Johan Börje, Stockholm Data Parks, Offers European Perspective on Tax Incentives at NYC Data Center Summit

NEW YORK CITY, NY – Incentives are a big part of the data center game, even if you want to build in a market that doesn’t have any – after all, you still have to worry about other markets. At CapRE’s 7th Annual New York Data Center Summit, a significant portion of the panel Best Practices for Site Selection in Manhattan, Suburban New York, Upstate New York and New Jersey Submarkets: Cost of Land, Cost of Power and Public Sector Incentives honed in on this topic.

For example, Sean Brady, Managing Director at Cushman & Wakefield offered his thoughts when asked the question, how much do you think New Jersey would benefit from tax incentives for data centers?

“One of the things that’s interesting is that I’m working on a building in Chicago. And the state of Illinois is trying to bring in new incentives,” he shared. “They’re seeing a lot of the flow going to Ashburn and some of the other places, where that might be tax incentives or other types of incentives, such as cheaper power. So they’re working on incentives. And I think you’re going to see a lot of different places start to put incentives in. In order to just draw in this business. It’s just a great tax base. Some of the criticisms is that it doesn’t bring as many jobs. But it certainly helps county tax bases and people balance their budgets. So for politicians, it’s just a win.”

Next, Johan Börje, Director of Marketing, Stockholm Data Parks offered a European perspective on incentives. “We have a completely different type of competition pool,” he began. “One should be really careful in Europe to actually engage in incentives, because ultimately the European Commission may come back and say that was illegal. And then you have to pay it back. Because you’re not allowed to give specific incentives – they all have to be general to the economy.”

data center summitAccording to Börje, that triggered the Swedish government and the Swedish parliament in 2017 to reduce the tax on electricity for data centers by 98%. “So our tax on electricity for data centers is $.60 USD per megawatt hour. And that was a way to bring it down to the lowest electricity price within the European Union, actually,” he offered. “Even the Norwegians are part of the EU competition laws, and after Brexit, the UK will be under that regime. Because otherwise they may not be allowed to do business.”

For more from this panel on incentives, check out an earlier CapRE Insider Report: How Much Would New Jersey Benefit From Tax Incentives for Data Centers?

Banner Photos Left: Johan Börje, Director of Marketing, Stockholm Data Parks