In May of 2016 the Augusta Canal Authority announced a 75-year lease of the 518,000 square foot Sibley Mill to Cape Augusta, LLC. The authority had purchased the mill for safekeeping while they marketed the property for a suitable tenant.
Sibley is a former industrial textile manufacturing site consisting of several buildings and contains a hydropower unit with approximately 2 MW of production capacity and is located on 15.33 acres between the Riverwatch Parkway and the Augusta Canal
According to the lease agreement between Cape Augusta and the Canal Authority, Cape Augusta “wishes to develop Sibley into a mixed use, technology park, data center and research and development facility.”
The lease further states the Canal Authority will receive “3.1% of the gross revenues achieved by the Developer derived from any and all income from the Development, including without limitation from sublesses and data center revenue.”
At the time, the agreement seemed like a great use of the property, as a cloud based storage facility would generate far more revenue per square foot than office, retail or apartments ever would. The hydro power would provide a cheap source of energy, and the canal would provide cooling for the servers.
In addition to the 3.1% cut of gross revenue, the Authority receives a monthly lease payment of $1,911.23 paid in an annual lump sum of $22,934.76 for twenty-nine years and in the thirtieth year, the lease increases to $2,572.46 per month.
In January of 2018, Cape Augusta exercised its option on King Mill and purchased the even larger brick factory for $3 million.
Recently, the company was before the city beginning the process of carving out over two hundred luxury apartments in the 600,000 square foot former textile mill.
Unfortunately for both parties involved, the server farm concept for Sibley is now dead in the canal water. Both Wayne Millar of Cape Augusta and the Augusta Canal Authority Executive Director Dayton Sherrouse recently agreed the demand is no longer there for small cloud storage facilities sprinkled around the country.
While many don’t see that as a great surprise, as Amazon, Microsoft and a host of other large corporations have been building out the cloud storage capacity for years, the shock of the state dumping $100 million down the street at the Georgia Cyber Center definitely caused more than a few local developers to drop back and punt at this site.
So, now it is back to the drawing board for Cape Augusta in regards to Sibley. As the terms of the lease spells out, the daunting job of keeping the enormous building maintained now falls on Cape Augusta’s shoulders.
This is no small task, as evidenced by a shutdown back in July of last year. A section of the roof drain on the top floor broke, allowing the water to come down through all four floors, right above the switch gear for the hydro. The deferred maintenance resulted in 28 days of downtime.
“There are other portions of the building, that you go in there you’ll see some water on the floor,” Sherrouse shared.
It should be noted the hydro electric equipment and the power they produce is not a part of the lease agreement. They are owned and operated by the Canal Authority.
The hydroelectricity generate tens of thousands of dollars of energy monthly for the Authority, some of which is sold to the tenants and Georgia Power.
With a roof that is in need of constant attention and basic day to day needs of a building that was never quite properly mothballed, the motivation is there to get some tenants soon.
PHOTOS: JOE WHITE