didn’t think so.

In these dire economic times companies are faced with important data center decisions. The location of a major facility can have huge economic repercussions on a community. I urge these firms to expand the scope of their vision. Sure, things like the ability to use free air, cheap power and tax abatements are important, but in the end how big a deal is propping up an Altoona when they can be the salvation of one of this country’s formerly major cities? So as Altoona becomes spoiled and jaded by its new-found fortune, just remember that Detroit awaits you with open arms.