By JAMES FINK
jfink@bizjournals.com | 716-541-1611

The economic development pieces of a complex puzzle needed to convince Verizon to build its massive data center project in Niagara County are coming together.

The latest came Oct. 26 when the New York Power Authority's board of trustees agreed to allocate 25 megawatts of low-cost hydropower to the project. It's slated for a 168-acre parcel on Lake Road in the Town of Somerset that neighbors AES Corp.'s coal-burning plant.

The allocation was considered a crucial part of the handsome incentive package crafted for Verizon by Niagara County officials and others. The project is the biggest economic development prize on the local horizon, with the telecommunications giant proposing to invest $1.126 billion in four years to construct a back-office data center campus. It could employ as many as 145 people with average annual salaries of more than $85,000.

The project also would generate 500 construction jobs.

Verizon officials have been mum on their decision-making process.

Planned are three two-story buildings, 300,000 square feet each, to house billing and client services processing operations. The campus also would include an administration building, two emergency-backup power stations and a small conference center.

If Somerset is selected for the project, construction would start next year and the first building would be ready by 2012. The entire complex is expected to be completed by 2018.

Verizon is considering sites in other states for the center. The company has 250 data centers worldwide, including 21 in New York state.

The power authority in 2009 approved a low-cost hydropower allocation to Yahoo! That helped convince the company to build a back-office operations center in Lockport.

Richard Kessel, power authority president, said he hopes history repeats itself.

"Yahoo! officially opened its new data center in Lockport, thanks in large part to our allocation of hydropower for that facility. And we would do the same for Verizon in the efforts to make Western New York a magnet for various types of job-producing, high-tech industries," Kessel said.

To entice Verizon, the Town of Somerset agreed to rezone the Lake Road property. On Nov. 3, the Niagara County Industrial Development Agency will hold a public hearing on proposed incentives. IDA directors are expected to approve the incentives next month.

"The possibility of a Verizon data center coming to Western New York is an exciting opportunity that we're eager to make happen through assignment of hydropower," said D. Patrick Curley of Orchard Park, a power authority trustee.

Dennis Mullen, Empire State Development Corp. chairman and CEO, said this week's NYPA vote was "an essential component" of the incentive package.

"It's imperative that state and local economic development agencies work to provide the best possible resources that complement our existing assets," Mullen said.