Unlocking the potential for the Northern Ireland’s first enterprise zone

The Causeway Coast is experiencing a period of economic positivity thanks to its range and popularity of attractions. Richard Baker, Director of Leisure and Development at Causeway Coast and Glens Borough Council, talks to agendaNi about diversifying the economy through Northern Ireland’s first enterprise zone.

Tourism and agriculture have long been at the heart of driving the economy of the North West. Next year the Giant’s Causeway, Northern Ireland’s biggest visitor attraction, is set to breach one million visitors and alongside major draws like the North West 200, Air Waves Portrush, the Irish Open and the British Open, the local authority of Causeway Coast and Glens Borough Council is hoping to seize on potential growth.

However, as well as these economic mainstays, there is also an acknowledgement that further growth of the local economy will require new thinking and fresh innovation. The landing of Project Kelvin, the transatlantic digital connection, in Portrush presented an opportunity, that as Richard Baker explains, tied in with the area’s higher education offering and lower property and land prices, needed to be seized by the local authority.

The shift to diversify the economy can be pinpointed back to 2012, when facilitated by Lord Ballyedmond, the former Coleraine Borough Council hosted an investor banquet in the House of Lords, showcasing the region’s digital infrastructure value proposition. The result was interest from global data centre company, 5Nines.

Baker explains: “We sat down with 5Nines and worked out a development plan and how we could best deliver on those needs. Their priority was closeness to Project Kelvin but they recognised the benefits of being so closely located to the Ulster University campus, which is a hub for STEM research and a flowing talent pool.”

Based on those components, Council acquired a 20-acre site, which was originally designated as the Ulster University Science Park, with the potential to expand to another 20 acres of private land.

The higher education collaboration and securing of an anchor tenant meant that the former Department of Enterprise, Trade and Investment (DETI) identified the site as a candidate for the UK government’s search to extend their enterprise zone initiative.

Baker states: “5Nines are essentially unlocking Project Kelvin and while the data centre is not a direct economic driver in terms of job creation, it is key infrastructure, which will incentivise further investment in the site.”

Asked about the benefits the designation of an enterprise zone offers to businesses, Baker says: “The greatest benefit is that of Enhanced Capital Allowances (ECA), the ability to write off capital investment of a project against corporation tax. This provides huge benefits for capital intensive investment like data centres, in which the majority of the investment is the capital costs of the facility.”

In comparison to the utilisation of an enterprise zone for foreign direct investment, the Republic of Ireland opted to lower corporation tax and in doing so has become the data centre capital of Europe. Baker believes that the proposed lowering of corporation tax for Northern Ireland would not override the enterprise zone’s attractiveness.

“If anything, it will compliment it, and the ECA’s are available right here right now” he says. “After a period the ECA incentive will cease to exist and at that stage a lower rate of corporation tax would provide ongoing operating benefits. In terms of comparisons with the likes of the Republic of Ireland, we aim to complement not compete. As a carrier neutral data centre, it is not linked or dependent upon one of the major telecom carriers.

“5Nines are essentially unlocking Project Kelvin and while the data centre is not a direct economic driver in terms of job creation, it is key infrastructure, which will incentivise further investment in the site.”

“As the closest data centre and enterprise zone to both the United States and Europe, I believe this site can be complementary to the industry that exists around Dublin and other parts of Europe at this moment in time.”

Admitting that the major challenges for the local authority exist in being a pioneer in this space, Baker is optimistic about its success and believes that it is likely similar schemes could be rolled out across other council areas if proven successful.

As well as offering benefits to businesses, Baker outlines that the local authority will also benefit from a drive towards new industry.

“We understand the need for a more diverse economy in terms of growth. Causeway Coast and Glens Borough Council has the lowest mean average wage across the whole of Northern Ireland and what this diversity offers is the opportunity to generate higher value jobs in the area and retain the skillsets and talent pool that is being developed on our doorstep.”

With the project officially launched on 20 June, Baker outlines three key markets the Council are seeking to utilise the remaining space on the site.

“Firstly, is the Fintech sector, recognising that the financial industries sector is growing throughout Northern Ireland. Secondly, is the health and life sciences sector. The Ulster University is rated as one of the top research centres in this area across the UK and we see a space for utilising the proximity of that talent pool. Thirdly, is the media sector. The university have recently invested in a multi-million-pound project to develop their media centre and potential collaboration is an area we would like to explore.”

Work on the site has now started and is expected to be completed later this year and it should be operational by January 2018. Baker states that their target is to reach 60 per cent occupancy at the earliest possible period.

Concluding, Baker says: “At the moment the Causeway Coast is experiencing an economic boom. Alongside our established activities and main attractions, we have a number of huge events coming to the area. This, coupled with our new direction for economic growth, means that everyone in the Council, and those collaborating with us, are positive about the future and our ability to capture the benefits.”