Big banks need big data.
 
On Tuesday, Minneapolis-based U.S. Bancorp unveiled plans for a new, $250 million data center in Chaska. U.S. Bank will lease the property, set for completion in early 2018, from Dallas-based Stream Data Centers, which specializes in developing data facilities for corporate customers.
 
U.S. Bank spokesman Dana Ripley said that as part of its standard due diligence process, the bank considered sites in other states before settling on the Chaska location.
 
The bank has been studying its data center needs for about 18 months, said Jeff von Gillern, vice chairman of technology and operations services. The Chaska project offers an upgrade from a separate, aging local facility and provides the bank the ability to handle more information as it grows. In the age of hacking, the security of customer information is paramount for financial institutions.
 
“These facilities support the whole bank,” said von Gillern. “We’ll have the capacity to expand.”
 
U.S. Bank is the nation’s fifth largest commercial bank and reported revenue of $20.3 billion for 2015. The company operates in 25 states; its payment processing business also has a large presence in Europe. TCB recently named U.S. Bank chairman and CEO Richard Davis as its 2016 Person of the Year.
 
Data centers typically do not require a large staff to operate. Ultimately, 18 full-time, permanent employees will work at the 56,000-square-foot facility in Chaska.
 
In recent years, the suburb has drawn several data center projects. The U.S. Bank project is adjacent to another facility previously developed by Stream Data Centers.
 
“UHG [UnitedHealth Group] has a really large data center across the street, too,” says Kevin Ringwald, Chaska’s community development director. He added that Colorado-based ViaWest also built a data center in Chaska, which opened in 2014.
 
Ringwald said that the city, which has ample available land, has been actively courting data center projects.
 
“We have a really great electrical system. We have our own electric utility. We have power that’s reliable…and we have a lot of fiber optic,” said Ringwald.
 
The project includes several public financial incentives: The Minnesota Department of Employment and Economic Development will provide a grant of $287,000 from its Job Creation Fund and a separate $250,000 grant towards infrastructure improvements from the agency’s Innovative Business Development Public Infrastructure Program.
 
The city of Chaska approved a tax abatement that is valued at approximately $548,000 over 20 years. U.S. Bank will also be eligible for incentives under a state program approved in 2011 to exempt sales tax on technology equipment and software for qualifying data center projects.
 
Ripley said that project incentives were a consideration for U.S. Bank.
 
“It was certainly a factor,” said Ripley. “This is a big investment for U.S. Bank.”
 
The new Chaska project for U.S. Bank continues a boomlet of data center development in Minnesota. According to DEED, the Twin Cities ranks eighth in the U.S. for the size of its data processing workforce.
 
DEED reports that 26 new or refurbished data center projects have been completed in Minnesota since 2012. The projects represent approximately $2 billion of capital investment.