March 5, 2020
The rise of off-site data centers for the collection, storage and protection of business information is driven largely by greater awareness of the value of data and the risks of loss or theft. For those involved in this fast-growing business, it’s crucial to understand best practices and how to manage risks associated with data centers and collection.
Partner Dale Mullen, who leads McGuireWoods’ data centers team, has represented providers of reliable, critical infrastructure for most of his career. Over the past three decades, that has increasingly included helping private developers of expanding internet infrastructure as they navigate government and regulatory issues in locations best suited for data centers development — especially Virginia, the epicenter of the explosive growth of the data centers business.
Mullen recently answered a few questions about data centers and what businesses need to know to succeed.
What are the ideal conditions for a data center to flourish?
Dale Mullen: To use Virginia as an example, we have seen an explosion of data centers activity in recent years due to three key factors: (1) strong economic incentives, (2) availability of internet infrastructure and (3) proximity to government, the service industry and large workforces. The mid-Atlantic, especially Virginia, is known for its strength developing business and industry. With the proximity to Washington, D.C., it is no wonder developers, operators and businesses that serve data centers are flocking to Old Dominion.
What kind of businesses can benefit from the growth of data centers?
DM: The resulting economic development is of interest to many of our clients, who include developers, investors, data centers, service providers and users across all major industries. The incentives and demand that led to the exponential growth in data centers also has increased the need for power to operate and cool the data systems. Major corporations that utilize data centers are challenging their providers to match their commitment to renewable energy, creating opportunities for the renewable energy industry.
How does McGuireWoods’ data centers team help those businesses?
DM: On the front end, we handle real estate issues relating to site selection, entitlements, land use and permitting necessary for site utilization. These site selection decisions frequently involve a deep understanding of financing options and tax incentives.
However, regulatory compliance remains one of the most important parts of what we do for clients. Educating and advising clients on environmental, health and safety, and the data privacy and data retention requirements of the EU General Data Protection Regulation and the California Consumer Privacy Act — and determining whether our clients’ providers or those of a potential acquisition target are in compliance — are major components of that work.
Renewable energy, sustainability, carbon fuel reduction and environmental compliance concerns always are at the front of regulatory compliance concerns.
Our strong energy history and deep understanding of how to negotiate the challenges and complex agreements necessary to provide power for industrial use make us ideally suited for addressing cutting-edge issues related to environmental concerns and the demand for renewable energy.