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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.

What is unique is Husch Blackwell’s ability to not only help you with your current needs, but also help you see into the future and what you might need coming down the road without you even prompting them.

General Counsel, Private University