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4 Controversies That Follow The Construction of Hyperscale Data Centers

By Stan Hanks, who’s built 25 data centers since 1982. Originally published on Quora.

I got to see this sort of controversy up close and personal while exploring exit options for a piece of property that my employer owned in eastern Washington. The property itself wasn’t anything special but it came with a 20 year electric power contract at a significantly below market rate for a significant amount of power. No one really cared about the bulk of the property, an industrial plant that was largely slated for demolition, but that it came with the power made it very interesting indeed for use as a data center development.

The city in which this was located had placed a moratorium on development of data center operations. The city was very clear on this matter, and it wasn’t up for discussion.

Digging in, their reasons were familiar:

Lack of jobs created. A big data center operation could create a handful of jobs, not more. Nearly all of those new jobs were highly educated and skilled professionals who would move to the area, as opposed to people already living there getting new employment opportunities.

Opportunity cost. While the property came with an indefeasible contract for the power, if that power were taken down for a data center operation, it would effectively limit the ability of others to come in seeking the very low-prices market-rate power in the area to do other things. To them, it looked like trading nearly no new jobs for a guarantee of not being able to create other jobs, sort of a lose-lose situation for the area.

Fear of change. The city wanted the prior agriculturally oriented factory and the 500 or so jobs it embodied back. The realization that the economic climate which made that happen was long dead and gone was not dawning on those in power, and a dream that it will magically come back persisted. Facing the reality that a new time was on them meant giving up the notion of either full employment for those remaining or growth of the city by 1000+ families to support a new classic industrial age endeavor.

Fear of transient work forces. While the initial construction phase of a new data center operation would mean some short term jobs for locals in the trades, it would also mean a giant influx of workers moving from project to project from outside the town. They’d need places to live, and were feared to “bring trouble” with them.

All in all, it’s harder to get smaller communities to the table on projects like this unless there’s something “in it for them”. The exact nature of what that is varies; some are receptive to bigger tax bases, but for some, that’s not the currency in which they trade.

By Stan Hanks, who’s built 25 data centers since 1982. Originally published on Quora.
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