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Colorado lags in data center growth amid tax and power constraints

Denver added just 6.5 megawatts of data center capacity in the first half of the year, far behind fast-growing rivals such as Northern Virginia.

Reported · Written up by our desk · Industry

Colorado has largely stayed out of the AI-driven data center boom, with developers pointing to a mix of tax policy gaps and electricity supply bottlenecks, Bisnow reports. CBRE data cited by the outlet shows Denver added 6.5 megawatts of data center capacity in the first half of this year.

Bisnow says CBRE has identified the Mountain West as a fast-growing development frontier, but Denver has remained stagnant despite being a telecommunications hub. For context, Northern Virginia alone added more than 1,000 megawatts during the same first-half period.

At Bisnow's DICE: Rockies event in Denver, leaders from Colorado's data center and energy sectors said an overwhelmed power grid and outdated regulations slow developers’ ability to secure large blocks of power. The sector is increasingly focused on “speed to power” for hyperscalers, according to the reporting.

Capitol Solutions founder Sandra Hagen Solin said multiple barriers are discouraging investment, and she linked much of the slowdown to the absence of a targeted sales-and-use tax exemption for data centers. Hagen Solin added that corporate data center firms headquartered in Colorado are not investing locally because, in her view, the economics are not competitive.

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