Windstream Seeks $30 Million in Revenue Bonds for Little Rock Data Center

by Robert Bell  on Wednesday, Apr. 27, 2011 10:56 am  

Windstream Corp. of Little Rock is seeking up to $30 million in city revenue bonds for servers and other equipment at the data center it is developing at the former National Home Center building at 15707 Chenal Parkway.

The company paid $2.7 million for the property, which will be the site for a 17,000-SF center.

The Little Rock City Board will consider the bonds at its May 3 meeting. If approved, the city will issue the bonds, which Windstream will purchase, and use the proceeds to buy the equipment, said Scott Morris, a Windstream spokesman.

Because the city will own the equipment, it will be exempt from property taxes.

Windstream will make a payment in lieu of taxes to the city equal to 35 percent of what the tax on that equipment would have been. The bonds won't be issued all at once, Morris said.

"We'll continue to pay the full property tax on the building itself and the land," he said.

Morris said the bonds are "a good economic development tool to grow jobs and new industries in Little Rock. We'll be hiring 15 to 20 people initially as part of this project."

The company also announced Wednesday that its Hosted Solutions division, based in Raleigh, N.C., has opened a new data center in Charlotte, N.C.

Windstream (NYSE: WIN) now operates three SAS 70 Type II certified facilities within the Charlotte market, in addition to data centers in Raleigh and Cary, N.C.; Boston; Newton, Iowa; State College and Ephrata, Pa.; Jacksonville, Fla.; Atlanta; and Nashville, Tenn.

Looking to 1Q Earnings

Also Wednesday, Barry McCarver, senior vice president of equity research with Stephens Inc. of Little Rock, reiterated the firm's rating and $18.50 per share target price for Windstream in a research note. Shares were trading at about $12.71 as of mid morning.

McCarver wrote that Windstream's revenue guidance for 2011 was cautious, calling for a range of $4.015 billion to $4.14 billion, which would represent a decline of 3 percent to flat compared to the previous year.

 

 

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