Skybox to put data center in Pflugerville, investment could reach nearly $550M

Another big facility packed with servers to sprout on metro's north side

Skybox Datacenters is opening a 110,000-square-foot facility in Pflugerville. The data center is expected to create 10 full-time jobs.

By Justin Sayers – Staff Writer, Austin Business Journal
Mar 9, 2022, 2:18pm EST

Another massive data center will rise north of Austin.

Dallas-based Skybox Datacenters LLC plans to open "Skybox Austin 1," a 141,000-square foot, 30-megawatt data center in Pflugerville at the northeast corner of New Meister and Meister lanes that will create up to 10 full-time primary jobs yet yield perhaps about half a billion dollars in investment. Construction is expected to begin on the facility by the end of the year. No targeted opening date was given, although the facility must be constructed by January 2024 to start receiving incentives.

The Pflugerville City Council on March 8 approved an economic development performance agreement between the Pflugerville Community Development Corp. and Austin Data Center 1 LLC, a joint venture between Skybox and Prologis Inc. (NYSE: PLD), a San Francisco-based real estate investor focused on logistics. The incentives agreement was approved by PCDC on Feb. 26.

The 10-year agreement — codenamed Project Charge in city documents — will provide an expansion grant capped at $225,000 annually and not to exceed a total of $1.575 million. The grants are contingent on Skybox constructing the facility prior to January 2024, securing at least one tenant and investing at least $50 million in the facility. But officials noted that capital expenditures, including construction and tenant property in the facility, could reach up to $548 million.

"Skybox is excited to launch our newest data center facility in Pflugerville, which offers innovative, sustainable and adaptable turn-key and powered shell solutions that will benefit our enterprise and hyperscale customers in Austin and across the country," Skybox CEO Rob Morris said in a statement. "The innovative incentives program designed in partnership with the city of Pflugerville offers direct benefits to data center tenants, with no speculative risk from the community, in order to attract the best possible users to deploy their compute at Skybox Austin I.”

Officials said the PCDC grant for Skybox will allow the company to provide tenant reimbursement, rent reduction or tenant improvements in any eligible year that the company meets all requirements. Skybox decides which tenants receive the incentives benefits.

"We look forward to working with Skybox Datacenters and Prologis on this project that is bringing significant investment, infrastructure improvements and a solid tax base for the city of Pflugerville," PCDC Executive Director Amy Madison said in a statement. "This project improves digital infrastructure availability to meet commercial data needs in the entire Austin region."

The development marks another data center headed north of Austin. Round Rock City Council last month approved an incentives agreement for a 300,000-square foot facility by Seattle-based Sabey Data Centers. Switch Inc. (NYSE: SWCH), a Las Vegas-based data center company, is building a 1.5 million-square-foot data center on the campus of Dell Technologies Inc. known as "The Rock."

In his statement, Morris said an "unprecedented volume of new businesses, their employees and investment in the region is creating a new epicenter for technology and innovation" in the Austin area.

This will be the first Austin-area project for Skybox, which says it builds both speculative and build-to-suit projects. It has other sites in Dallas, Houston, Chicago and Santa Clara, California.

The development marks another large industrial project in Pflugerville, which is located just northeast of Austin and had a population of 65,191 in 2020, up from 46,936 in 2010, according to the U.S. Census Bureau.

Cumberland Additive Inc. early this year announced it is moving into a 36,000-square-foot new headquarters in the Pecan 130 Business Park that will allow it to more than double its headcount. GT Distributors Inc., a distributor of public safety gear and firearms to law enforcement, and MDC Precision, which manufacturers equipment for use in airless vacuums like outer space, announced in 2021 they were expanding or relocating to the city, adding more than 100 jobs.

Skybox Austin 1 marks the second partnership between Skybox and Prologis, which executives said helps deliver "just-in-time capacity for hyperscale, colocation, and enterprise customers."