Data Centers in Mankato
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Mankato – Low-Risk, Cost-Effective Midwest Hub
Mankato, Minnesota offers a compelling environment for businesses prioritizing operational stability and cost efficiency. Its very low natural disaster risk and significant state tax incentives create a secure, financially advantageous setting for workloads that require high uptime without the high costs of primary coastal markets.
Mankato: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid connectivity for a smaller market, suitable for many regional applications. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramps are in Minneapolis; access via private network extension. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial power rates contribute to lower total operational costs. |
| Disaster Risk | Low (24.66) – as of September 2025 | Very low score from FEMA's National Risk Index ensures operational resilience. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualifying data center equipment. |
| Sales Tax | 6.875% – as of September 2025 | State sales tax; see incentive details for specific equipment exemptions. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Mankato features a focused connectivity ecosystem with access to at least 2 network providers as of September 2025. The market supports carrier-neutral colocation, providing choice for network redundancy and service.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps located within Mankato as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud, and Microsoft Azure through dedicated network services extending from the primary regional hub in Minneapolis.
Internet Exchange Points (IXPs): Public peering is not a primary feature of this market. Most interconnection is handled privately between carriers or routed through major exchange points in Minneapolis to achieve low-latency connections to the broader internet.
Bare Metal: Bare metal server options are available in the broader Minnesota region, often provisioned from providers in the Minneapolis market. These services offer dedicated compute for performance-sensitive applications.
Power Analysis
Average Cost Of Power: Industrial electricity in the Mankato area is priced at approximately $0.08/kWh as of 2021. This competitive rate makes the market attractive for managing the significant power expenses associated with dense compute and storage deployments.
Power Grid Reliability: The regional power grid is well-engineered to support industrial needs. Data centers in the area benefit from reliable energy infrastructure designed for high uptime, with access to diverse power substations in the wider region.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Mankato serve local and regional enterprises, including agribusiness, manufacturing, and healthcare. Proximity allows for low-latency support for these core southern Minnesota industries.
Regional Market Reach: Mankato provides effective coverage for the southern Minnesota and northern Iowa regions. It serves as a viable secondary disaster recovery site for organizations with a primary presence in the Minneapolis-St. Paul metropolitan area.
Tax Advantage For Data Centers: Minnesota provides a significant sales tax exemption on data center equipment, software, and electricity for qualifying facilities. This incentive directly reduces the capital and operational expenses of building and running a data center, improving the total cost of ownership.
Natural Disaster Risk
Mankato 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 minimizes the threat of environmental disruptions to data center operations.
The primary risks for the area are severe winter weather, tornadoes, strong wind, and drought. The risk from events like earthquakes or hurricanes is negligible.
