Coresite will no longer seek tax breaks in Denver for new data center

Company planning to build a new data center in north Denver will no longer seek $9 million in tax breaks from the city after the proposed deal raised questions among City Council members over water and energy use.

CoreSite I’ll build it anyway data center in the Elyria-Swansea area — but without entering into a tax refund agreement with the city, company spokeswoman Megan Ruszkowski confirmed in an email Wednesday. The statement left open the possibility that the company would seek city support for future phases of the project.

The Denver company applied for the incentive with the Denver Economic Development and Opportunity (DEDO) office. The company struck a deal in which CoreSite would repay half of all sales and use taxes associated with the new data center, up to $9 million.

“While this will have a significant impact on the project’s finances, CoreSite will continue with the first phase of the project,” Ruszkowski said. “CoreSite believes this will demonstrate both a benefit to the community and a financial/economic benefit to the city.”

DEDO representatives presented a proposal council committee in August And were met with over an hour of questions about the impact of the project on the environment and surrounding society. Council members questioned whether the city should incentivize a project that would use large amounts of water and electricity amid efforts to improve water and energy efficiency in the city.

Once completed, the facility will have a maximum capacity of 65 to 75 megawatts—enough to power about 82,500 homes. The facility will also use a maximum of 805,000 gallons of water per day to cool its systems. That’s the same as the average daily indoor water use of 16,100 Denverites.

However, average daily water and electricity consumption at the site is expected to be well below maximum, company officials previously said. A typical CoreSite data center uses less than 50% of full capacity, and customers never use the facility’s full capacity.

Council members of the Business, Arts, Workforce, Climate and Aviation Services Committee twice delayed voting on the deal, which required full council approval.

CoreSite will now focus on finalizing the site development plan, obtaining a building permit and building the first phase of the project, Ruszkowski said. The company bought the property at 5050 Race St., near the National Western Center, in 2022.