A marketplace for data center siting

The Host Exchange™

The Host Exchange is a marketplace where communities and data center developers can find each other on standard terms. We give communities the documents they need to organize, certify them once they have, list developers' sites, match the two sides, and keep a record of every agreement that gets signed.

One thing to know up front. The Exchange is paid by developers, through membership and a fee on each agreement. We don't take anything from the community's share, and that is written into how the Exchange is governed.

Why this is needed

Three of the four parties have a headquarters. The community doesn't.

A data center campus involves four parties, and three of them have a physical place of business. The tenants, the companies whose servers fill the buildings, are largely on the Pacific coast. The landlords who build and own the campuses are mostly based in Dallas, Denver, and Houston. The investors who fund the campuses tend to be in New York. Each of them can be found, called, and contracted with, and each has done this many times before.

The fourth party is the county where the campus is going to be built, and it has none of that. There is no office, no phone number, and usually no entity that can sign an agreement. The community shows up, if it shows up at all, as a crowd at a public hearing, weighing in after most of the terms have already been set. The result is that the community has no price, and every project starts the conversation from scratch. The value is created in the county, but everyone who captures it is somewhere else.

WEST EAST The tenants Seattle Silicon Valley The landlords Denver Dallas Houston The investors New York The county no address where the campus will stand Three parties with a home office, and one without. The value gets created at the dashed circle.
Where everyone sits. The Exchange is meant to give the dashed circle an address of its own.

How a community gets organized

The kit

A community can't list on the Exchange until it has something a developer can sign with. So we send every community the same six pieces, at no cost: a revenue vehicle ready to be formed, a trust with its bylaws, a resident board, the limits the community won't negotiate away, the standard terms, and a fiduciary drawn from our panel. The county puts them in place, we certify that it has, and the listing goes live. That usually takes weeks rather than years, and because every county is working from the same documents, developers end up negotiating against the same paper everywhere they go.

Revenuevehicle Trust andbylaws Residentboard Toll gates:tariff, water,air, noise Termsaccepted Fiduciaryfrom the panel the kit · provided by the Exchange at no cost · put in place by the county CERTIFIED listed on the Exchange a counterparty that can sign The same six pieces in every county. Once enough counties are organized on the same documents, the standard becomes the default.
The Exchange supplies the parts and the county does the work. The certification is what a developer can rely on.

How the Exchange is paid

Two streams of money that don't cross

Developers pay for the marketplace. They pay an annual membership and a fee on each agreement signed through the Exchange, which is owed by the project and scaled to the size of the campus. The community's participation is a separate stream entirely. It flows from the campus to the community's own trust and is divided according to the trust's own bylaws. The Exchange isn't on that line, and the Exchange's governing documents say it can't be. We think that matters, because a marketplace that gets paid out of the seller's proceeds has a reason to want the seller to settle for less.

THE VENUE'S MONEY Developer membership · deal fee The Host Exchange which pays for the kit, certification, the panel, and the record THE COMMUNITY'S MONEY The campus a share of gross revenue The community trust resident board · its own bylaws Households · endowment Projects · administration The Exchange isn't anywhere on this line.
The developer pays for the marketplace. The community is never charged for using it.
What a community lists

Organized before the developer arrives

  • A Community Revenue Vehicle, ready to form
  • A trust with the household dividend floor built in
  • A resident board with staggered terms
  • The limits it reserves: tariff, water, air, noise
  • Acceptance of the standard's participation terms
  • A fiduciary chosen from the Exchange's panel

We provide the documents. Most counties can go from a crowd at a hearing to an organized counterparty in a matter of weeks.

What a developer gets

Certainty that a hearing can't provide

  • Organized counties, visible before site selection
  • A certified counterparty that can sign
  • One standard contract; no negotiation from zero
  • Fiduciary oversight of the community's side
  • The record of what the last campus agreed to
  • Months removed from approval

Time is money on a project this size. Our fee is set against the delay we help remove, not against the community's share.

Why it gets easier

Each agreement makes the next one shorter

The first agreement in a state has to be worked out from the standard with nothing to compare it to. The second gets negotiated against the first. By the fifth or sixth, there isn't much left to negotiate, and the parties mostly sign. That is what the record is for. It lets a developer understand what a county is likely to expect before anyone gets on a plane, and it lets a county know what it is owed before the developer arrives.

TIME FROM FIRST CONTACT TO SIGNATURE Campus 1 Campus 2 Campus 3 Campus 4 Campus 5 Campus 6 a signature
Illustrative. The first agreement is negotiated; by the sixth, the parties are mostly signing what the record already shows.