Civic Learning Series - Data Centers & the Digital Economy

Updated about 5 hours ago

In the session titled "Data Centers in the Digital Economy: A Civic Learning Session," experts explore the impacts of data centers on communities and the economy. They examine how these centers interact with the electric grid, their water usage, and the potential benefits and challenges they bring to local areas. The discussion includes how local governments can prepare for and negotiate with data center developments to maximize community benefits and mitigate negative impacts. The session is part of a series aimed at fostering informed community engagement on complex issues.

Chapters

Introduction to Civic Learning Sessions (00:00:26)
The video begins with an introduction to the first of three civic learning sessions, focusing on data centers in the digital economy.

Introduction of the first session of three civic learning discussions, highlighting the focus on data centers and their role in the digital economy. The structure of the sessions and their importance for civic engagement is outlined.
Facilitator Introduction and Session Goals (00:00:35)
Jenan Jondy introduces herself as the facilitator and outlines the session's goals and the organization behind it.

Jenan Jondy, principal of Education Access Consulting, introduces herself as the facilitator of the session on behalf of the Southwest Michigan Planning Commission. She explains her role and the session's purpose.
Pre-Session Announcements (00:00:45)
Important pre-session announcements are made, including registration, resources, and surveys.

Before starting the session, Jenan Jondy makes several announcements. Participants are encouraged to sign in, explore free resources on the back table, and fill out post-session surveys. Snacks and beverages are also available.
Civic Learning Session Series Overview (00:01:25)
The Civic Learning Session series is introduced, highlighting its focus areas and objectives.

Jenan Jondy describes the Civic Learning Session series, which aims to provide balanced, research-informed perspectives on key areas such as data centers, farmland preservation, and housing affordability. The sessions are designed to inform future community discussions and planning.
Introduction of Expert Panelists (00:02:30)
Dr. Sarah Mills and Dr. Rex LaMore are introduced as expert panelists for the session.

Jenan Jondy introduces Dr. Sarah Mills, a professor of practice at the University of Michigan, and Dr. Rex LaMore, director emeritus at MSU Center for Community and Economic Development, as the session's expert panelists. Their backgrounds and expertise in urban and regional planning are highlighted.
Dr. Sarah Mills' Presentation on Data Centers (00:03:14)
Dr. Sarah Mills begins her presentation on data centers, discussing her background and the guide she developed.

Dr. Sarah Mills starts her talk by confessing her relative newness to data centers, despite her expertise in urban and regional planning. She describes the process of developing a guide to answer common questions from local governments about data centers, drawing on her experience with renewables.
Basics of Data Centers and Their Impacts (00:07:02)
An overview of data centers is given, including their structure, types, and the growing demand for larger facilities.

Dr. Sarah Mills explains what data centers are, their components, and the different types, ranging from small server rooms to large hyperscale facilities. She discusses the increasing demand for larger, more resource-intensive data centers driven by technological advances.
Classifying Data Centers by Size and Ownership (00:10:02)
Data centers are classified by size and ownership, distinguishing between hyperscale, edge, enterprise, and co-location centers.

Data centers are categorized into hyperscale and edge based on size, and into enterprise and co-location based on ownership. Hyperscale centers serve as cloud factories, while edge centers provide localized data access. Enterprise centers are owned by single entities, whereas co-location centers lease space to multiple clients.
Sales and Use Tax Incentives for Data Centers (00:11:56)
Michigan's tax incentives for data centers are explained, highlighting the requirements and differences between qualified and enterprise incentives.

The video discusses Michigan's sales and use tax incentives for data centers, differentiating between qualified data center facilities and enterprise data centers. The requirements for each type, including co-location and investment levels, are outlined, along with the benefits and risks associated with these incentives.
Key Factors for Data Center Development (00:16:45)
The factors data center developers consider when selecting sites, including electricity, land, and zoning, are discussed.

Developers look for access to electricity, especially transmission lines, backbone fiber, and contiguous land areas. They prefer cleared land, favorable zoning, and lower millage rates to minimize costs and maximize efficiency.
Data Centers' Impact on Electricity and Rates (00:18:49)
The potential impact of data centers on electricity usage and rates is explored, with insights into regulation and uncertainties.

Dr. Sarah Mills discusses the electricity demands of data centers and how they affect grid capacity and rates. She covers the role of the Public Service Commission in regulating utilities and the uncertainties around how data centers might influence electricity costs for other consumers.
Water Usage and Environmental Considerations (00:24:50)
Different cooling methods for data centers are explained, along with their varying water and energy impacts.

Data centers can use evaporative cooling, closed-loop systems, or air cooling, each with different environmental footprints. Evaporative cooling uses more water but less electricity, while closed-loop and air cooling systems reduce water usage but increase energy consumption, posing a trade-off between resources.
Regulation and Environmental Impacts of Data Centers (00:27:19)
Regulatory frameworks for data center water use and air quality are covered, highlighting the roles of EGLE and utilities.

The regulation of data center water withdrawals by EGLE and the impact on air quality from electricity production and backup generators are discussed. The importance of managing emissions and the role of flexible loads in reducing environmental impacts are emphasized.
Land Use and Quality of Life Impacts (00:30:02)
The potential impacts of data centers on land use, farmland, and local quality of life are examined.

Data centers may affect farmland use and sensitive natural features. While their direct impact on farmland is minimal, the energy required for their operation could have broader implications. Additionally, construction and operational impacts on local communities, including visual changes and noise, are considered.
Understanding Sound Frequency and Zoning (00:31:49)
Discussion on how the frequency and constancy of sounds can affect zoning laws, especially when comparing day and night sounds.

The speaker elaborates on how the frequency and constancy of sounds, not just their loudness, can impact their perception and how these factors should be considered in local zoning regulations. They argue that night sounds differ from day sounds due to environmental noise levels.
Economic Impact of Data Centers (00:32:18)
Exploration of the economic impacts of data centers, highlighting job creation and tax exemptions.

The segment discusses the economic benefits of data centers, including construction jobs and permanent employment opportunities. It also covers state sales and use tax exemptions that are offered due to the promise of job creation. The variability in job estimates, from direct to induced jobs, is also mentioned.
Taxation and Revenue of Data Centers (00:33:06)
Details on how data centers are taxed and the implications for local property tax revenues.

This section explains how data centers are taxed as commercial properties, including real and personal property taxes. The discussion covers the depreciation of computer equipment and how the replacement of servers can lead to fluctuating property tax revenues.
Leasing Land for Data Centers (00:33:45)
Advice on leasing land to data centers, emphasizing tax responsibilities.

The speaker advises private landowners on leasing their land for data centers, drawing from renewable energy experiences. They stress ensuring that the data center is responsible for paying taxes and suggest that most land for data centers is purchased rather than leased.
Zoning Laws and Community Benefits (00:35:02)
Insights into zoning laws related to data centers and the importance of community benefits.

The segment explores zoning laws and the Michigan Zoning Enabling Act (MZEA), noting that lawful land uses cannot be banned if there's a demonstrated need. The importance of reasonable regulations and community benefits in zoning practices is highlighted.
Data Center Size and Impact (00:36:54)
Distinguishing between different sizes of data centers and their respective impacts.

The discussion focuses on differentiating data centers by size, particularly based on their electricity usage, which correlates with their environmental impacts. Larger data centers, which use more electricity, are expected to have greater negative impacts.
Moratoria on Data Centers (00:38:00)
Explanation of moratoria as a tool for communities to pause and plan for data center developments.

The concept of moratoria is introduced as a legal tool to temporarily halt data center development while zoning ordinances are updated. The necessity of making progress during the moratorium period and consulting legal advice is emphasized.
Recommendations for Data Center Zoning (00:39:02)
Suggestions for zoning practices regarding large-scale data centers and industrial uses.

The speaker recommends zoning large-scale data centers as industrial uses, aligning them with existing industrial districts. Consideration of infrastructure needs and surrounding land uses is recommended to mitigate potential impacts.
Quality of Life Regulations (00:40:21)
Proposing quality of life regulations for data centers and other industrial uses.

The segment suggests adding quality of life regulations to all industrial uses, including data centers. These regulations could address issues like sound, screening, and light pollution, especially in areas adjacent to residential neighborhoods.
Decommissioning and Responsible Development (00:41:31)
Discussion on the importance of planning for the decommissioning of data centers.

The presentation covers the crucial aspects of decommissioning data centers, including having a decommissioning plan, financial instruments like surety bonds, and agreements on when and how decommissioning will occur to prevent new brownfields.
Community Benefit Agreements and Accountability (00:52:00)
Exploration of community benefit agreements and the importance of accountability in economic development.

The speaker emphasizes the role of community benefit agreements (CBAs) in ensuring that developments like data centers provide tangible benefits to the local community. The need for accountability and transparency in economic development activities is highlighted, with examples from various U.S. cities.
The Impact of Development on Local Communities (01:03:43)
Discussion on the misconception that development drives away bad developers and the role of neighborhood advisory committees.

The conversation begins with addressing the common misconception that certain development policies might drive away unwanted developers. It is argued that only bad developers are deterred. A significant investment has been seen, and numerous neighborhood advisory committees have become involved, suggesting a more community-oriented approach.
Cleveland's Unique Development Checklist (01:04:09)
Cleveland uses a checklist approach for development, focusing on community participation and capacity building.

The Cleveland ordinance differs by using a checklist developed through community participation, requiring developers to meet specific requirements based on the development's scale. Cleveland has also implemented a unique approach by requiring developers to train local communities, aiming for future community-initiated developments.
Community Investment Funds and Development (01:06:01)
Exploration of community investment funds and how developers contribute to them as part of community benefit agreements.

The segment discusses community investment funds, which are generated at the community level to support local development. Developers are encouraged to contribute to these funds as part of community benefit agreements, facilitating local investment and development.
Pros and Cons of Community Benefit Agreements (01:07:56)
Exploration of the advantages and disadvantages of community benefit agreements in development projects.

The speaker outlines the benefits of community benefit agreements, such as lowering transaction costs and improving job creation, while also noting potential drawbacks like slowed development processes and challenges in legal enforceability.
Challenges in Monitoring and Enforcing CBAs (01:10:12)
Discussion on the difficulties of monitoring and enforcing community benefit agreements over time.

The discussion highlights the challenges in ensuring the promises made in community benefit agreements are kept, especially when community organizations may lack the resources to monitor compliance effectively. The role of local government in this process is emphasized.
Strategic Considerations for Successful Development (01:15:29)
Key strategic considerations for successful development and community benefit agreements are outlined.

The speaker advises on strategic considerations for development projects, emphasizing the importance of a favorable local development climate, well-represented interests, partnerships with government, and proper enforcement and monitoring mechanisms.
Q&A Session on Development and Community Benefits (01:17:02)
A question and answer session addressing various aspects of community benefit agreements and development projects.

The session opens the floor to questions from the audience, covering topics such as decommissioning agreements, investment in the grid, and water use in development projects. Experts provide insights based on their experiences.
Final Remarks and Closing Thoughts (01:35:00)
Final thoughts on the importance of planning and strategic use of brownfield sites for future development.

In the closing remarks, the speaker emphasizes the importance of strategic planning and utilizing brownfield sites for development, urging communities to prepare for future opportunities by leveraging existing resources and infrastructure.
Challenges in Data Center Planning (01:35:52)
The speaker discusses the challenges of planning for data centers, including fiber availability and reusing heat. Economic development should be community-friendly.

The discussion focuses on the various challenges faced in planning for data centers. The speaker highlights that some areas will have fiber infrastructure while others will not, and that planning is essential to effectively assess and utilize existing resources like heat generated by data centers. The planning should not just be about preparing for challenges but also about promoting economic development that aligns with community values and needs. The speaker emphasizes that economic development should be beneficial to the community and involve being a 'good neighbor' to ensure sustainable growth.
Accountability for Brownfield Sites (01:37:02)
Brownfield sites arise from lack of accountability for cleanup. The community pays for redevelopment, highlighting the cost of past abandonment.

The speaker discusses the issue of brownfield sites, which result from a lack of accountability for companies that initially developed these areas. When companies abandon sites, the financial burden of cleanup falls on the community, which increases the cost of redevelopment. The speaker urges the community to learn from past mistakes and ensure future developments are not abandoned, leaving the financial burden to future generations. This involves negotiating end-of-life plans for developments to ensure sustainability.
Rural vs. Urban Development Challenges (01:38:00)
Rural areas face challenges in development due to limited resources. Urban areas often receive priority, leaving rural voices unheard.

The discussion highlights the challenges rural areas face compared to urban centers in terms of development. Due to limited financial resources, rural areas often get less attention and development compared to cities like Detroit and Cleveland. This disparity leaves rural communities feeling ostracized, as their needs and voices are often overlooked. The speaker emphasizes the need for local municipalities and governments to be better informed and resourced to advocate for their communities effectively.
Support for Rural Communities (01:39:00)
Efforts are being made to support rural communities through grants and readiness programs, but challenges remain in capacity and volunteer availability.

The speaker mentions efforts by the Office of Rural Prosperity to support rural areas through programs like rural readiness grants. However, challenges persist, such as the lack of capacity and sufficient volunteers in rural communities to implement and benefit from these programs. The speaker, who identifies with rural roots, is committed to advocating for these communities and ensuring that they have the tools and support needed to thrive.
Legal and Negotiation Challenges (01:40:00)
Legal challenges arise in negotiating projects, with local governments often at a disadvantage against well-funded corporations.

The discussion focuses on the legal challenges faced by local governments when negotiating projects with large corporations. Local municipalities often have limited budgets for legal counsel, making it difficult to compete with well-funded corporate lawyers. The speaker suggests strategies like using escrow accounts to cover legal fees and emphasizes the importance of sharing information among communities to level the playing field. This approach can help ensure that local governments are better prepared for negotiations.
Information and Resource Accessibility (01:41:30)
Efforts are made to centralize information about data centers, making it accessible for local communities to make informed decisions.

The Southwest Michigan Planning Commission is working to compile comprehensive information about data centers and make it accessible through an online tool. This initiative aims to provide local communities with the resources they need to make informed decisions about data center projects. By centralizing information and making it easily accessible, the commission hopes to empower local governments and residents to engage more effectively in discussions and decision-making processes.
Infrastructure Maintenance Concerns (01:43:00)
Planning for infrastructure maintenance is crucial, as neglect can lead to long-term issues. Capital improvement plans are often overlooked.

The speaker emphasizes the importance of planning for the maintenance of infrastructure such as water and sewer systems. Many communities lack capital improvement plans, which are essential for anticipating the costs of maintaining and replacing infrastructure over time. By failing to plan for these expenses, communities risk facing significant issues in the future, similar to the Flint water crisis. The speaker calls for improved planning practices to ensure sustainable infrastructure management.
Community Empowerment Through Information (01:45:00)
Providing communities with information and resources can help them negotiate better terms with developers and plan for future needs.

The discussion highlights the importance of empowering communities with information and resources to negotiate effectively with developers. By understanding the potential impacts of projects and having access to legal and technical support, communities can secure better terms and ensure that developments align with their needs. The speaker mentions the availability of templates and agreements to help reduce legal costs and facilitate negotiations. This approach aims to balance the relationship between communities and developers, ensuring fair and sustainable outcomes.
Final Remarks and Community Engagement (01:46:30)
The session concludes with a focus on continuing community engagement and gathering feedback to improve resources and support.

The session wraps up with the speakers thanking participants and emphasizing the importance of ongoing community engagement. Feedback from the community is sought to refine and improve the tools and resources being developed. Participants are encouraged to take advantage of available materials and to continue the conversation within their communities. The session also stresses the importance of learning from past experiences and preparing for future challenges by staying informed and proactive.