BOZRAH — The first coach made it clear the city badly needs the $3.5 million in revenue from a proposed large-scale data center, but city residents hit back with concerns about noise and traffic. potential costs to the city if the center is built.
NE Edge is proposing to construct a 980,000 square foot building – an area equivalent to approximately 22 football fields – to house a data center on over 280 acres of contract land in Bozrah, with a planned entrance for Haughton Road offshore of Route 2.
Seeking to take advantage of a state incentive program that allows large data centers to avoid paying local property taxes if they agree with the city on an annual fee in lieu of taxes, NE Edge offered to pay Bozrah $3.5 million a year, plus a 2-3 percent annual escalator that would be tied to the consumer price index.
At a public hearing at Fields Memorial School on Wednesday night, residents asked how the $3.5 million fee was decided. First Selectman Pianka told them that was the number offered by NE Edge to the city and that the properties that NE Edge is under contract to purchase are currently contributing approximately $1,800 per year in taxes.
NE Edge project engineer Jim Rossman said the “average” hyperscale data center would require between $200 million and $800 million in investment. To qualify for a 30-year tax deal, at least $400 million would need to be invested in the center.
Rossman said they would optimistically expect construction to begin in 2025 after several rounds of state and local approvals, and construction would take around 18 months – although he acknowledged that could be delayed. The first payment would be due one year after the center received its certificate of occupancy.
Several residents questioned why the fee was not over $3.5 million. While that’s a significant boost to the city’s budget, it’s only a fraction of what a $400 million development would pay in property taxes, and residents said they expect that part of the revenue would have to pay for things like new fire equipment that would be needed. to cover such a large development.
Christopher Regan, head of acquisition and planning for NE Edge, said the developer is responsible for paying all infrastructure development and upgrade costs, including any new electrical infrastructure such as a sub- station that may be required to power the installation. Rossman said these costs must be borne entirely by the developer and cannot be passed on to Bozrah’s electric customers.
Regan said $3.5 million was the same fee the company agreed to pay Griswold in a fee agreement signed about 10 days ago. So far, Griswold is the only city NE Edge has an active fee agreement with, Regan said.
Connecticut’s Department of Economic and Community Development is responsible for reviewing these agreements and verifying that proposals meet tax relief requirements and that funding is aligned. Developers must enter into an agreement with a city before seeking state approval, and no agreement has been approved by the state at this point.
“We treat every city the same,” Regan said.
Pianka – acknowledging that he was putting his reputation on the line by supporting the proposal, said he could not imagine another opportunity that could bring Bozrah this type of income.
He said the revenue is badly needed because the budget is already tight and the city faces future capital expenditures and the possibility of having to switch from a volunteer fire department to a professional fire department. due to the backlog of volunteering.
Pianka also pointed out that the data center would not have the obvious environmental impacts of large chicken farms which are another major taxpayer in the city.
“It has always been said in our various board and committee meetings – Bozrah wants clean business,” Pianka said. “We want clean business. And it doesn’t get any cleaner than that. I know I sound like a salesman, but I really am not. What do we complain about every year? Flies, the smell of manure, droppings and all that sort of thing.
But locals pushed back against the idea that the environmental impact would be minimal. Many worried about the constant noise the data center would produce. Neighbors of data centers across the country have complained about noise from massive centers.
Residents of Bozrah were concerned about the impact noise from the proposed NE Edge center would have on its neighbors, including the Odetah Camping Resort – another major taxpayer in the town.
Rossman said the facility would use diesel generators, but only as emergency backup in the event of a power grid outage and for monthly drills. The agreement stipulates that the generators cannot be used for peak shaving.
Pianka and NE Edge representatives pointed to the requirement for a noise monitoring protocol in the proposed deal – something that was not included in the GotSpace deal. This forces NE Edge to retain the services of a noise control engineer to develop a “sound monitoring protocol”.
They would measure baseline noise levels at the property line of the nearest residences – or closer if they received permission from neighbors to measure on their properties – and then offer sound and vibration controls that would need to be approved by the city.
Rossman said “acceptable” noise levels would be determined between the company and the city in the zoning process, where neighbors could step in. Rossman said the restriction is enforced by contract and the city could seek damages from the court if the restriction is broken.
Many locals were unconvinced by Rossman’s assurances, continuing to question him about the noise throughout the two-hour meeting.
Pianka gives full support, but the locals decide
This is the second effort by a company to develop a data center in Bozrah after the Connecticut General Assembly last year approved new tax incentives for data centers to locate in the state. .
The Board of Selectmen approved a fee agreement with GotSpace, but the company stopped participating in the zoning process amid internal disputes, and its application for a floating zone to allow its development was denied without prejudice as a result.
Pianka told CT Examiner that GotSpace could have reapplied for zoning approval, but did not. And now NE Edge – led by former GotSpace CEO Thomas Quinn – has stepped in, seeking a deal to try to develop a data center on the same property, he said.
NE Edge and Gotspace tried to get approval from data centers in Wallingford, Bozrah, Griswold, Norwich, Groton. The common denominator is that they are served by municipal electric utilities, not the state’s two major utilities, Eversource and United Illuminating, Pianka said.
Bozrah is served by Bozrah Light and Power, a subsidiary of Groton Utilities.
“It was like that when Liquid Carbonic – also known as AirGas – came to Bozrah because of the [lower] electricity rates 30 years ago,” Pianka told CT Examiner. “They came here and we had the same tone back then. And he turned out to be a very strong taxpayer.
The main difference between the deal the Board of Selectmen had previously reached with Gotspace and the proposed deal with NE Edge is the royalty each company would pay to Bozrah.
Gotspace reportedly pays $1.5 million per year, while NE Edge deal offers $3.5 million annual fee for 980,000 square foot data center
Pianka told CT Examiner that the fee is the reason the Board of Selectmen backs NE Edge’s proposal. Without considering options to limit the city’s tax burden, Pianka said Bozrah’s budget was “dead in the water”.
Last year, he said the city had used “every possible method” to cut or refinance spending. Now there are no tools other than an inevitable tax hike or a new taxpayer, he said.
Combined, Bozrah’s top ten taxpayers pay about $890,000 a year, Pianka said — a fraction of the payment NE Edge would make each year. The $3.5 million payment would also equal about one-third of the city’s total budget, including schools, he said.
“It’s not something I look at lightly,” Pianka told CT Examiner. “There are a few issues that go along with it – nothing comes for free – but it’s certainly something the Board of Selectmen wholeheartedly approve of, purely because of the ultimate tax burden otherwise. We see nothing else to the horizon that can help mitigate the inevitable tax increases.
Pianka told residents at Wednesday’s meeting that the Selectman board would consider their feedback and make any necessary changes to the proposed deal before bringing it to a town meeting and city-wide referendum. town.
If the city votes to approve the fee agreement, it would be the first step toward NE Edge developing a data center. The company would still need zoning approval – including a zoning enactment amendment to allow data centers in a commercial zone, an interior wetland review and site plan approval.
“There are a bunch of hurdles beyond this hosting deal that would have to be met for this to move forward,” Pianka said. “It would not be the green light if this hosting agreement was signed.”