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Google Makes Nevada Land Grab for Data Center

Google Makes Nevada Land Grab for Data Center

Alphabet unit pays $29.1 million for 1,210 acres a few miles south of Tesla’s battery ‘gigafactory’

By
Jack Nicas in San Francisco and
Jim Carlton in Reno, Nev.
April 17, 2017 8:00 a.m. ET
Tesla Inc.’s “gigafactory” has a big new neighbor: Google.

Google last week bought land stretching across 1,210 acres at a private industrial park east of Reno, Nev., for $29.1 million, according to people familiar with the deal and documents filed late Friday in Storey County, Nev.

The Alphabet Inc. GOOGL +0.00% unit aims eventually to build a data center at the 107,000-acre Tahoe Reno Industrial Center, according to these people. Google, which made the deal through a subsidiary called Silver Slate LLC—created in Delaware in August—has no immediate plans to build, according to a person close to the company.

The vacant desert tract near Electric Avenue is several miles south of the 3,200 acres where Tesla is building its $5 billion battery factory, which could be the world’s biggest building at 10 million square feet when it is completed in the next several years.

Once known for casinos and brothels, Reno is now attracting corporations drawn by its low costs, lenient permitting rules and relative proximity to Silicon Valley. Other big corporations that have recently built data centers, factories and distribution centers at the industrial park include Apple Inc., Wal-Mart Stores Inc. and eBay Inc.

Google is aggressively expanding its network of computers—likely already the biggest in the world—to support its core internet business and its push into selling computing power over the internet, known as cloud computing.


The company believes its cloud business could one day eclipse the advertising business that accounted for 88% of Alphabet’s $90 billion in sales last year. Google and cloud rivals Amazon.com Inc. and Microsoft Corp. are collectively spending billions of dollars each year on data centers, vast warehouses of computer servers.

A Google data center near Reno would likely leverage new fiber-optic connections at the industrial park. Internet-infrastructure company Switch LPD recently connected Silicon Valley, Los Angeles, Las Vegas and the Tahoe Reno Industrial Center with high-speed cable that can deliver data around the loop in less than 14 milliseconds, or thousandths of a second.

Some officials in Reno said rumors of Google’s expansion there have swirled for two years. The deal was cloaked in secrecy, with some officials saying they had been required to sign multiple nondisclosure agreements. “The company that shall remain unnamed” is how one person referred to Google when asked about it. Others around town have called the sale “the megadeal.”

The industrial center has been a big draw. Its top pitchman, Lance Gilman, is a cowboy-hatted real-estate broker and county politician who also owns the World Famous Mustang Ranch—as it is labeled on Google Maps—a legally licensed bordello near the edge of the park.

In 2014, Reno won a multicity competition to become home to Tesla’s battery plant. A year later, Switch said it was spending $1 billion to build the world’s largest data center at the park. Numerous deals like these since 2011 have added more than 30,000 jobs in the metropolitan area, home to about a half million people.

Reno’s slogan goes way back, but only recently has the city become a magnet for tech companies.
 
Google’s expanse of land is so large that it could easily house more than just a data center, which has led to speculation among people connected to the deal that it may eventually be used for driverless-car research or operations. 

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