Bill to promote data centers in state advances

Connecticut’s House of Representative has approved legislation that would give tax breaks to companies that develop new data centers in the state.

The House voted 133-13 to send the data center legislation to the state Senate, which is expected to take up the measure next week, David Lehman, commisioner of Connecticut’s Department of Economic and Community Development.

“We do think it’s a great industry and is something businesses look at when they consider whther they want to move to our state,” Lehman said Thursday.

Gov.Ned Lamont said the data center legislation, if passed,will encourage increased economic development and to the state.

“Seeing the Connecticut House of Representatives approve this measure in a bipartisan way is exactly what our residents want to see when it comes to our commitment to economic growth and continuing our Connecticut comeback,” Lamont said in a statement. “Data centers are the backbone of the digital age, and with this growing need, we are witnessing a significant period of national growth to build these infrastructures and create the corresponding jobs that support their operations. Connecticut needs to get in the game and bring this industry to our state.”

Under the terms of the legislation, data centers will be required to be located in federally recognized opportunity zones, which will help boost the development of economically distressed areas.

“There is a significant amount of grand list growth for the communities that host these centers,” Lehman said.

At the same time, he said, companies that develop these data centers will avail themselves of savings on sales and use taxes for a period of 20 to 30 years. The length of the period duing which data center developers will not have to pay these taxes depends upon the size of their investments, according to Lehman.

“Companies that invest $200 million or more won’t have to pay these taxes for 20 years,” he said. “Companies that invest $400 million or more won’t have to pay these taxes for 30 years.”

Connecticut has between 5 and 10 data centers that already exist in the state, Lehman said. But the existing centers are largely aging facilities, he said.

A new data center being developed in what was once part of the famed Stanley Works manufacturing center in New Britain is slowly moving closer to becoming a reality, according to William Carroll, the city’s economic development director. The data center is the centerpiece of what is called an engery and innovation park that was first announced in 2019.

“It hit a snag with COVID-19, but it has gotten bck on track,” Carroll said. “We expect demolition work to begin in the next 60 days.”

Full build-out of the Energy and Innovation Park is expected to generate more than 3,000 primary and secondary jobs over a 10-year period, according to officials with the company that is developing the facility.

Officials with EIP LLC were not available Thursday to comment on when construction work on the New Britain data center might start.