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Switch plans $1 billion Las Vegas expansion

Las Vegas-based computing giant Switch Communications is about to get a lot bigger.

Company blueprints to build a $1 billion, 3 million square-foot data center near Reno made a splash as part of Gov. Brian Sandoval’s State of the State speech on Thursday, part of an expansion the governor said will make Nevada “the most digitally connected state in the nation.”

Perhaps less heralded was Switch’s equally sizable re-investment in its hometown, where a new $1 billion data storage site is set to get underway on 200 acres near the company’s two existing data storage facilities at South Jones Boulevard and the 215 Beltway.

Switch hopes to make room for an additional 1 million square feet of storage hardware through its latest Southern Nevada expansion.

The company operates two data center facilities in Las Vegas, providing security, power and cooling for stacks of thousands of servers owned by more than 1,000 clients that include eBay, Xerox, Zappos, Amazon, DreamWorks, Shutterfly and the U.S. government, The Associated Press reported.

The company’s original facility, a massive 400,000 square-foot warehouse near Henderson, already houses thousands of such servers, cooled by a proprietary temperature control system and policed round-the-clock by an army of in-house security guards.

Switch hasn’t released a headcount of employees to be added as part of its expansion plans. The company on Friday did not immediately return requests for comment.

A statement released by the company on Friday highlights a 500-mile “superloop” of fiber optic cable meant to connect its Reno and Las Vegas storage sites, called “supernaps,” with a pair of planned facilities in Los Angeles and San Francisco.

The idea, according to company founder and CEO Rob Roy, is to link each of the Switch’s more than 1,000 clients in the same fiberoptic ring or putting some 50 million people within 14 milliseconds of data hosted at each of the company’s major data hubs. Sending bits of data in-state would take only half that amount of time.

Switch expects its “superloop” to take five to 10 years but expects part of its Reno facility will be open by the second quarter of 2016.

Switch will have to bring 100 jobs to Northern Nevada in order to qualify for taxbreaks similar to those recently handed to electric carmaker Tesla — the company’s soon-to-be neighbor at the Tahoe Reno industrial center east of Reno.

The Northern Nevada data center campus will be built in phases on a 1,000-acre site — about the same acreage for Tesla Motors’ gigafactory site — at the Tahoe Reno Industrial Center just east of Reno. Switch expects the overall project to take five to 10 years but its first facility should be open by the second quarter of 2016, said Adam Kramer, vice president of government and public affairs for the company.

Kramer did not give an employee headcount and average salary for the Northern Nevada site.

He did say that Switch employs 400 people at its Southern Nevada data center, which will expand from its current 2 million square feet to 3.5 million square feet. The Las Vegas operation also has an additional 5,000 people who work on the site for Switch’s clients.

“We expect quite a few of our more than 1,000 clients in Las Vegas to join us here in (the Reno area),” Kramer said. “With Switch coming to Reno and the technology infrastructure we’re bringing, we also anticipate bringing new clients and more technology companies who want to do business in Nevada.”

Northern Nevada was named a finalist for Switch’s “supernap” project alongside Phoenix last October. To help woo the company into picking Northern Nevada, the state offered incentives that share similarities with the deal that brought Apple’s data center to the region — but with some changes, said Steve Hill, director of the Governor’s Office of Economic Development.

The deal involves a reduction of sales tax to 2 percent as well as a 75 percent reduction in personal property taxes for 15 years. The exact value of that abatement is still unknown.

“The incentive package still has to go through the county and our board,” Hill said. “We’ll be using the same statute we used in the Apple (data center) project, which was actually narrowed by the Legislature during the 2013 session.”

Reno Gazette-Journal writer Jason Hidalgo contributed to this report. Contact James DeHaven at jdehaven@reviewjournal.com or 702-477-3839. Find him on Twitter: @JamesDeHaven.

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