Microsoft inks $52.2 million deal for data center in Elk Grove Technology Park

  • Land deals that would bring data centers operated by Microsoft and T5 to the sprawling Elk Grove Technology Park were revealed in public documents released by Elk Grove Village.

      Land deals that would bring data centers operated by Microsoft and T5 to the sprawling Elk Grove Technology Park were revealed in public documents released by Elk Grove Village. Mark Welsh | Staff Photographer, May 2019

  • Data center company T5 will occupy one of the newly-constructed buildings at the Elk Grove Technology Park, while Microsoft is set to purchase 36 still-undeveloped acres on the east side of the property. "We have the infrastructure for them. We have electricity, water and fiber optic. Elk Grove is a place to be," said Mayor Craig Johnson.

      Data center company T5 will occupy one of the newly-constructed buildings at the Elk Grove Technology Park, while Microsoft is set to purchase 36 still-undeveloped acres on the east side of the property. "We have the infrastructure for them. We have electricity, water and fiber optic. Elk Grove is a place to be," said Mayor Craig Johnson. Mark Welsh | Staff Photographer, May 2019

 
 
Updated 1/22/2020 6:51 PM

One of the biggest names in technology is one of two firms planning to open data centers in the Elk Grove Technology Park, village officials confirmed Wednesday.

Redmond, Washington-based Microsoft Corp. recently closed on a $52.2 million purchase of more than 36 acres in the 85-acre tech park site, according to real estate transfer documents released under the Freedom of Information Act.

                                                                                                                                                                                                                       
 

That deal was coupled with Atlanta-based T5 Data Centers' $29 million purchase of a 164,000-square-foot data center shell that's already been constructed at the park, documents show.

The properties are being sold by Brennan Investment Group, the Rosemont-based developer that's already completed four industrial buildings since breaking ground on the massive $1 billion development in 2018.

Elk Grove Village officials for months have hinted that a big announcement was to come about data centers at the sprawling property, which includes the former Busse family farm and is roughly bounded by Higgins Road, Lively Boulevard, Oakton Street and Stanley Street. Brennan also said it was putting a special emphasis on luring data centers.

In anticipation of the planned development, ComEd last October broke ground on a new substation just blocks away.

The utility company is considering installing another substation in the southeast corner of the tech park to handle extra capacity, said Mayor Craig Johnson.

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As part of the deals that closed last week, Microsoft paid $1,000 for that three-acre parcel, once home to an Elk Grove fire station. The village previously sold the site to Brennan.

Already, Elk Grove is home to about a dozen data centers -- one of the largest concentrations in the country.

"We've been aware of this type of use coming for some time, and so was ComEd," Johnson said. "It's great for these companies coming to Elk Grove because it's a perfect location for them."

Brennan and Microsoft officials didn't respond to requests for comment about the extent of their building plans, which would take up much of the remaining developable space in the tech park. It's also unknown how many jobs would be created.

Already, though, the land purchases have meant about $365,000 combined for local, state and county coffers as a result of the property transfers. Johnson said the village would stand to benefit "very well" with taxes and fees on electricity and water the businesses are sure to use.

                                                                                                                                                                                                                       
 

Of the four buildings that have been constructed on the west side of the park, T5 will occupy the one facing Oakton Street.

In a news release, company officials pointed to low-cost power, robust network infrastructure, and support from village officials that made their new building an ideal location to serve enterprise and hyperscale cloud computing companies. They also credited a state data center tax incentive approved in a $45 billion capital bill last year.

The company already operates three data centers in the Chicago area.

The land deals revealed this week follow a leasing agreement Brennan inked last summer with Broetje-Automation, a German aerospace manufacturing firm. The manufacturer plans to occupy 43,200 square feet of the building just north of T5.

Plans were also announced last summer for a 4-story, 85-room hotel in the northwest corner of the site that's envisioned as a venue for business clients, vendors and visitors.

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