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UPDATE: Tech firm triggering $10M data center downtown

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A Michigan company plans to open a $10 million, 25-employee data center in downtown Indianapolis, the firm announced Wednesday.

Online Tech LLC has acquired and plans to renovate a 44,000-square-foot building at 505 W. Merrill St., just west of Lucas Oil Stadium. The building previously belonged to the Midwest Independent System Operator, which manages the power grid for much of the Midwest. MISO used the building as a backup data center, a spokeswoman said.

About half of the $10 million investment covered the building purchase, and the remainder will go toward renovations, said Online Tech co-CEO Mike Klein. The company expects construction to finish by this fall.

Before then, 60-employee Online Tech will hire for information technology, sales and administrative positions. Most jobs will pay between $60,000 and $100,000 per year, Klein said.

Health care and software firms, especially ones in health IT, provide the most business for Ann Arbor, Mich.-based Online Tech. Downtown’s hospitals and tech firms made the area ideal for Online Tech, Klein said.

Indianapolis will serve as a launch pad for larger ambitions to expand in the Great Lakes states.

The Merrill Street facility will be Online Tech’s fifth total, and its first outside its home state.

The firm plans to stay within the Midwest for the near term because of a “void” it sees in data-center services, Klein said.

“You go to the West Coast or the East Coast, even in Chicago, it’s a pretty busy marketplace,” he said. “There’s not a lot in secondary markets.”
                                                       
Online Tech joins a handful of similar companies with data centers in the Indianapolis area. LightBound, Lifeline Data Centers, Bluelock and Expedient (formerly nFrame), among others, all have opened facilities or expanded in recent years.

 

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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