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HSBC picks site for data center Farm field in Cambria selected for new facility

HSBC North America Holdings has selected a farm field in the Town of Cambria as the site for its proposed new $139 million Niagara County data center, which will supplement its existing facility in Amherst.

The planned 275,000-square-foot center will be located on the northeast corner of Lockport and Comstock roads, on Cambria's southern border with Pendleton, according to an application for tax incentives HSBC Technology & Services filed with the Niagara County Industrial Development Agency. HSBC officials confirmed the location on Monday.

The bank is seeking $88.5 million in sales and other tax benefits for the previously announced project, which will ultimately require more than $1.5 billion in technology purchases by HSBC.
The project is backed by regional and state politicians and economic development officials, and was first reported in September. As a result, little, if any, opposition is expected.

"I think it's a great project. It's a great opportunity for the Town of Cambria and Niagara County," IDA Chairman Henry M. Sloma said. "This is the kind of project the agency and the board can support."

The state has already awarded HSBC 11 megawatts of low-cost power per year for the next 15 years, through the New York Power Authority. That's particularly important, bank officials say, as the technology-heavy operation depends on cheap electricity and telecommunications.

And Empire State Development Corp. is providing an $800,000 grant for both data centers.

The new building, designed to be one of four technology hubs for HSBC Holdings Plc's fast-growing North American businesses, will be small on employees, but big on computer spending. It's part of a new, long-term technology commitment by HSBC in Western New York.

Most significantly, the fast-growing bank pledged to spend more than $100 million a year for 15 years -- at least $1.5 billion in all -- to maintain up-to-date technology at both sites. That's $867 million in Amherst and $832.5 million in Cambria.

In addition, HSBC is also paying $27 million to expand and upgrade its 6-year-old data center on Park Club Lane in Amherst. The Amherst Industrial Development Agency already granted nearly $79 million in sales tax breaks for technology purchases.

According to IDA documents, specific plans for Cambria call for a 200,000-square-foot building and a 75,000-square-foot equipment yard, to be built on 51 acres of a 77-acre farm field. HSBC plans to buy the 51 acres and obtain a right of refusal on the rest, and the project is designed to allow for future expansion to 350,000 square feet.

The bank expects to spend $5.93 million to buy and prepare the land, and $66.4 million to construct the building. Another $35 million will go for technology, with another $4.6 million in miscellaneous costs. And HSBC will spend $55.5 million a year for 15 years on technology, for a total investment in Cambria of $944.5 million.

The application calls for the bank to make payments-in-lieu-of-taxes totaling $14.5 million over 15 years, while saving $21.8 million in estimated taxes. It would also save $66.7 million in sales taxes on construction materials and technology equipment, according to documents.

HSBC expects to create 56 permanent jobs at the site, with an annual payroll of $4.3 million, along with about 125 indirect and support jobs with an annual payroll of $5.8 million. The bank also says the project would require about 350 construction jobs over two years, with a payroll of $11.7 million.

News Staff Reporter Thomas J. Prohaska contributed to this report.


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