Virginia Beach, Emerging World-Class Data Hub

Speaking of Virginia Beach…. Here’s a more promising approach to economic development than building arenas in the hope of wrangling big-name concerts and basketball tourneys for 30 years into the future. Reports the Virginian-Pilot:

A Dutch company wants to create a new data center park to draw the likes of Snapchat, IBM and Uber. NxtVn will spend $1.5 billion to $2 billion to build a hub off General Booth Boulevard to attract companies that seek high-capacity connections from the U.S. to Europe.

The company also plans to invest in a third trans-Atlantic high-speed data cable – Midgardsormen – that would link Virginia Beach to a data center park in Eemshaven, Netherlands.

This news follows an announcement made last year that a consortium including Facebook, Microsoft and Telefonica would build a 4,000-mile trans-Atlantic cable capable of transmitting 160 terabytes of data per second, the first transoceanic fiber cable station linking to the Mid-Atlantic. The existence of these two transoceanic cables, plus a third connecting Brazil and Virginia Beach, could spur development of the city into one of the nation’s largest data-center hubs.

How has Virginia Beach scored this economic-development coup? By handing out subsidies and tax breaks? No, by tending to basics. Writes the Pilot:

Over the past two years, the Virginia Beach Broadband Task Force has laid out steps that appeal to technology-driven companies, including advancements to a high-speed fiber optic network connecting municipal buildings and laying a fiber ring across the city, said Councilman Ben Davenport, chair and founder of the task force.

“We have worked with Dominion Virginia Power to make sure all power requirements could be met at these sites, which is very important because these data centers are huge power users,” said Davenport, who said that when NxtVn was told about the task force’s work on the fiber network, “this sealed the deal.”

There is no mention in the Pilot article of how much it cost to lay that fiber ring across the city. Perhaps the expenditure represents an implicit subsidy for broadband companies like NxtVn. If so, the project certainly appears to be paying off. I’m willing to wager that the Return on Investment is vastly superior to payback from an events arena.

(Hat tip: Paul Yoon)

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3 responses to “Virginia Beach, Emerging World-Class Data Hub”

  1. Steve Haner Avatar
    Steve Haner

    The news about the transatlantic crossings and the potential data centers is excellent, but I’d take that bet on the economic benefit comparison with the arena, especially if the arena turns out to be successful and busy. Nor are they totally unrelated. The arena is the kind of social and cultural amenity that makes companies want to come to an area – along with the availability of the infrastructure they need. I bet it gets mentioned in every economic development pitch from now on….even outside of VB! Since the General Assembly was persuaded to exempt legal tender coins from the retail sales tax I certainly hope to see a major coin show in that new facility in a few years!

  2. Finally. Decent development. Forget the arena’s, the salaries here can’t afford it. We went down this road before.

    Invest in this and in biotech, etc. Then after you get enough $$$$ salaries in, then you can bring in the arena.

  3. LocalGovGuy Avatar

    Great news for Tidewater!

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