Will Amazon Help Transform Central Ohio into a Tech, Cloud Computing Hub?

Although officials remain hush-hush on the matter, activity in the state points to something big afoot.

by Steve Wartenberg, The Columbus Dispatch / May 13, 2015

(TNS) -- One of the worst-kept secrets in central Ohio is that an Amazon subsidiary is building massive data centers in Hilliard and Dublin, and a third in either Orange Township or New Albany, that could help transform the region into a major technology and cloud-computing center.

The Ohio Tax Credit Authority approved $81 million in tax incentives at a public meeting last August to lure Amazon, which has said it will invest $1.1 billion and create 120 jobs with an average salary of $80,000.

Two months later, Gov. John Kasich told a crowd in Powell that the project was a done deal and Amazon was “making a billion-dollar investment in cloud computing.”

In the ensuing months, Amazon has received financial inducements from Hilliard and Dublin, and construction has begun at the Hilliard site on Hayden Run Road. New Albany City Council is expected to approve incentives at its meeting tonight, and Orange Township trustees are scheduled to vote on a zoning change on May 20 that could pave the way for Amazon.

Despite all these public events, nobody is talking.

“We are not discussing anything on this topic,” said Amazon spokeswoman Mary Camarata in an email.

“We have nothing to say,” said Kasich spokesman Rob Nichols in an email.

Local officials also say they can’t talk specifics of the project.

“We signed a confidentiality agreement and can’t say what the governor already said,” said Tim Hansley, Delaware County administrator.

However, he did say Amazon will select either Orange Township or a different third site, such as New Albany.

“They’ve always said they want three sites for redundancy purposes, and if they don’t go here (in Orange Township), they’ll go somewhere else in the region,” Hansley said.

Why all the secrecy?

The answer is simple: cybersecurity.

“Amazon is a very cybersecurity-oriented organization, and they don’t like to talk about anything until after the fact — and even after the fact they are extraordinarily security-conscious, which they should be,” said John Sydnor, senior vice president of Rev1 Ventures, a Columbus technology business incubator.

Bottom line: The company has billions of bits of data about its individual and corporate customers that cyberhackers around the world would love to steal.

“Our economy these days is all about data,” said Phil Rist, one of the founders of Prosper Business Development Corp., a local data-analytics company.

“Our company uses Amazon Web Services for several of our applications, so we’re very happy they take these extra precautions,” he said.

Amazon Web Services, an Amazon unit, provides cloud computing, applications and other services to corporate customers.

A new Amazon venture will join a growing list of similar endeavors in central Ohio.

The Columbus Collaboratory was formed in February 2014 by Nationwide, Cardinal Health, L Brands, Huntington Bank, Battelle, American Electric Power and OhioHealth to help analyze data and combat cyberthreats.

IBM opened a major “big data” operation in 2012 at Tuttle Crossing, and Cardinal Health opened a technology center this year in Dublin. Expedient Data Centers recently said it will build a $52 million data center in Dublin, and Compass Data Centers will build five data centers in New Albany.

Amazon is a huge player in the growing field of cloud computing, which is the delivery of on-demand computing services such as servers, storage and applications on a pay-for-use basis to companies and individuals. It also constitutes a

$5 billion business that is still growing fast, according to a recent statement by Amazon founder Jeffrey Bezos.

“Our lives are in the clouds now,” Sydnor said. “Amazon Web Services is a huge player, and them coming here will change the entrepreneurial landscape.”

Hilliard’s incentive package to Amazon includes a 15-year, 100 percent real-estate tax abatement valued at $5.4 million, plus wage-tax rebates and the waiving of permit fees that total $200,000.

Dublin has approved plans for Amazon to build on 68 acres at the southeast corner of Rt. 161 and Houchard Road but has yet to issue a building permit. The city has offered Amazon land valued at $6.8 million and performance incentives valued at $500,000 over 10 years.

Orange Township officials have yet to approve the zoning necessary for five buildings at the southwest corner of Home Road and Rt. 23. Delaware County has offered Amazon a 15-year, 100 percent property-tax abatement, said Teri Morgan, spokeswoman for the county.

New Albany is also offering a 15-year, 100 percent property tax abatement. The 68-acre site is located in the city’s International Beauty Park.

All of the activity points to something big afoot, even if very little is being said.

©2015 The Columbus Dispatch (Columbus, Ohio) Distributed by Tribune Content Agency, LLC.