Leander-based data center equipment manufacturer to move to bigger space in Georgetown

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Jun 5th, 2024

At stake for the company: Earth’s power supply

By Justin Sayers – Senior Staff Writer, Austin Business Journal

Jun 3, 2024

A Leander-based company that makes cooling equipment for large electronic devices will consume a big space in Georgetown that will allow it to ramp up manufacturing in the data center industry. Dozens of jobs will need to be filled in the coming months.

Strategic Thermal Labs LLC on May 14 was approved by the Georgetown City Council for up to $75,000 in incentives to move the bulk of its operations to a 60,000-square-foot facility at the 48-acre Georgetown Logistics Park. CEO and President Austin Shelnutt said the move will allow the company to grow out its manufacturing capacity and “make a serious splash in the data center liquid cooling market.”

Shelnutt cited data that data centers use 3% of Earth’s energy to power them — with the bulk of that power being used for cooling — and could reach 8% by 2028 due to a push toward more artificial intelligence initiatives. His company’s technology allows data center operators to reduce that total by 97%.

Florida-based Carrier Global Corp. in April announced an investment and technology partnership with Strategic Thermal Labs for the initiative in the liquid cooling market. Carrier already has a large footprint in cooling products on the back-end of data centers, but its partnership will allow it to fill in the gap inside the data center industry where servers reside.

“Together we have an end-to-end ecosystem, so we can optimize the amount of energy consumed to reject heat all the way from the chip and individual processors out to the exterior air and get rid of all the parasitic losses along that transport path,” Shelnutt said.

The move toward manufacturing marks a stark shift for the company. It was founded in 2014 as a consulting firm before moving into making things full-time in 2020. Before, the team primarily would help design cooling solutions for high-powered electronic devices, whether it was data center servers or defense military aircraft avionics and everything in between. They would then partner with customers to find someone to manufacture the pieces.

Strategic Thermal Labs has 12 employees and operates out of a roughly 2,000-square-foot space at 10921 East Crystal Falls Parkway. It has already started moving into the office portion of the Georgetown site, just east of Georgetown Municipal Airport and near the intersection of I-35 and the State Highway 130 toll road. The company aims to move manufacturing equipment in July, with the goal of having 70 employees 18 months after that. The current plan is to close its Leander site, but Shelnutt said they may keep it open as a way to have a place to meet with potential customers that doesn’t allow access to proprietary equipment.

The economic development agreement, codenamed Project San Saba in discussions, between Strategic Thermal Labs LLC and the Georgetown Economic Development Corp. provides up to $75,000 in job creation jobs for the move. While it doesn’t put a target on the number of employees it has to have, the company is required to move over 10 employees to the Georgetown site by the end of August. Then, the company will have access to $3,000 per additional job created for a maximum of $75,000. The company also has to invest at least $1.5 million at the site by February 2026, including $500,000 before the end of the year. Tenant improvements must be complete by the end of the year.

Cameron Goodman, the city’s economic development director, said the city is excited about the addition of Strategic Thermal Labs because it adds another manufacturer to the north side of Georgetown. Other companies that have set up shop in the area include Control Panels USA Inc.Hanwha Advanced Materials LLCCelLink Corp.KreateUS FarathaneZT Systems and GAF Energy LLC.

Goodman said Georgetown has been able to attract manufacturers for a variety of reasons. That includes the city’s wealth of speculative development, which allows them to lure companies working on tight timelines. The city also has a strong workforce base due to its population growth and because they are proximate to Fort Cavazos, where graduating military employees are transitioning into the civilian workforce and are a good fit for manufacturing jobs.

StoneLake Capital Partners LLC announced the Georgetown Logistics Park back in 2021 and has finished construction on three buildings totaling 620,000 square feet.

Ace Schlameus and Kyle McCulloch of JLL are handling the leasing. Schlameus said that 1-800-Pack Rat took the entirety of 70,000-square-foot building 2 a couple months ago, while Strategic Thermal Labs took about half of the 123,000-square-foot building 3. No other deals have been signed to date, including for the 426,000-square-foot building 1.

Shelnutt said they were interested in Georgetown, which is 30 miles north of Austin and is the fastest-growing city of its size, because of its familiarity and availability. He said his wife taught at Georgetown High School, so they really liked the schools, area and community. But he also credited the city for making a good investment in built-out industrial spaces.

“Industrial buildings like the one that we just moved into are not easily found around the Austin area,” Shelnutt said. “They are kind of few and far between and they’re all getting picked up pretty quickly by a lot of businesses moving to the area.”

Shelnutt said his biggest challenge is getting customers to adopt the technology. He said it’s been a struggle because the technology is still new, and many data center operators are afraid to switch because they prefer conventional techniques and may not want to spend the money. But that’s starting to shift as the availability of power, sheer usage and demand continue to increase.

“If we can free up electricity that would otherwise be used for cooling infrastructure and give it back to the servers … then we can allow those customers to operate significantly more productively,” Shelnutt said.

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