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Capabilities / Data Centers

Data Centers

Crucial to the modern digital economy.

Data centers form the backbone of digital services across industries. Our multidisciplinary team provides comprehensive legal solutions to all facets of data center financing, development, and operations.

The last few decades have seen data centers move from the back room to a central component of business infrastructure. That move has brought with it a rise of business and legal challenges, from land acquisition and permitting to corporate transactions involving data center assets, leasing, contracts and licensing, and tax incentives.

Husch Blackwell’s team has a long track record providing data center legal services, assisting clients across the finish line on large infrastructure projects and tackling all the issues such projects entail. We routinely serve as legal counsel on large, high-profile projects and have represented all key stakeholders over time, including project owners, investors, corporate end-users, state and local governments, and contractors. This experience has provided our team with a comprehensive understanding of how and when project risks emerge—whether they are regulatory, political, financial, or operational—and the legal strategies needed to achieve client goals.

Leasing

We routinely work on data center lease agreements for both owners and corporate end-users and are conversant with the many evolving user requirements. Our team works with clients to address key points in the drafting and negotiation of leases, including escalation clauses, variable terms and termination clauses, maintenance and operations, service-level standards and agreements, security, and dispute resolution, among other areas.

Real Estate and Land Use

Our team is backed by a national Real Estate practice that provides a full suite of related services to clients, including land acquisition, land use and zoning, permitting, and environmental. Our team has forged deep relationships at the local and state level across our nationwide footprint, and we guide clients through both early-stage development of projects and the ongoing management of risks related to real estate. As projects progress to the design/build stage, our team represents both project owners and contractors in the various design and construction agreements at play.

Contracts and Licenses

At the heart of all data center operations is a stack of complex, interlocking contracts, agreements, and licenses. Our team is adept at grasping the actual and implied interrelationships these contracts set forth and assisting clients in both negotiating contracts and enforcing contract terms. Our team handles leases, use licenses, colocation agreements, hosting agreements, outsourcing agreements, fiber access agreements, fiber ring agreements, and Indefeasible Rights of Use Agreements (IRU), and power purchase agreements (PPAs), among others. We also counsel clients on vendor contracts related to data security services.

Project Finance

Clients rely on our Finance team to provide advice at all phases of data center development and operation. We counsel both lender and borrower clients in connection with traditional financing vehicles—including construction loans, terms loans, revolvers, and mezzanine debt—as well as finance in conjunction with public-private partnership agreements (P3s) and hybrid P3 procurements.

Tax Incentives

Husch Blackwell’s Development Incentives & Tax Credits team guides clients in accessing federal, state, and local incentives to help fund data center projects, among other classes of infrastructure development. Our early and ongoing leadership in the complex field of development incentives translates into a wealth of experience that benefits clients on a nationwide basis.

Our guidance to clients on development incentives includes:

  • Brownfield tax credits
  • Community improvement districts (CID)
  • Historic tax credits (HTC)
  • New Markets Tax Credits (NMTC)
  • Tax abatement
  • Tax increment financing (TIF)
  • Transportation development districts (TDD)

Our team is particularly adept at identifying multiple incentives for eligible projects, as well as providing comprehensive legal advice regarding the debt and equity components of a project’s capital stack. Our team has decades of experience assisting clients with the formation of special business districts to make deals happen. Our leadership in this often-complex area includes special taxing districts such as Community Improvement Districts (CIDs), Transportation Development Districts (TDDs) and Tax Increment Financing (TIF), as well as the full range of federal and state tax credits.

Corporate Transactions

Our team serves as lead transaction counsel on data center transactions, including acquisition, and disposition, joint ventures, and sale/leaseback transactions. We also counsel clients in connection with foreign investment in U.S. data centers. Additionally, we provide due diligence across multiple areas of concern, including environmental, data security, and supply-chain risk.

Case Study
Microsoft Corporation

Our team assisted Microsoft in the construction of a $1 billion data center on a 315-acre parcel of land in Wisconsin.

Case Study
Netrality Properties, LP

Our team ensured the issuance of $56 million in bonds for the development and renovation of an important client site.

Representative Experience

  • Assisted Crusoe Energy Systems in reaching financial close in the second phase of a $15B joint venture with Blue Owl Capital and Primary Digital Infrastructure to fund the 1.2-gigawatt AI data center in Abilene, Texas.
  • Represented client in the development of a high-end, waterless-cooled, 26MW, approximately 125,000 SF data center on 50+ acres in Kansas City located within a levee protected area. While the intent had been to secure permits without assistance of local counsel, difficulties arose due to the authorities of the Levee District and its interaction with the City. Husch Blackwell was then brought in to coordinate with the Levee District and facilitate the approval process. We secured the necessary approval of the Levee District and the development plan and preliminary plat, which includes land use and public approvals, from the City of Kansas City. The company guarantees “net zero digital infrastructure,” and its data center has a PUE of 1.15 even in the “hottest climates.”
  • Represented client in the development of an $8.2 billion multifacility data center and technology campus. Handled land use and public approvals as well as negotiated incentives package.
  • Represent client in the development of a data center located near existing solar energy generating facilities.
  • Represent client in data center transaction for existing operating wind project.
  • Represented renewable generator on regulatory matters related to interconnecting 200 MW data center retail loads co-located at its wind generation resource in ERCOT.
  • Represented client in the redevelopment of a building for a high-speed data center for companies that rely on high-speed data transmission. Worked with the state and city to successfully requalify the site for public financing.
  • Representing data center developer on regulatory matters related to interconnecting more than 2 GW of retail load co-located at existing and new solar and wind generating facilities in ERCOT.
  • Represented a renewable energy and data center developer in the joint venture and funding of a hyperscale data center in Remington, Virginia.
  • Representing developer to interconnect 1.8GW of new renewable generation co-located with 1.8GW of new data center load in electric cooperative service area in ERCOT.
  • Representing client on regulatory matters related to development of new 1.2 GW gas-fired generation resource interconnecting with co-located 1.2 GW data center load in ERCOT.
  • Advise clients regarding FERC regulatory issues in connection with development of structural plans for co-location of data centers with existing resources in MISO and SPP.
  • Advise on RTO/ISO interconnection rules for large loads and co-located loads with existing generation.
  • Advise on Public Utility Holding Company Act requirements for maintaining Exempt Wholesale Generator (EWG) status in connection with large loads co-located with existing EWGs.
  • Advise on Federal Power Act Section 203 requirements for entering into shared facilities agreements.
  • Represent clients in FERC proceedings regarding co-location policy development and assist with formal comments and speaker presentations.
  • Advise clients on generator interconnection agreement (GIA) amendments needed to accommodate co-location of new load at existing generation sites and potential filing requirements for amended GIAs.