CloudHQ, a hyperscale data center developer and operator in the United States and Europe, has been named by the Village of Mount Prospect as the developer of a $2.5bn data center campus at the former United Airlines world headquarters office campus in Mount Prospect, Illinois, a town located ~20 miles northwest of downtown Chicago.

Existing Property Aerial Image

United Airlines World Headquarters Office Campus Aerial Image

Per the Cook County Clerk’s Office, CloudHQ acquired the 49.7-acre site from United Airlines in June 2021. At the site, CloudHQ plans to demolish the existing buildings and adjacent parking lot to redevelop the land into a data center campus with an on-site substation.

Notably, CloudHQ’s project closely follows a similar large-scale data center development from Macquarie’s Prime Data Centers in nearby Elk Grove Village, Illinois.

CloudHQ – Mount Prospect (Chicago) Data Center

According to the Mount Prospect Planning and Zoning Commission, CloudHQ intends to develop three data center buildings, each with 84 megawatts of power capacity and 566.8k sqft of gross floor area. Therefore, the CloudHQ data center campus in Mount Prospect will ultimately span 252 megawatts of power capacity across 1.7 million sqft of gross floor area.

CloudHQ Mount Prospect Technology Campus Data Centers

Location

CloudHQ’s data centers will replace the “mostly vacant” United Airlines campus at 1200 East Algonquin Road. While a newly constructed substation will reside in the existing parking lot at 1200 Dempster Street. As shown below, the property is situated along Algonquin Road and Dempster Street at Linneman Road.

CloudHQ Mount Prospect Chicago Illinois Data Center Site Map

Overall, the site spans 49.7 acres, with the office campus comprising 43.6 acres and the parking lot encompassing a further 6.1 acres.

Development Plan

CloudHQ anticipates that building permit review and approval by all applicable entities will be completed in mid-2022. While demolition of the existing buildings on the campus will take up to one year, which is expected to be completed by Q4 2022.

Following demolition, CloudHQ will begin constructing the new data center campus, which is preliminarily referred to as Mount Prospect Technology Campus. CloudHQ intends to develop three, two-story data center buildings in a phased approach (i.e., constructing one data center at a time), with the first being the southwestern building.

CloudHQ ORD1 ORD2 ORD3 Site Map Substation

CloudHQ has named the three facilities at the Mount Prospect Technology Campus as ORD1, ORD2, and ORD3. As shown in the preliminary timeline below, each building at CloudHQ’s data center campus will take ~18 months to build.

CloudHQ’s first data center (ORD1) is proposed to be completed and operational by the end of Q1 2024. Whereas the project’s third data center (ORD3) is projected to be completed and operational in Q4 2026.

Power

ComEd (Exelon Corporation) will construct and operate a new substation at the Mount Prospect Technology Campus to accommodate the energy use of CloudHQ’s data centers. Specifically, the ComEd substation will be located at the southeast corner of Dempster Street and Linneman Road, across from the main data center campus (see above).

Rooftop Equipment

CloudHQ’s plans note that each building rooftop will have 82 chillers and 49 generators. Indeed, this equipment will facilitate each data center’s operation and provide backup in the event of an emergency or power outage.

Customers

Historically, CloudHQ’s customer base has been characterized by hyperscale customers signing 60+ megawatt leasing deals. For example, Facebook, Google, and Microsoft have leased capacity from CloudHQ in the markets of Ashburn and Manassas, Virginia.

Mount Prospect (Chicago) Data Center – Financial Details

Project Costs

CloudHQ indicates that each data center will cost ~$840m to construct. As such, this confirms the total CloudHQ investment in the Village of Mount Prospect of $2.5bn. In addition to the construction costs, demolition of the existing site’s buildings will cost an estimated $30m.

Tax Revenue

Between real estate taxes and utility taxes, CloudHQ’s project will generate “several hundred million dollars of tax revenue to local jurisdictions over the useful life” of the data centers. Particularly, in terms of utility taxes, CloudHQ estimates that the project will generate:

  • 10 years after approval: $500k to $1m in municipal utility tax revenue annually
  • 20 years after approval: $1.5m+ in municipal utility tax revenue annually

CloudHQ – Overview

Since inception in 2016, CloudHQ has completed the development of 1.2 million sqft of data center space. Additionally, the company is currently constructing an incremental 1.7 million sqft of data center space. Overall, these facilities comprise 430 megawatts of power capacity across 7 buildings.

Geographically, CloudHQ’s existing and planned data center campuses include Ashburn, Virginia; Manassas, Virginia; London (Didcot), UK; Paris, France; Frankfurt (Offenbach), Germany; and São Paulo, Brazil, amongst other markets.

Ownership

CloudHQ is part of the Fateh Family Office (Hossein Fateh) which also has investments in CloudCapital, WindHQ, and Dalian Development.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing.

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