'Multiple large' prospects catch eye of data center chief embarking on nine-figure Gallatin investment

_{By Adam Sichko  –  Senior Reporter, Nashville Business Journal}

_{Jun 16, 2023}

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Spencer Mullee is 50 days into his job running a data center company, but almost 25 years into his time in that industry. That experience makes him confident in the plans he inherited to pour hundreds of millions of dollars into Greater Nashville.

Mullee is CEO of Evoque, a data center business owned by Tornoto-based Brookfield Infrastructure Partners (NYSE: BIP), valued at $16 billion on the stock market. One year ago, Dallas-based Evoque stepped in as the senior partner in a joint venture on a 61-acre site in Gallatin, where the shell of one data center stands now and there's room for several more. Just down Gateway Drive is the Meta Platforms Inc. (Nasdaq: META) data center campus — one of the Nashville region's signature economic development deals in the last four years.

Crews will be on-site within 45 days to install equipment in Evoque's first building, which has power capacity of 12 megawatts. What's surprising Mullee is the demand: He's in talks with three companies that each want the full building. He views that interest as a reflection of Nashville's economic growth and national trends.

"Typically, Tier 2 cities don't see multiple 12 megawatt (mw) requirements, and I'm seeing multiple large requirements in the market. That gives us a good path for expansion on that site," Mullee said in an interview.

"You hear how much business is going into the cloud. What people aren't talking about is that a lot of companies have found that the cloud is not the shiny disco ball in the ceiling that they thought it was," Mullee added. "It's expensive, and sometimes hard to manipulate. Many companies are coming to the realization that a hybrid situation is better for their operations. As that happens, people are geographically deciding on these Tier 2 cities because they're more cost-effective."

(For perspective, Mullee said 12mw "would certainly power a small town" of 4,000 to 5,000 homes).

Data center companies can quickly rack up a tab when it comes to construction. It's usually $10 million to $12 million of investment per megawatt; Evoque's initial building lands in the middle of that range, totaling $132 million, Mullee said.

"On this site, we can do 150 megawatts if we want to. It's a wide range, but we're talking $500 million to $1 billion or more, if we have enough customers to fill it," Mullee said.

Data centers typically don't create a lot of jobs: Mullee estimated there may wind up being 25 to 30 people working on-site. In a tight labor market, that may actually work in favor of both Evoque and economic development officials in Gallatin, which is 35 miles northeast of Nashville. The economic benefit to Gallatin will stem more from the property tax revenue that such a project will generate, and Mullee said the jobs will pay "significantly above the average."

Evoque is doing the joint venture project in Gallatin alongside Archer Datacenters, which announced the Gallatin project in 2019.

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