Former Sun-Times plant sold for $18M, will host data centers

Written By BY SANDRA GUY Staff Reporter Posted: 07/23/2014, 04:36am

One of the country’s fastest-growing data-center operators will announce Wednesday it has bought the shuttered Chicago Sun-Times printing plant on the Southwest Side and will pour more than $200 million into developing and expanding it to house multiple companies’ computers.

QTS Realty Trust Inc., a real estate investment trust based in Overland Park, Kansas, paid $18 million for the empty plant and its surrounding 30 acres at 2800 S. Ashland Ave.

The building closed in 2011. The purchase is being financed through a revolving line of credit.

QTS closed on the purchase of the 317,000-square-foot building in early July, and it foresees the site eventually hosting more than 200 companies’ computer needs, said Chad Williams, company founder, CEO and chairman.

The expanded 400,000-square-foot data center — a cavernous, temperature-controlled, fortress-secured building that houses Web servers, network services and storage equipment — is expected to open in early 2016.

Williams said QTS could further expand the data center in the future.

The data center will employ about 80 full-time and 30 contract employees.

The 80 employees will include security, operations and technology services personnel, Williams said.

The company will invest more than $200 million on the initial buildout, which will create 200 to 300 construction jobs.

Williams said QTS also will donate to local nonprofit groups and encourages its employees to get involved in the community.

QTS has applied for a lower property-tax assessment valued at $7 million over 12 years, which the City Council would have to approve. The project will be introduced to the City Council on July 30.

Williams described the site as being a scarce resource because other Chicago data centers are full. The property has an enviable combination of land, building, campus environment and access to “tremendous” infrastructure, power and fiber supplies, he said.

A previous deal to sell the site for $20 million fell through last year. Williams said it took his company less than six months to buy the property after learning of the previous contract pullout.

When the previous data-center developers emerged, Chicago’s City Council passed an ordinance allowing the property’s owners to sell the plant without being required to pay back about $7.5 million in tax-increment financing money used to build the $100 million-plus facility in 1998. The TIF was created solely to build the Sun-Times plant, no longer exists and does not apply to the new project.

Media reports say QTS, which operates 12 data centers in eight states, including two of the world’s largest in Atlanta, Ga., and Richmond, Va., aims to grow quickly to leverage its expertise in serving customers who need small or large spaces and who depend on mission-critical security, cloud and managed services.

QTS’ first-quarter revenues, reported on April 30, totaled $48.9 million. Its 2013 fiscal year revenues totaled $178 million.


Twitter: @sandraguy

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