Tag Archives: development

Where data centers will end up when some community leaders see them as providing benefits, others see them as threats

Posted on by

There are already thousands of data centers in the United States and more to come. Some community leaders say they benefit their community:

Photo by Sandeep Verma on Pexels.com

The recently approved CyrusOne data center in Sangamon County is projected to bring $500 million in capital investments to the county. Marc Ayers, a former Sangamon County Board member, said it’s estimated to generate $5 million to $6 million in property taxes annually, with around $98 million in tax revenue over the next 20 years…

DeKalb Mayor Cohen Barnes said the Meta data center that has been operational since 2023 has contributed significantly to the city with community investments and around $250,000-300,000 in utility taxes…

Barnes said the data center in DeKalb employed more than a thousand union construction workers over the five years it took to build. Now, he said there are hundreds of permanent jobs working on tech, electricity and maintaining the HVAC systems.

Other local leaders describe the downsides:

Property tax revenue from data centers can be significant, but many say the massive centers aren’t worth the millions of gallons of water they consume or the stress they put on an already struggling electric grid. The ComEd territory in northern Illinois, for example, has enough large-load energy projects in its queue to more than double the amount of energy demand in the territory by 2040…

John Laesch, the mayor of Aurora, said the five operational data centers in his community have provided generous tax payments, but those benefits don’t outweigh the downsides data centers can bring to communities…

“But during our public hearings, we heard residents ask, is that $1.6 million worth the noise pollution and the strain on our power grid and potential long-term risk to our climate?” Laesch said.

With these different perspectives, are there and will there be clear patterns in which communities have data centers and which do not? With land uses that can be controversial, will most or all communities say no or will there be certain kinds of communities that approve data centers?

Given some existing patterns, these might be some fault lines:

-Communities with residents with higher incomes and higher levels of education vs. those with lower levels

-Communities who are seeking out new economic and development opportunities vs. those who are not

-The political leanings of local officials

-Communities with pro-business/jobs/growth/construction coalitions vs those where such coalitions have a lesser presence

-Metro areas with a stronger presence of big tech companies versus places that do not

I would bet some of this could be answered already but it would also be interesting to see what happens now with companies and communities having the advantages of seeing what has already happened and what might work for getting the outcome they want.

Trying to imagine an older church building with an active congregation at the center of a new development

Posted on by

Inspired by this article regarding an older church building and congregation on the site of what could soon be a big development effort on Chicago’s west side, I was thinking about when major development might include a church building in a prominent spot. Not just preserve a landmark building or provide space that might be used by religious congregations. New development centered around a religious building.

Photo by Czapp u00c1rpu00e1d on Pexels.com

These do not always go together in the American context. Churches and religious congregations are religious groups and community organizations. They do not generate jobs and revenues like businesses do. They do not pay property taxes. Churches may have been at the center of early European settlements in the United States but many of them moved as residents left commercial cores and the land became really valuable.

In new developments, developers might provide land for religious congregations or set aside land for such purposes. But put a religious building at the center? Imagine a new subdivision or condo building where a prominent place is given to a religious group – unlikely.

Maybe the only way this could happen is if the situation is similar to the article cited above: there is a historic congregation and building present and developers want to build something new. Construction could account for and even highlight the long-time congregation.

Another option: what if the development is led by or facilitated by a religious congregation? Imagine they have additional land and they want to stay. They could sell the rights to some of the land, stay put, and be there when the significant new development occurs. Or they undertake the development themselves, building around their own presence.

Americans united in not wanting to live near data centers

Posted on by

NIMBY responses to data centers are bringing Americans together:

Photo by Mathias Reding on Pexels.com

Lyon Township voted for Donald J. Trump in 2024, but party loyalties hardly seemed to matter. In an era when Americans are divided on everything — even the cars they drive and the TV shows they watch — data centers seem to have bridged the partisan divide.

Early evidence suggests that Americans — once agnostic — are now souring on them. Last month, Maine became the first state to pass a moratorium on data centers — only to have the governor, a Democrat, to veto it — and similar measures have been introduced in at least 13 other states and dozens of municipalities.

In Virginia, a recent poll found the public had turned sharply against data centers. The same is true in Wisconsin, said Charles Franklin, director of the Marquette University Law School Poll, which found that around 70 percent of people now say the costs outweigh the benefits.

Even more interesting, he said, the state’s deep partisan divide seems to have vanished when it comes to data centers.

I am a little confused why this is pitched as bridging political divides when there is a longstanding pattern in local American politics of residents resisting perceived threats to their property values and quality of life. If the American Dream continues to involve homeownership, often in suburban communities, residents will express concerns or protest strongly if a proposed nearby development will be near their homes.

Perhaps this is harder to see or remember when either only national politics are important or all local politics are seen as extensions of national politics. Local politics can often be about local interests. Locals are not necessarily opposed to growth and development – after all, growth is good in the American context – but they often do not want development that significantly changes their local experience.

At the same time, fewer Americans might be opposed to data centers in the abstract. If they want to use their AI powered devices and platforms, don’t these have to be built somewhere? This is common to NIMBY responses: people might acknowledge the need for a particular land use but few want it located near them.

Taking the NIMBY approach to taxes

Posted on by

As someone who studies suburbs, I am familiar with NIMBY responses to proposed development: residents do not want it near their dwellings, even if they agree it probably needs to be built somewhere. I was reminded of this common response when I read a description of how Americans feel about taxes:

Photo by Mark Youso on Pexels.com

Over the past decade, the share of Americans who believe that their income-tax bill is unfair has climbed by 14percentage points. A majority of Americans, in both parties and at all income levels, say that they are kicking in too much. The National War Tax Resistance Coordinating Committee, which teaches people how to conscientiously object to income levies, reports surging interest in its training sessions. Grassroots groups around the country are fighting to “ax the tax.” Most people want rates to go up—just not on them.

Someone should pay taxes, but not me. I like the government programs I participate in (if they even know they are government programs – see later in the article) but someone else should fund them. The money should come from someone or somewhere else.

What does this lead to in the long run? On the NIMBY development side, it tends to put a buffer around wealthier communities who have the resources and voice to fight against development they do not want. Would the tax case equivalent be that certain groups are able to avoid higher taxes being placed on them or certain groups are able to obtain tax cuts while others are not?

At the local, state, and federal levels, it will be interesting to see how different taxing bodies try to close budget holes. There have to be some revenue sources – or cuts? – to make ends meet.

Which US states or communities do not rely on population growth and new development?

Posted on by

An article about recent changes in Florida makes this suggestion about the state’s strategy for success:

Photo by Ahsen on Pexels.com

These side-by-side trends could spell trouble for a state whose economy relies on continued population growth and real-estate development.

Not every state and community can have the kind of growth and development run that Florida has had in recent decades. In 1950, the state had 2.7 million people and today has over 23 million people. Air conditioning plus available real estate plus warm weather and natural features plus immigrants plus retirees have contributed to the third most populous state.

But don’t most American places want something like this to happen? It may not be possible due to history, a lack of development and capital, population stagnation or decline, few features that possible residents or businesses would desire. Yet growth is good in the United States. Stuff being built, people moving in, new activity is all good. The places where things are happening are getting ahead, other places are falling behind or are way out of the picture.

If these trends discussed continue, what happens to Florida? Does it become like many other places that want growth but cannot seem to make it happen? Do the new hot states pass it by? Do leaders try to chase new or different opportunities in hoping to revive their glory days of growth? The Florida that looked unstoppable may become an afterthought, all because the focus on growth moves its lens to somewhere else.

What private equity expects from suburban residential developments and “a revenue gap”

Posted on by

A new proposed residential development in suburban St. Charles sparked discussion about the possibility of including affordable housing:

Photo by Ann H on Pexels.com

A 29-acre site in St. Charles — one of the last remaining open properties in town for residential development — is becoming a flashpoint for housing affordability in the city.

With a new proposal on the table, some city officials are requesting affordable units while the project’s developers argue it would hurt their private equity-backed bottom line…

The developers said they are trying to support retail along the Randall Road corridor by “attracting residents with disposable income.” City officials responded by saying there are people who work for the city who can’t afford to live there.

During the March 16 meeting, the developers said offering affordable units, such as a $1,070-per-month studio, would “provide a revenue gap.”

The basics of the story are not unusual for suburban residential development projects. A developer sees an opportunity. Upscale residential units can bring a good profit and upscale suburban communities tend to like residential properties that enhance their status and character. The city responds to the proposal with a few requests, including requesting some affordable housing units for several groups in the community the suburb would like to retain or attract. A period of negotiation or dialogue commences.

What is different here is that the developer has clearly stated that substituting affordable housing units will lead to a revenue problem. Why? Because there are expectations from the private equity supporting the development. The article does not discuss the details (and they may not be publicly available) but it sounds like it can be put another way: not enough money will be made on this development if affordable housing is included.

Profit-making is not unexpected. The clash between private equity money and affordable housing is less often in the public view. What amount or percentage does private equity expect to make on residential development? Can it make room for any affordable housing or is it completely about profit maximization?

Pushing back against the housing plans of the wealthy in suburban Palo Alto

Posted on by

One elected local government official wants to limit what wealthy residents can build in suburban Palo Alto:

View Palo Alto, California Eadweard by thegetty is licensed under CC-CC0 1.0

The proposed legislation would apply to people who buy three or more homes within a radius of 500 feet, roughly the length of a city block. Any construction project expected to last more than 180 days would need a detailed daily schedule of construction work to prove it can be conducted without double-parking vehicles or blocking driveways or bike lanes.

After finishing one construction project, homeowners would need to wait three years to begin another unless a major emergency occurred. Homes could not be vacant for more than six months in any given year.

The proposal relies on neighbors for enforcement, leaving it up to another homeowner or tenant living within 500 feet to file a lawsuit.

The proposal would place new restrictions on private security guards across Palo Alto, not just those serving wealthy homeowners. All security vehicles would have to be marked and permitted by the city. Security guards would have to identify themselves to the public when asked. They would be prohibited from harassing or intimidating passers-by on public property…

The full Palo Alto City Council is likely to take up Mr. Stone’s proposal in January or February. Mr. Stone said he is confident that a majority of the seven-member council, which has taken a keen interest in housing affordability, would support the general framework but could send it to a committee or city staff member for refinement. It could take six months or longer to reach a final vote, he said.

Three things strike me about this proposal:

  1. It is clearly aimed at particular residents. Not just people with some wealth, who might be found across American suburban communities, but people who are truly wealthy and can afford this kind of construction and property ownership and all that goes with it.
  2. Communities often deal with these concerns at the zoning level. How big can a structure or house be? Are the guidelines in particular areas or in regards to property lines? The proposal above seems to deal with other matters that come along with regular approval of megahouses and properties.
  3. The regulations are about property but local conversations often have to do with local character and community life. Do such homes (and people) fit in the community? Who can live in a place where such properties are common? Who is Palo Alto for? Suburbs often implicitly or explicitly have these discussions while considering development.

Now that this proposal is out there, how do wealthier residents respond and what will the final local regulations be?

Data centers as the largest construction project ever in Indiana

Posted on by

Amazon plans to construct large data center facilities in northwest Indiana:

Photo by Life Of Pix on Pexels.com

Amazon plans to spend $15 billion for the largest construction project in Indiana history, building data center campuses in Northwest Indiana and creating 1,100 new jobs, officials said…

Sites for them have not yet been finalized, although AWS is in negotiations with multiple communities, he said Monday…

Not too many years ago, BP’s $3.8 billion Whiting Refinery expansion was considered the largest construction project in state history. The work at the refinery kept tradespeople working through the Great Recession, Ennis noted. Building data centers will keep tradespeople working in the region for years to come…

This project’s impact on the communities’ tax base can’t be calculated until the communities are chosen and incentives are finalized, but the impact will be huge. When Microsoft chose LaPorte for a $1 billion data center, Mayor Tom Dermody said it would effectively double the city’s tax base.

Indiana is not the largest state in size or population but it is not the smallest either: it is 38th in land area and 17th in population. So I think it means something that this would be the largest project in the state’s history. The amount of money, work, and land is worth noting.

The article mentions briefly that some Indiana communities have said no to data centers. Others seem interested (as noted above). I wonder if data centers and less desirable land uses will cluster in red states or certain communities where they are seen more as business opportunities rather than community liabilities. If tech companies say they need data centers, presumably some places will approve their construction.

In this particular case, what if some of the data center activity that could go in the Chicago suburbs located in Illinois ends up in northwest Indiana? Will some Illinois and Indiana communities look back and think they missed an opportunity or will they be grateful they had the foresight to say no?

The amount of building going on in the US to support AI

Posted on by

Perhaps contrary to those who argue the United States struggles to build, an AI construction boom is underway:

Photo by Victor Moragriega on Pexels.com

Many people believe that growth will only continue. “We’re gonna need stadiums full of electricians, heavy equipment operators, ironworkers, HVAC technicians,” Dwarkesh Patel and Romeo Dean, AI-industry analysts, wrote recently. Large-scale data-center build-outs may already be reshaping America’s energy systems. OpenAI has announced that it intends to build at least 30 gigawatts’ worth of data centers—more power than all of New England requires on even the hottest day—and CEO Sam Altman has said he’d eventually like to build a gigawatt of AI infrastructure every week. Other major tech firms have similar ambitions.

Listen to the AI crowd talk enough, and you’ll get a sense that we may be on the cusp of an infrastructure boom.

Throughout American history, growth is good. Construction is a sign of growth and provides jobs. A new industry is underway. Society is progressing. Data centers are all over the place (and will end up somewhere even if some communities do not all them). Americans are used to booming construction as this happened across housing and numerous industries throughout the country’s history.

What that growth might lead to is another matter. How do these data centers contribute to communities and landscapes? Do all the data centers in suburbs transform suburban life? When the growth slows, what happens then? Will the data centers still be there in 50 or 100 years or will they be vacant properties?

All this is a reminder that while many Americans will encounter AI through devices and data going through the air, it has a significant physical footprint. To power real-time AI responses to whatever we as users need requires buildings, land, resources.

When a suburb declines a train station along a proposed passenger line

Posted on by

The Chicago suburb of Huntley is a little more than 50 miles from downtown Chicago. With the planned opening of a new passenger rail line from Chicago to Rockford, here is how city officials responded:

Photo by Cody King on Pexels.com

Huntley officials confirmed Friday that the village has decided against having a train station come to town.

Huntley had been slated to have a stop on the Chicago-to-Rockford rail line that’s expected to start operations by 2027, but the village recently notified project leaders they no longer wanted a station.

Village officials cited potential parking and traffic issues, among other things, downtown as well as uncertainty with ridership numbers and village financial commitments…

In nearby Marengo, which isn’t scheduled to have a train stop despite the rail line going through the center of town, the City Council has expressed its support for having the train stop there.

For a long time, suburbs would have wanted a stop on a commuter rail line. This offers nearby residents – in the particular community with a stop but also residents in nearby communities – opportunities to go to the city. Not having a train station means other communities could benefit from the commuting options and the business and residential opportunities that might go with it.

But the reasons cited above suggest a railroad today might be seen as more trouble than its worth for suburban communities. Parking and traffic concerns come up with any new development. Ridership and money figures could be hard to forecast.

I wonder if another matter at play is the rapid growth of the community in the last few decades. As late as 2000, the suburb had 5,730 residents. In the 2020 Census, the community has 27,740 residents. Would a train line contribute to that change? Might it encourage denser development around a train station, something that has happened near numerous Chicago suburban train stations?

Also, the community already has transportation options. It is along a major highway, I-90, to and from Chicago. Residents can access train lines to Chicago in the nearby suburbs of Elgin or Cary, roughly 25 minutes drive away, if they really want a train.

Still, I wonder if the suburb will regret not having a train stop. The train will run through the community anyway; would a train station disrupt life that much and/or might it add something for residents?