Saturday, June 23, 2007

Doing City Council's homework

Since City Council is not doing much comparison shopping, everyone should help them out by examining other alternatives.

On June 1, Stadium Facts highlighted a successful development that was built entirely with private financing, Santana Row.

On June 5, the KMA report pointed out that a hypothetical Class A office project can generate up to 5 times the fiscal benefits, with zero public subsidy.

Here's another possibility.

Have you ever wondered where all the 1's and 0's of the Internet hang out? Those YouTube videos, the latest movie trailers, the satellite maps at Google Earth, your vacation pictures on Flickr -- they all add up to a lot more 1's and 0's than simple emails. All this data is driving up the need for more and more data centers to store the bits and bytes, and to handle the traffic when grandma wants to see the one that got away in Idaho.

According to the SJ Mercury News, data centers are
... a lucrative place to be. While prime office space in downtown San Jose costs about $2 a square foot per month, David Dunn, senior vice president of Los Angeles-based CRG West, said space in a data center rents from $15 to $30 a square foot per month. Even at that price, it took just nine months last year for CRG to fully lease its newly opened 16th-floor data center at Market Post Tower in downtown San Jose.
And the forecast is for more of the same:
"Do we think this is a gamble? Absolutely not. The forecast for the next 24 months shows demand is rising," [CRG vice president Jameson] Agraz said. "Every TV show you watch will be stored on hard drives so you can have video on demand."
Of course, your mileage may vary. But the point is, there is more than one way to invest $297 million. We would be fools if we didn't check out at least some of them.

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