The Elevator Pitch (Financial)
These data centers do not belong in small towns. The risks are too great. Data centers of this scale should be built in communities with a large enough tax base to absorb the loss when they become obsolete or their owners fail.
The Industry is Volatile
The technology industry changes rapidly, casting aside old technologies without an ounce of nostalgia.
Data center lifespan is 15-25 years.
Data centers are purpose-built, not general purpose, making future reuse more expensive and difficult.
What will a small town do with multi-million square feet of purpose-built data center space once it reaches obsolescence?
Obsolescence of a data center is reached when the cost of building a new data center is less than the cost of retrofitting an existing one.
The Financial Risks
Upon full buildout, a single taxpayer and single property will account for a massive percentage of total municipal revenue (e.g. Beaver Dam 35%, Port Washington 34%). The sudden loss of that revenue due to obsolescence and lowered commercial property valuation will be catastrophic. Tax rates will have to explode on current taxpayers in order to make up for the gap.
Small towns do not have the expertise to negotiate deals with large corporations.
Small towns do not have the legal budget to challenge large corporations.
The state legislature had to waive its “12% rule” for Beaver Dam and Port Washington. That rule protected small towns from financial concentration risk.
Tax increment financing delays financial benefits to the municipality far into the future.
Impact to Residents
Construction schedules of hyperscale data centers can take 10+ years, creating miserable experience for anyone who lives nearby
Temporary significant loss of property value to any property within a mile radius of the site
Economic Benefits are Overstated
Data centers are operated “lights out,” employing very few people per acre of developed land. (Port Washington: 1 job per 5.6 acres)
Data centers do not attract commercial or residential development