More than a year after it was announced with much fanfare, a data center is still in the works in Eagan, although with a smaller facility than originally planned.

Five 9s Digital of North Carolina no longer plans to house the data center, to be called The Connexion, in a newly built 138,000-square-foot facility on Yankee Doodle Road. The original cost for that project was to be at least $75 million.

The company instead plans to buy and redevelop an 88,000-square-foot building near Lexington Avenue and Yankee Doodle, previously used as a bakery outlet by Taystee Foods. Five 9s CEO Doug Hollidge declined to disclose the purchase price but said the revised plan will allow it to have the building ready sooner and at lower rental rates for tenants.

Hollidge said his firm has only recently begun marketing space in the building that will be retrofitted to suit the needs of users.

The data center will be designed to provide so-called "co-location" service, functioning as a sort of computer hotel for business customers. Tenants would include Internet service providers, telecommunications companies and businesses that need off-site data storage.

The idea to develop a data center in Eagan goes back several years, growing out of a study by the city that examined ways to make itself more attractive to tech-related businesses. The study identified the need for a data center in the south metro area, and the Eagan City Council embraced the concept, calling it "critical infrastructure," according to Tom Garrison, the city's communications director.

Currently the vast majority of the Twin Cities' public Internet traffic runs through a single facility in downtown Minneapolis and from there to Chicago, a major Internet intersection for the country. The Eagan facility would initially use a route to the Internet via Kansas City.

Garrison said most metro areas have more than one data center, so as to not depend on a single facility as a portal to the Internet. "We have companies here in Eagan that would lose significant amounts of money if the Internet connection ever went down," he said.

Eagan isn't the only city to recognize the market for multiple routes for carriers and Internet service providers. HyberData, a small business based in Chaska, is retrofitting a 40,000-square-foot office building into the same type of data hotel that Eagan is pursuing.

Garrison said it's not surprising that other communities are exploring ways to provide co-location options. "The Twin Cities has one of the largest concentrations of Fortune 500 companies in the country, yet we do not have the needed route diversity. ... Having multiple technology corridors in diverse areas of the Twin Cities is a good step in the right direction to bring the level of diversity up to other major hubs such as Chicago, New York, Dallas and Los Angeles."

Garrison said one of the benefits of doing the study was promoting Eagan as an attractive place for a data center. "That has not just gotten the attention of Five 9s Digital. A couple of other players, including companies that are well known nationally, have been actively kicking the tires in Eagan," he said. He said it's conceivable the city could wind up being home to more than one data center.

"To some extent we're sort of agnostic about who gets it done first, but we continue to believe that it's valuable to get it done," he said. "We would welcome others. If more than one gets it done, that's a good thing from the standpoint of putting Eagan on the map as a place that is a destination for these kind of data centers."

The effort to bring a data center to Eagan comes as the city continues work on a 16-mile fiber loop that could be connected to the facility. The city plans to lease it out to businesses in the city; it was funded primarily through water tower lease revenues and non-tax dollars.

Susan Feyder • 952-746-3282