Colorado-based H5 Data Centers paid $49 million for Yahoo’s 43-acre, eight-data center, 409,000-square-foot complex that anchors the Town of Lockport Industrial Park. Besides the sale price - one of the largest private sector-backed deals in recent Lockport history - the deal guarantees Yahoo’s presence in the region for at least the next five years.
Tom Sy, Town of Lockport economic development point man, explains.
“This entity, H5 data centers purchased all of Yahoo's land and buildings, i.e. real estate. It didn't do anything with the operations of Yahoo itself,” Sy said. “As a part of that arrangement, Yahoo, Yahoo Mail, Yahoo News, etc., signed a long-term lease. So, it's really more of a sale-leaseback kind of arrangement.”
H5, as Sy said, will be the building's real estate but Yahoo will continue to run its data center. That means 140 Yahoo employees will keep their jobs while another 15 people will shift from working for Yahoo to H5
And, as part of the deal, H5 is foregoing tax breaks and incentives previously approved for Yahoo.
“We're pleased because we've maintained such a positive relationship with Yahoo, to have them operating in that facility for at least five more years reinforces our satisfaction with those original pilots and sales tax exemptions,” Sy said.
Sy said he became aware of the deal in early fall. It ramped up just before Thanksgiving with the deal itself closed just after Christmas.
Any concerns about the center closing were addressed and then solidified with the new five-year lease extension, which comes with renewable options.
“We didn't have that trepidation. I think we have enough ongoing relationships with fairly long-tenured Yahoo folks that we had a good understanding of what the nature of the deal really was,” Sy said.
So for now, all signs point to Yahoo’s long-term future in Lockport.
