Until a quick and powerful pushback, stealth mode has worked quite well for data center developers to acquire the necessary parcels of land and government approvals. The prospect of a lasting boost to a long-neglected region was perceived as so irresistible that developers need not worry about building trust, fully disclosing plans, and the time it would take to secure maximum concessions.
Using the playbook perfected by the variety of ventures needing a large geographical footprint, data center developers have quietly acquired the entire patchwork of separately owned properties without having to disclose their future use. Property owners considered themselves quite lucky that someone was willing to buy land in their remote locale. They gladly executed the mandatory non-disclosure agreements without a clue about the intended purpose for their land.
Stealth-mode land acquisition foreclosed the predictable increase in price and potential for local opposition. At the same time, developers began the process of convincing government officials that data centers would boost the local economy, increase employment, and augment tax revenues. What’s not to like, even though the developers insisted on secrecy?
While first generation data centers occupied large buildings in the central business district of major cities, widely available broadband fiber optic cable capacity has made it possible to construct massively larger facilities anywhere. The telecommunications carriers operating these transmission facilities gladly agreed to install a link to reach the new data center. The carriers got more traffic revenues, and the data center operator and occupants profited from having an increased capacity to perform the information processing and storage needed to make the Internet work.
Until the recent pushback, data center developers now could find sites where the landowners and permitting authorities were desperate for new investment and most willing to offer large financial inducements. Massively large “hyperscale” data centers initially received a hearty welcome by government officials who previously had to tolerate the occasional toxicity and citizen opposition to, hazardous landfills, jails, garbage dumps, fracking injection wells, and, most recently, temporary incarceration facilities to house immigrants lacking proper documentation for residency.
Stealth and maximum extraction of financial concessions accrued ample cost savings, but eventually residents became better apprised of the mixed consequences in data center construction and operation. Unlike taxpayer underwriting of stadiums, enterprise zones, and costly infrastructure, data center construction and operation typically fail to achieve all the much-touted long term financial benefits, such as large employment numbers after initial construction. Data center tenants often send expert staff for short term, onsite tasks, because they want to maintain control of proprietary technology and the local pool of prospective employees probably lack necessary training.
The offsetting costs and harms have become common knowledge. Local opposition has migrated from specific “not in my back yard,” to “not on this planet.” Orbiting data centers eventually may offer a cost competitive alternative, but not until investors, insurers, and other stakeholders are convinced. Until then, terrestrial data center developers must accept this increasingly obvious problem: without active, conscientious, and costly mitigation of problems, time delays in securing all permits and properties will cost more.
Simply put, data center operators and their tenants must address concerns about pollution, noise, negative impact on adjacent property values, higher residential electric and water rates, and the likelihood that the ample financial concessions they secured might not fully match future tax and local economy enhancement. Unlike a sports stadium or world class airport, data centers offer little boost to civic pride.
Charm trumps stealth.
