Google’s $1B Data Center Development Takes Big Steps

Google data center in Douglas County, Ga. Image courtesy of Google

Four years after the Mesa City Council approved a development and tax-incentive agreement with Google to build a massive $1 billion data center project on about 187 acres in southeast Mesa, Ariz., the project—codenamed Red Hawk—is finally taking flight.

The city’s Design Review Board on Tuesday, June 14, began reviewing the site plan for the first part of the three-phase project that will rise near the northwest corner of Sossaman and Elliot roads in the Elliot Road Technology Corridor. According to the Construction Journal, the project will have a total of 750,000 square feet, with construction set to start on the first phase in October. The journal reported that the electrical infrastructure and public utility provider has already begun work at the site.

Phase 1 will consist of a 288,530-square-foot, one-story data center building, a utility switchyard, medium voltage substation servicing the data center, a site entrance off Elliot Road with a security kiosk, public road improvements and an employee office building, according to information provided to the city of Mesa Design Review Board. The document dated May 31 noted the data center will consist of multiple server halls, necessary control and operation rooms, as well as service staff support areas. There will be full site perimeter fencing, lighting and landscaping.

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The second and third phases will consist of data centers identical to the asset in Phase 1 along with mechanical and electrical support and an associated medium voltage substation.

The document and accompanying information were prepared by HDR Engineering Inc., on behalf of the site owner, Stone Applications LLC, for Project Red Hawk. A Phoenix Business Journal story noted the project was called Red Hawk throughout Tuesday’s meeting. The business journal reported feedback from the Design Review Board will go directly to the city’s planning director for administrative review instead of the Mesa Planning and Zoning boards at this time.

HDR Engineering stated in the document the campus office building will be located toward the southeast corner of the site and will be where most of the employees will work. While it will be part of the first construction phase, HDR Engineering requested that the office building project scope not be considered under this initial Design Review as a design firm with experience in that building type will be used and a separate scope will be filed.

Agreement details

Under the agreement approved in July 2019, Google had five years to complete construction of the first phase and spend at least $600 million in capital expenditures and $180 million in taxable construction costs, according to the Phoenix Business Journal.

Future performance metrics cited in the business journal story include spending $800 million in capital expenditures and $240 million in taxable construction and building at least 500,000 square feet by July 2027; spending $1 billion in capital expenditures and $300 million in taxable construction costs by 2029 and building 750,000 square feet of the development. All three phases are slated to be completed by July 2030.

A 25-year government property lease excise tax agreement, or GPLET, will give Google a tax break of $16 million, according to several media reports. However, Mesa will still collect about $33 million in excise taxes. Combined with other taxes, the project is expected to generate more than $156 million in state, county and local tax revenue over 25 years.

Located north of the Phoenix-Mesa Gateway Airport, Google’s other data center neighbors in this part of the Elliot Road Technology Corridor will include Facebook parent company Meta, Apple and EdgeCore.