File photo by Howard Owens.
Last week, The Batavian met with Mark Masse, CEO of the Genesee County Economic Development Council to ask him to respond to some of the issues raised at a public hearing on potential incentives for construction of a data center in WNY STAMP.
The public hearing was held on Feb. 3 in the town of Alabama.
More than two dozen people spoke, raising a range of objections to the construction of a data center on the site.
On Thursday, the GCEDC board may consider whether one of three potential projects -- from STREAM U.S. Data Centers, LLC, Project Rampart, LLC, or Potentia Holdings, LLC -- should be welcomed into the technology park.
Q. We asked Masse to respond to the appearance that the data center projects don't seem to generate as many jobs per square foot as a project like Edwards Vaccum.
Masse: "I think if you look at the average salary, I think these jobs are in the triple digits, $100,000 average, $80,000 to $100,000. With the way technology is going in AI, I think that those are high-value, high-technology jobs. Now, are those the number of jobs that we would like to see? And again, all of these applicants are very conservative on their numbers, because they're concerned about clawback and not meeting numbers. So our anticipation is they would come in higher than what they pledged, but what they pledged is a number that they feel is easily achievable for them. And data centers were proposed way back in 2012 as one of the original uses at the site, along with all of the other advanced manufacturing when we did the technology districts.
Q. Data centers have been controversial in other communities. People mentioned North Tonawanda. Have you looked at those data centers and how they've been received in those communities, and whether that's a concern for you?
Masse: "I think it really depends upon a lot of variety of factors. So our board has been very clear that they don't want any crypto or any bitcoin, absolutely none. And if you look at a lot of the louder, noisier ones, they tend to be the crypto Bitcoin operations. So we would actually put into the documents that if we come to find out you're doing Bitcoin or crypto, we would terminate benefits and claw back. And that clawback would obviously include a very significant sales tax exemption, so we feel pretty good about the penalties that would be in place, but our board's been adamant that we don't want crypto in that technology has also come a long way. And I don't think the building in Tonawanda was originally built as a data center. It was an adaptive reuse. So the facility that they're going to be building (in STAMP) is going to be brand new. It'll have all of the lessons learned from previous projects, such as noise mitigation and things like that. So we anticipate it to fit within the parameters of what was analyzed for the EIS, and we would anticipate them to propose and follow through on any potential mitigation that we would suggest for noise or that the town board planning board may suggest for noise. If we decide to go through our board would decide on either one or none. I think there's no desire to do more than one data center at STAMP."
Q. What about excessive greenhouse gas emissions?
Masse: "Again, we've done our analysis on the air emission side of that. We're following all of the permitting requirements by the DEC. The GCEDC does not meet the definition of a state agency under the CLCPA guidelines, but we do an analysis for that under the CLCPA, and the DEC would also do an analysis of that if a company were to move forward with air permitting. So we feel that it's within the parameters that would have been previously analyzed under the EIS, and that any of those air emissions would be permitted through the DEC process."
Q. One speaker spoke about hydrology in the region, in the wetlands and surrounding areas. What are the concerns there that you are looking at? What is your response?
Masse: "Again, the sanitary sewer would be force main discharged into the village of Oakfield wastewater treatment facility where it would be treated and discharged. Any on-site stormwater would be captured on-site. The DEC requirements for that are that the water can't flow off of the site at any greater rate after development than it did before development, so any cause concerns for flooding or things like that wouldn't happen. And they do enforce bioswales, green infrastructure, and things like that to ensure that the water quality on site is maintained. If there is runoff from parking lots or things like that, that it's contained on-site and treated on site before any of that would be potentially discharged."
Q. A letter read at the hearing stated that the project contradicts New York State's international commitments to environmental sustainability, social responsibility, and long-term stewardship of the wetlands. Any response?
Masse: "So again, everybody seems to be talking about the wetlands on site, as if they are like a wildlife refuge. This is agricultural land that has been farmed for a number of years. Our EIS originally proposed only impacting, I think, nine acres of wetlands, and then when we revised it. We're down to six, and they are classified as wetlands. But if you go out there, a lot of them are just drainage ditches through fields, a depressed area in a field. That's not year-round; they dry out, so I don't understand. And same thing when they talk about like pristine habitat. It's been farm fields. It's been farmed. It hasn't been good habitat. They rotate crops. Many of the crops there are not what the birds would use to do their hunting. So again, it's been farm fields for over 200 years. We do comply with all regulations that are out there. We've had a jurisdictional determination done between Army Corps as far as what wetlands they take jurisdiction over. We're complying with all of those. That was last updated in 2023, I think, and they're good for five years. I know the state regs are changing where they're going to drop their jurisdiction to anything greater than seven acres, but that doesn't affect what we're doing on-site. So, again, I understand their concerns, but I just don't think they understand the land that's out there and what it really is."
Q. People mentioned the Big Woods (on the reservation). Does that the neighbor the site, or is it just close by?
"If you look on the map there, you see the power line kind of rerouted. The yellow area is 310 acres; if you go directly to the west at the edge of that line, that is the Big Wood. So that power line reroute, there'll be no development to the west of that. That's a 115 kV line, and we rerouted it that way to help provide a visual buffer so you can't go past that, so to speak. And as part of our agreement, the settlement agreement with the nation, we did provide for the green area, basically, aside from that 80 acres on the south, the majority of that green area there is a buffer area and wetlands that are basically not going to be touched, so that's just going to be grown forever wild."
Q. There was a statement that a data center will consume 200 megawatts of electricity annually, training the regional system, and the center would use 800,000 gallons of fresh water daily. Are those numbers accurate? Are those legitimate concerns?
Masse: "As far as the power goes, it's not going to strain the system. Anybody in New York State who tries to draw down more than 10 megawatts off of any power line anywhere is required to undertake a study with a New York independent system operator, where they will take your request and they will do an analysis of the entire grid and bring in all the operators, so National Grid. RG&E NYSEG, NextEra, and they'll run a model to say, if you were to draw X amount of megawatts off, how does that affect everything in the system? And if it requires some improvements in what they call remote ends or other substations before you draw down the power. Those improvements have to be made. So we did two different studies, each one for 300 megawatts, and it took us about four to five years to get through that study. So the NYISO has given us, I think, there was $6 million of potential improvements at a station up in Rochester, and that was it for us to get the 600 megawatts. So, according to the NYISO and the study they've run, there is no degradation or problem on the overall grid to draw down 600 megawatts. Those studies are all being done in conjunction with a lot of solar projects because they're trying to put power on the lines while we're trying to draw it off. So, all of those are being taken into consideration across the state in various studies at various times. So as far as the power not being available, it's there. The NYISO has confirmed it for us. And as far as causing issues on the grid, it will not.
"As for us, the 800,000 gallons per day of water, that was what one applicant put in with their first application. After reviewing and discussing with them, they came back with a revised, I think, 30,000 gallons per day. So, all three of them are probably between 20,000 and 30,000 gallons per day of water, which is not a significant use. A lot of them are going with closed-loop cooling systems. The ambient air temperature here obviously is very helpful for them to be able to use air for cooling."
Q. Evelyn Wackett brought up threatened species, the short-eared owl, northern Harrier Hawk, monarch butterfly and bog turtles, any threats to these species?
Masse: "We did receive what's called a part 182 incidental take permit. We did propose a net conservation benefit. So, we created 58 acres of grassland habitat on the site that'll be maintained in perpetuity. Part of that will be a 33 acre site that'll be turned over to the DEC to be merged into the John White game farm, as far as the others, they were not identified in any of the studies we've done. I do know that as part of the construction of the substation, there is a berm there, and I've talked to our environmental company about using that berm as a pollinator field, specifically to help monarch butterflies and other pollinators. It'll also help us maintain that berm and also give it more coverage on that as well."
Q. One of the more dramatic moments, Kristen Moser, with her recording from in the Big Woods of birds and then a truck going by. What do you say to that?
Masse: "Number one, it's hard because I don't know her data points, right? I don't know where you were when you did the recording or what time of day. It's hard to say any of that. I mean, if you go to (Route) 77, there's heavy truck traffic on 77 all day long, coming up and down that road. So there's not much I could really comment on that without knowing more details about where those recordings were taken and what the time was and the distances involved."
Q. I think she's equating the truck traffic that's there for construction with -- and we've kind of discussed already -- the sound issue of the plants.
Masse: "My question would be, I don't know where she was when she recorded the truck traffic. That's the point. If she was in the Big Woods, I doubt it because all truck traffic right now comes in off STAMP Drive and then goes right down the hammerhead to the Edwards site. You know, the town has received some complaints from some truck traffic coming down the north end of Crosby. I think those were mainly concrete trucks or gravel trucks coming from Orleans County down Salt Works Road. So the town made sure that they've got to come around and come in off a 77."
Q. More than one speaker questioned whether public funds should e used to incentivize uncertain benefits, without first conducting an independent economic analysis of costs and benefits. Response?
Masse: "First of all, this is a common misconception. Public funds are not being invested in this. Companies do not receive cash. They receive abatements of taxes that they would normally pay. In this particular case, two of the three data centers would be paying about 105% to 110% of the property tax rate under a pilot. They would get a PILOT, but they would be paying more than market rate for what the property taxes are. The significant abatement is the sales tax exemption. Now, what people probably also don't realize is that in 2012, the New York State Department of Taxation and Finance issued an opinion that servers are tax-exempt from sales tax. If I think something along the lines of, if a company is using the internet, broadband is part of it. So basically, that was done to, I think, attract the Yahoo facility up to Lockport. Now, if data centers start becoming extremely interested in New York State, there is a chance that the Department of Taxation and Finance could revise that opinion and say that servers are tax-exempt altogether, in which case it's a moot point. So my guess is that these companies would ask for the abatement, and then they would probably apply to the Department of Taxation and Finance for an opinion, and if the opinion comes back and says they're tax-exempt, then really all we've given up is a mortgage tax exemption to get somebody to pay 110 or 105% property taxes on the site."
Q. They're paying 110% of the property tax rate?
Masse: "We do a fixed dollar pilot, so we calculate based on the square footage and choose a rate per square foot. We actually had the companies make us their offers. So they independently submitted their final investment offers, and it was calculated on a per square foot basis, times the square footage. And then there was, and I think some of them had an escalation rate every year, whether it was two, two and a half percent, something like that. So it would start at a fixed dollar, and then it would go up after that. So when we do a fixed dollar pilot, they pay the dollar value in the pilot. It's not 10% or 100% of whatever the current value is, which is what some of them are when they do the abatement."
Q. Okay, so, I guess I'm kind of confused. If they're paying more, they're paying what their taxes would be without the pilots ...
Masse: "They're paying more than what the taxes would be."
Q. Without a PILOT. Why would they do that?
Masse: "That's how much they want to come to the site, and that's why power is such a scarce resource for companies like this."
Q. I know it's been the practice for GCEDC to be the lead agency, but given the the wide range of environmental concerns here, is it best for GCEDC to be lead agency on this, or should somebody else be lead agency?
Masse: "We did the original EIS, and usually whoever was the lead agency for the EIS should remain as lead agent for that. We did all the original studies. We've done the appropriate ones. And again, we're required as lead agency to send out a notice every time we want to re-establish ourselves. It goes out to all interested, involved agencies, which includes the Army Corps of Engineers and the DEC. We receive comments from the Army Corps and DEC on any of the SEQR analyses we do; they get copies of it. So, there is appropriate other parties that have a significant investment and interest in the site, who are actively involved in the review and commenting on the overall environmental review."
Q. How does the general public have confidence that all the environmental concerns have been addressed through the SEQR process?
Masse: "We have at least 7,000 pages of studies, reports, documentation, comments from DEC, and responses to DEC. And again, at the end of the day, any company that wants to build there has to get a permit from the DEC. So if there were something inappropriate or something that wasn't there, then the DEC probably wouldn't issue a permit. We would hope we would hear if they had concerns before that. And again, they've expressed their comments on some of our SEQR things."
