Data Centers in Alexandria
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Alexandria – Low-Risk Colocation with Tax Advantages
Executive Summary
Alexandria, Minnesota offers a compelling environment for businesses prioritizing operational resilience and cost control. With very low natural disaster risk and significant state tax incentives, this market is an excellent choice for disaster recovery sites, secondary workloads, and companies seeking to optimize total cost of ownership without requiring ultra-low latency to major metropolitan hubs. Its stable infrastructure provides a secure foundation for critical business applications.
Alexandria: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity for most business applications. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest major hub is Minneapolis; private network extensions are available. |
| Power Cost | $0.08/kWh, as of 2021 | Competitive pricing helps manage long-term operational expenditures. |
| Disaster Risk | Low (24.66), as of September 2025 | Very low FEMA score indicates high resilience against natural disasters. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualifying data centers. |
| Sales Tax | 6.875%, as of midyear 2025 | Minnesota state sales tax rate. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Alexandria provides access to over 3 carriers as of September 2025. The market's primary data center facility offers a carrier-neutral environment, allowing customers flexibility in selecting network providers.
Direct Cloud On-Ramps: There are no direct cloud on-ramps within Alexandria as of September 2025, meaning access to 0 cloud regions locally. Businesses can establish secure, private connections to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, through network extensions from the nearest major hub in Minneapolis.
Internet Exchange Points (IXPs): Public peering is not a feature of the Alexandria market. Most network peering is handled privately or routed through IXPs in major regional hubs like Minneapolis to ensure efficient traffic exchange.
Bare Metal: Bare metal server options are available in the region, providing dedicated, high-performance computing. Providers like Hivelocity and ColoCrossing can service deployments in the broader Upper Midwest.
Power Analysis
Average Cost Of Power: The industrial electricity rate in Alexandria is approximately $0.08/kWh, as of 2021. This competitive power pricing provides a significant advantage for managing the operational costs of compute-intensive workloads.
Power Grid Reliability: The power grid supporting the Alexandria area is well-engineered and stable, consistent with infrastructure standards across Minnesota. Local facilities are equipped with redundant systems, including UPS and generator backup, to ensure high levels of uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Alexandria serve the growing commercial and industrial base of Central Minnesota. The location provides a strategic site for regional businesses to house their IT infrastructure locally.
Regional Market Reach: From Alexandria, organizations can effectively serve the Upper Midwest. It serves as a cost-effective and resilient alternative to primary hubs like Minneapolis for workloads that are not latency-sensitive.
Tax Advantage For Data Centers: Minnesota offers substantial tax benefits that directly lower the cost of building and operating a data center. The state provides a sales tax exemption, processed as a refund, on qualifying data center equipment and software for facilities that meet investment and size thresholds.
Natural Disaster Risk
Alexandria has a very low natural disaster risk profile, with a FEMA National Risk Index score of 24.66 out of 100, as of September 2025. This score places the area in one of the safest categories in the United States for infrastructure placement.
The primary environmental risks to consider are severe weather events common to the Upper Midwest. These include tornadoes, strong wind, winter weather, hail, and drought. The risk from other major hazards like earthquakes or wildfires is minimal.
