The Abridged version:
- One of the country’s largest developers of data centers is proposing construction of a project in an industrial area in southeastern Sacramento.
- The Sacramento Municipal Utility District has been in talks with Link Logistics, a subsidiary of Blackstone Inc., since February, emails show.
- The company is requesting to use power from SMUD, but would eventually require entitlements and approvals from the city of Sacramento.
One of the largest developers of data centers in the nation is eyeing an industrial area in the city of Sacramento for a new data center.
Employees from Link Logistics have been in talks with the Sacramento Municipal Utility District since February this year, according to emails acquired by Abridged by PBS KVIE.
Link Logistics is a warehouse real estate company and is a subsidiary of Blackstone Inc. Blackstone describes itself as the world’s largest owner of commercial real estate and data centers.
The data center is estimated to be a “large load” project over 50 megawatts, according to SMUD, which declined to state the exact size the company is considering building in Sacramento.
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The artificial intelligence boom has been paired with demand for large data centers to process and store data. The Sacramento region has seen interest from businesses grow, in part due to the low energy rates from SMUD, which is a publicly-owned utility.
An update from SMUD’s commercial development team stated that the utility
“received a significant increase in prospective large load inquires, predominantly from data centers due to artificial intelligence.”
Data center planned in southeastern Sacramento
Link Logistics is proposing redeveloping older structures to make way for a new data center, records show. Emails detail that the project would be located in the city’s District 6, which includes much of southeastern Sacramento.
The records obtained by Abridged redacted the company’s name. Employee names and biographical details found in the records show the inquiry was made by Link Logistics.
Representatives from SMUD and Link Logistics declined to comment on the exact location where the data center is proposed.
Emails state that the project would be located in an industrial complex that currently has a “solar farm.” That description is consistent with Depot Park, a large warehouse complex near Fruitridge Road and Florin Perkins Road where Link Logistics owns property.
Councilmember Eric Guerra, who represents the district, declined an interview request on the data center project proposed in his district, with representatives for the councilmember stating that he was sick.
“Data centers are not allowed in the city of Sacramento, I would oppose any project, data center or otherwise, that doesn’t have a direct benefit to our residents and safeguards to the community,” Guerra said in a statement.
Over the last seven months, SMUD has worked closely with the company on possible funding for electrical grid improvements for the site and received $250,000 from the company for a feasibility study.
SMUD declined to answer multiple questions about the proposed data center, including how it could affect energy rates, the size of the proposed data center and its location.
“SMUD has received interest from multiple large electrical load customers, including data centers,” said spokesperson Gamaliel Ortiz, in a statement. “To protect customer privacy as required under the Public Utilities Code, we do not share specifics of potential projects or customers.”
The city of Sacramento would eventually have a final say on approvals for the project. The project would also have to go through the environmental vetting via the California Environmental Quality Act.
The city does not currently have any applications for data centers, according to spokesperson Jennifer Singer. Singer declined to comment on whether the city has received any inquiries or informal proposals for data centers.
Company met with councilmember in April
Employees from Link Logistics have been in communication with Sacramento officials since at least April, emails show.
On April 15, the company met with Guerra “to begin advocating his support for the entitlement process,” public records show.
Before the meeting, an employee requested that a representative from SMUD join the meeting as well.
“Our thought is that if SMUD can relay the message that the upgrades contemplated as part of the project will provide greater resiliency to the surrounding community in addition to other community or grid hardening aspects of the Spark grant application, could help us gain support for our project,” the employee said in an email.
Two staffers at SMUD agreed to join the meeting between the data center company and Guerra.
The two days before the meeting, Link Logistics cut down the number of people at the table meeting with Guerra, in favor of a “more informal” meeting, according to the emails.
The momentum continued after a meeting in mid-May.
On May 27, a Link Logistics employee wrote that their team was “full steam ahead” to arrange investments for the project “based on last week’s positive meeting with Sac officials.”
SMUD quickly assembles $122M grant application
Link Logistics first approached SMUD about its data center plans in late February, emails show.
“I run our data center development team and we’re looking at (redacted) as a potential data center conversion opportunity” a Link Logistics employee wrote on Feb. 25, seeking an introductory meeting with SMUD.
By late March, SMUD staffers were working with the company to write a grant application seeking $122.7 million in federal funding that would boost the project and fund electric grid improvements. The funding would also include $62.6 million in matching funds from the developer.
The application was for a portion of a $1.9 billion pool of funding for electric grid improvements made available through the U.S. Department of Energy.
As they readied to submit the application, a SMUD staffer thanked the Link Logistics employees for their flexibility.
“We’re accomplishing in 6 weeks the type of application that would otherwise take 6 months,” the staffer said.
The funding recipients for the grant have not been announced by the U.S. Department of Energy yet. In a statement, SMUD said that grant funds could help modernize its infrastructure.
“SMUD applied for funding to upgrade grid infrastructure benefiting all customers. Any grant awards will support systemwide reliability and regional growth,” a SMUD spokesperson said in a statement to Abridged.
Largest data center in the region?
A 50-megawatt data center would be the single largest data center in the four-county Sacramento region. That size of data center would be smaller, however, than the sprawling “hyperscale” data centers sized in the 200- to 300-megawatt range seen in Nevada and Texas.
For comparison, much of the Downtown Sacramento grid is powered by a 60-megawatt substation. NTT Data Centers, which has operated in Sacramento since 2000, has three data centers with a total of 52.7 megawatts.
Data center growth has also appeared in the region near McClellan Airport, where the company Prime Data Centers is expanding. Prime Data Centers is currently adding another 18-megawatt data center to McClellan Park, for a data center campus that would total 44 megawatts between two buildings.
As of mid-July, SMUD had four “large load” projects in the pipeline, including one project over 50 megawatts and three over 20 megawatts.
Project backers indicated that they hope for the southeast Sacramento data center to be operational by the beginning of 2029.
