Microsoft Plans Cloud Data Center Campus Near Atlanta

Microsoft is finalizing plans for a data center campus near Atlanta, according to local economic development officials, who this week authorized a $420 million bond resolution to support land acquisition and construction for the project. The company is reportedly scouting sites for a second identical campus in the Greater Atlanta market.

The potential arrival of a Microsoft cloud campus builds on a strong 2020 for Atlanta, which is emerging as a destination for the hyperscale operators, who build digital infrastructure to support the growth of cloud computing and online commerce.

On Tuesday the Development Authority of Fulton County (DAFC) passed a tax incentive package for a Microsoft data center project at a site in Palmetto, saying it has a lease with the company. The site is about 15 miles south of Hartsfield-Jackson Airport, and the description aligns with a 1,500 acre property that is being marketed for data center use, located just off Route 85 in an area featuring business parks, warehouses and logistics operations.

The development authority has used the codename “Project Fulton” for the project. At its meeting Tuesday, the DAFC for the first time identified Microsoft as the data center operator, which was noted by local media and described in the bond resolution document. The project is expected to create 300 to 1,000 temporary construction jobs, and 20 to 50 permanent positions.

Citing a projected economic impact of $643 million over 10 years, the DAFC authorized a $420 million bond, which would be used to acquire land and a building to be leased by Microsoft for Project Fulton I. The deal offers $14 million in property tax reductions over 10 years, which the authority says would be more than offset by the other economic benefits of the data center.

The authority also authorized a second $420 million bond resolution that can be used for Project Fulton II, as Microsoft is considering sites in South Fulton County.

“Project Fulton is a highly competitive project that is considering sites across the metro area and the State of Georgia to locale a large, company-owned data center,” the authority said. “Fulton County is one of several jurisdictions under consideration, and the company is specifically interested in the South Fulton Region.”

More Good News for the Atlanta Market

Atlanta has been a hot market for data center development in recent years, seeing new projects from providers targeting the enterprise market, as well as a healthy stream of sale-leaseback transactions. Data center leasing has accelerated in 2020, with both QTS Data Centers and Switch reporting major leasing successes in the third quarter.

Atlanta had 7.8 megawatts of data center absorption in the first half of 2020, according to data from CBRE. The real estate and research firm says Atlanta is the seventh-largest market in the U.S. with about 151 megawatts (MWs) of inventory, trailing Northern Virginia, Dallas, Silicon Valley, Chicago, Phoenix and just behind the New York/New Jersey region.

Facebook said in September that it will invest $1 billion to add three huge data center buildings to its campus in Newton County. The construction project will add 1.5 million square feet of capacity to the campus, which broke ground and is scheduled to open its first phase this year.

Switch said this week that it will begin work on the second and third buildings on its Atlanta campus, known as The Keep. When the second building comes online in 2022, it will add 50 megawatts (MW) of new capacity, with the next building expected to open the following year, adding another 35 MW of capacity.

“By locating in the tax competitive environment like Georgia, Switch is clearly growing technology infrastructure capability in the region,” said Switch EVP of Strategy Adam Kramer.