Taxpayer Funding?

Looking for financing for a data center purchase and build-out? Just ask local taxpayers! Sound far-fetched? It really happened last week, when officials in Kansas City committed $44 million to attract MasterCard to establish a data center in the city.

On Nov. 28 the Kansas City Council unanimously approved a $44 million bond offering to help MasterCard locate a disaster recovery backup site in an area building. The funds would be used for the purchase and tenant improvements for a 60,000 square foot facility at 11530 N.W. Ambassador Drive near Kansas City International Airport owned by Ameritrade.

The new site would support MasterCard's new, $140 million disaster recovery center in St. Louis. MasterCard is currently mirroring settlement data from St. Louis to a site in Lake Success, N.Y., but the company has been searching for a new location closer to St. Louis.

Back in September, Ameritrade announced that it would sell the Kansas City data center to a "a major U.S. financial services firm" and lease back space from the new owner to continue its operations. It appears that MasterCard, understanding the local appetite for high-tech jobs, reached out to the Kansas City Council.

The resulting bond deal employs Chapter 100 incentives, which would return 50 percent of the new income and property taxes generated by the project in return for a 10-year subsidy. Platte County Economic Development Director Pete Fullerton said the center would generate $3 million in property taxes for the Park Hill School District and more than $1 million for the county annually by 2013.

"This is a facility that was going to get ramped down," Fullerton told the Platte County Sun. "All you have to do is look at your stock portfolio to see that. This caps off a deal that brings a stable, known quantity to a facility that could've ended up as empty as the one next to it."