Colorado Springs

Next Emerging Data Center Market

Data Centers •  Location •  Business Climate •  Workforce Development Program •  Taxes / Incentives •  Utilities •  Existing Data Centers

Common criteria used in data center site selection: •  Risk of natural or man-made disasters •  Local business climate •  Cost of Power •  Proximity to telecom providers •  Skilled employee base •  Resiliency of design/construction of data center •  Efficiency of data center

Site Selection Criteria

Why the National IT Industry Values Colorado Springs: •  Not susceptible to either natural (tornados, hurricanes, earthquakes) or man made disasters •  Removed from any potential terrorist targets (political, military) •  Proven and mature data center market •  Colorado Springs Utilities offers some of the lowest utility rates in the nation •  Utility infrastructure is protected underground and reliable (power and IT) •  Significant network presence from all major telecom providers •  Cool, dry environment is very favorable for cooling facility

City and Site Advantages

Denver

Over 3.3 Million people live within 1 hour of Colorado Springs.

Pueblo

Cripple Creek

Canon City

Woodland Park

Colorado Springs

Monument

50 75

25

Source: CACI International, 02/11

2010 Census Forecast Population, Total Population, 20-64 years 20 - 44 years 45 – 64 years Households Median Age Per Capita Income Median Household Income

45 Min 1,140,339

696,745 393,841 302,904 416,846

35.5 $31,899 $66,655

30 Min 629,411 388,395 225,336 163,059 234,949

34.5 $27,936 $61,915

1 Hour 3,326,501 2,073,100 1,189,540

883,560 1,279,625

36.0 $31,694 $64,801

75 Mile Population Chart

Quality of Life •  Mountain resort quality of life •  Vibrant arts & culture community •  Denver sports, arts & culture nearby •  Two hours to major ski resorts •  Delightful sunny and dry climate •  Diverse sporting activities •  Vibrant downtown •  Easy come, easy go airport •  Major visitor attractions

United States

LA 3 Hours

3 Hours

Las Vegas 2 Hours

San Francisco

Minneapolis 2 Hours

Chicago 3 Hours

Atlanta Phoenix 2 Hours 3 Hours

2.5 Hrs

2 Hours Dallas

Houston

6 Hours Washington DC

COLORADO

Airlines: Allegiant American Continental Delta Skywest/United

Salt Lake City 2 Hours

Nebraska

Wyoming Utah

New Mexico

Colorado

I-70

I-25

Colorado Springs

Kansas

Aspen Breckenridge

Vail Denver

1 Hour

Volcano Risk OTHER EARTHQUAKES

High Risk Medium Risk

Extreme Risk Some Risk

TORNADOES Extreme Risk Some Risk

HURRICANES

Colorado Springs

Natural Disaster Map

Highly Rated Business Climate and Quality of Life

1.  17th Most Secure Place to Live Source: Farmers Insurance Group, December 2011

2.  5th Best State for Business and Careers

Source: Forbes.com, November 2011 3.  5th Great City for Young Adults

Source: Kiplinger, October 2011 4.  4th Best Value City

Source: Kiplinger’s Personal Finance, July 2011 5.  15th Best City for Families

Source: Parenting.com, July 2011 6.  5th Best State for Business

Source: CNBC, June 2011

Business Strengths �  34% of adults have a 4-year college degree �  93% of adults have a high school diploma �  Diverse business base �  Experienced, professional labor maximizes

productivity, reduces costs �  Central U.S. location in the Rocky Mountain Time

Zone �  Extensive telecommunications infrastructure �  Four Technical-scientific military activity centers

Air Force Academy; Schriever & Peterson AFB; NORAD

Workforce Partnership UNIVERSITY OF COLORADO AT

COLORADO SPRINGS Bachelor, Masters, Ph.D. Degrees

PIKES PEAK COMMUNITY COLLEGE

Customized Training COLORADO TECHNICAL UNIVERSITY

Associate, Bachelor, Master, Ph.D. Degrees PIKES PEAK WORKFORCE CENTER

Placement and Training Assistance

Source: Stockman Kast Ryan & Company, January 2011

Corporate Income Tax –  4.63% Rate With Adjustments

–  No “S Corporation” State Tax

–  For apportioning income between states, a single-factor method is used, by which all business income must be apportioned on the basis of the Colorado sales as a percentage of total gross sales.

Source: Stockman Kast Ryan & Company, January 2011

Personal Income Tax

–  4.63% of Federal Taxable Income, with Adjustments

–  Alternative Minimum Tax - 3.47% of AMT Income calculated using Federal rules with appropriate state adjustments

Source: Stockman Kast Ryan & Company, January 2011

Tax Benefits •  No Tax on Inventory

•  No City Tax on Custom Software

•  No State Tax on Computer Software

Connectivity

•  Many fiber carriers and fiber redundancy in the area, due to IT operations and strategic military operations.

· AT&T · Sprint · Verizon · XO · tw Telecom · Level 3 · Windstream · CenturyLink

•  4 Service Municipally Utility

•  Reliable and Low Cost Service

•  75% Buried Utility Lines

•  Multiple Rate Options

•  Fixed Price Options

•  Large Power & Light Rate (approximately 4.5 cents per kWh) for qualified large customers – 4MW demand and high load factor

•  Operates on 4 (9)’s of Reliability

Colorado Springs Utilities

Colorado Springs Electric Rates Rate Class Average rate per kWh* Industrial Service - Time of Day – $ 0.0675 1,000 kWh/day minimum Industrial Service - Time of Day – $ 0.05319 500 kW minimum Industrial Service - Time of Day – $ 0.05314 4,000 kW minimum Industrial Service - Large Power & Light – $ 0.04487 (at least 4 MW demand) *Based on bill for a typical customer for each rate class. Actual rate will vary depending on customer’s consumption and demand patterns.

Colorado Springs Utilities

RENEWABLE ENERGY •  Colorado Springs Utilities supports the use of renewable

energy to reduce the demand of fossil fuels for energy production and produce cleaner energy.

•  Fuel mix: 45% coal, 45% oil/natural gas and 10% hydro.

•  The Colorado Springs climate allows for over 8,000+ hours of free cooling per year (92%). When operating within ASHRADE2008 TC 9.9 recommendations, free and pre-cooling is 7,100 hours / 8,760 hours = 81%.

Colorado Springs Utilities

Power: Cost Effective

Source: Weatherbase (www.weatherbase.com), Data from 1991 - 2009, 10/10

30 Year Average

MSA Climate Facts

•  Average Annual Precipitation 17.5 Inches •  Average High Temperature

–  July 85 Degrees –  January 41 Degrees

•  Average days of Sunshine* 250 days (Clear Skies)

•  Average Days of Sunshine 300 days (Including Partly Cloudy)

Data Center Operating Cost Comparison

$0.00 $1,000,000.00 $2,000,000.00 $3,000,000.00 $4,000,000.00 $5,000,000.00 $6,000,000.00 $7,000,000.00

Austin

Phoenix

Cheyenne

Omaha

Denver

Colorado  Springs

Data provided by

State of Colorado COLORADO FIRST TRAINING PROGRAM •  Job Training Grant for permanent, full-time positions; •  Up to $800 per employee based on fund availability and qualifying

JOB GROWTH INCENTIVE TAX CREDIT PROGRAM A state income tax credit to businesses with job creation projects. •  Minimum of 20 net new jobs created; •  Tax credit up to 50% of FICA paid by the company over 5 years; •  Average wage at least 110% of average county wage ($43,000); •  Approval PRIOR to announcement of decision

City of Colorado Springs RAPID RESPONSE TEAM •  Expedited development plan review and permitting.

•  Reduce by about half the typical approval process time.

•  One contact for centralized responses.

BUSINESS PERSONAL PROPERTY TAX CREDIT Primary employers, defined as those companies that sell 50 percent

or more of their business’ goods or services outside of El Paso County, may be eligible for a credit of up to 50% of personal property taxes on city personal property tax liabilities for up to four years with opportunity for a six year extension. Credits on Large Personal Property Investment (4 years)

City - 50% credit - above $1 million - 90% credit - above $5 million

County - 100% credit

Negotiated with the City of Colorado Springs, based on results of an economic impact analysis.

El Paso County EL PASO COUNTY ENTERPRISE ZONE STATE INCOME TAX CREDITS

•  3% Investment Tax Credit •  Job Tax Credit ($500 / per new employee) •  Employer-Sponsored Health Insurance ($200 / per new employee for 1st 2 years in zone) •  3% R & D Tax Credit •  10% Job Training Credit

*If you have existing facilities in Colorado, these tax credits can be very beneficial

Colorado Springs Data Centers EXISTING or PLANNED DATA CENTERS

Agilent Technologies, Inc.

FedEx Services Corporation

Hewlett Packard

LSI

Progressive Insurance

Quantum

Verizon Wireless

Walmart (under construction)

83 Black Forest

Woodmen Rd.

Research Parkway

Manitou Springs

Garden of The Gods Road

85 87

Sky Sox Stadium

Mar

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ffel

94

Pow

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94

Aca

dem

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25

24

Drennan Road

COLORADO SPRINGS AIRPORT

Drennan Road

Academy Blvd.

Broadmoor

Pow

ers

25

Fort Carson Cheyenne Mountain

Pueblo 38 miles

Fountain

25

25 Air Force Academy

Denver Metro 70 miles

Woodmen Road

Agilent Technologies Inc.

Progressive Insurance Company

Hewlett Packard

LSI

FedEx Services Corporation

Walmart Planned Data Center

Verizon Wireless

Quantum

More Information Everett Thompson

CEO Wired Real Estate Group

info@wiredre.com

David L. White Executive Vice President, Marketing

Colorado Springs Regional Economic Development Corporation dlwhite@csedc.org

719-471-8183