Asset management firm BlackRock Inc. announced that it has selected the Buffalo suburb of Amherst for the site of its new $80 million New York data center. The company has chosen a location in the CrossPoint Business Park and will soon begin building its 31,000 square foot computing and office facility.
BlackRock’s New York data center represents one of the biggest development projects in Amherst in recent years, hinging on an $79.8 million investment from the company. BlackRock officials did not share details about the type of computing work or data to be housed at the facility, nor did they elaborate on the number of data centers belonging to the company. According to documents from the Amherst Industrial Development Agency, there is “potential for future expansion.”
Data Center Tax Incentives
A main aspect allowing the project to progress is the approval of substantial data center tax incentives by the Amherst Industrial Development Agency on July 18. The governing agency allowed an approximate $9.2 million in tax cuts in connection with BlackRock’s New York data center. In exchange, the company will establish 25 employment opportunities within the new facility, each averaging $68,000 in annual salary.
Overall, the data center tax incentives are spread over breaks for sales, property and mortgage recording taxes. BlackRock will benefit from $6.87 million in sales tax cuts over 10 years, as well as $2.15 million in property tax and $164,919 in mortgage recording tax savings.
Due to the amount that BlackRock will have to spend to establish the data center and maintain it, the data center tax incentives were key to the company’s decision. All told, the asset management firm will spend about $15.9 million on construction, $16.2 million on new equipment as well as $44.6 million over the next decade on technology investments.
IDA documents noted that without the $9 million in tax breaks, BlackRock would have “evaulate[d] other options globally” to ensure that it had a new data center operating by the end of next year.
“Getting BlackRock here could be very valuable to us,” noted Amherst town supervisor Barry Weinstein. “It’s a tremendous amount of taxes we’re giving away, but it’s a great project.”
Even with the data center tax incentives in place, the company will still pay more than $970,000 in property taxes. If the same property were to remain vacant, the town would only make $14,550 in property taxes over a decade.