Updated: Study sees millions of dollars of tax benefits, thousands of construction jobs from data center

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Gene Kern discusses the Data Centers project
Gene Kern discusses the Data Centers project

A study, commissioned by The Data Centers Inc., says construction of the $1.1 billion project on the University of Delaware STAR campus will generate millions of dollars in tax revenue and create thousands of jobs.

The study was conducted by Econsult Solutions, a Philadelphia consulting firm with  ties to The Wharton School of the University of Pennsylvania and other academic institutions, according to a release.  Data Centers, based in West Chester, Pa., wants to build and operate the Wolf Technology Center 1 at the STAR campus, the former Chrysler plant site.

Econsult examined economic impacts on the state, New Castle County, the City of Newark and the Christina School District that would be associated with construction of the data center project.

“Thousands of data points are considered in a decision to build a project of this magnitude and we have looked at it from every conceivable viewpoint,” said Gene Kern, CEO of The Data Centers. “This study quantifies the spectrum of long-term and substantial benefits that will accrue to Delaware and the Newark community from this project.” Findings include:

– 4,770 union construction workers will be needed to build the project, Wolf Technology Center 1 generating $283 million in direct payroll during the two and a half year construction phase.

-The project will create 290 permanent data center jobs and 50 part time jobs on site.

– TDC tenants will bring an additional 300 positions (either their own employees or local hires) to the facility, for a total of 640 positions. Those jobs will generate an estimated payroll of $38.5 million.

– Those new jobs will spawn local demand for goods and services, requiring creation of an additional 320 jobs in Newark and the surrounding area generating a payroll of about $15 million.

– The State of Delaware will collect $20 million in taxes during construction and another $4.5 million annually from TDC operations.

– The City of Newark will collect $4.7 million in one-time permit fees.

– In addition, approximately $840,000 in fees will be paid to DELDOT, DNREC, UD, Norfolk Southern and Amtrak.

– The project will generate $8 million in annual property tax revenues, including $5.1 million for the Christina School District and $1.8 million for the City of Newark.

– TDC will spend $18 million to build a new electrical substation, that will be owned by the City of Newark, on the STAR Campus.

– TDC will spend $210 million on the expansion of natural gas infrastructure that will benefit other businesses in the area, as well as The Data Centers.

– The project will add $15 million in new fiber optic infrastructure, both feeding into the site and on the STAR Campus itself.

The Executive Summary of the report is posted on www.thedatacenters.com.

The release of the study comes after a flurry of claims by opponents of the project who are upset about plans to build a natural gas-fired power plant that would allow the data center to operate at all times. About 20 percent of power could be sold on the open market.

The Data Center was also a key issue in the recent race for mayor in Newark, with candidate Amy Roe falling short in a bid for the post, after running on a platform that included  uncompromising opposition to the project. Polly Sierer, who said she would keep an open mind on the project, won the seven-candidate race with a narrow victory over Roe.

Roe, a fixture at Newark City Council meetings,  vowed to continue to speak out against the project.  The city is expected to rule in the near future  on whether zoning for the project can include the power plant portion of the project.

Opponents have criticized the city and the University of Delaware for not keeping residents informed about the project.  Economic arguments against the project have centered on what is viewed as lower unemployment rates in Newark when compared to the rest of the state and the possibility that most workers would not reside in Newark.

By contrast, union workers have lobbied for the project with door hangers, phone calls  and literature, leading opponents to object to the practices.  The city has said the distribution of literature is allowed under  the U.S. Constitution.

Other objections have ranged from pollution levels to the possible use of natural gas from hydraulic fracturing of “fracking” in Pennsylvania.

Of late, the group No Newark Power Plant  has objected to the use of noise monitoring equipment in areas near the  Data Center. Opponents have argued that noise levels will rise sharply in the area if the project  and even demonstrated to City Council members what they see as excessive noise levels. The noise levels claims have been viewed as misleading by backers of the plant, who point to many noise muffling technologies and the fact that the site formerly housed a noisy auto plant for a half century.

Other critics have claimed that steam from the plant will create a “microclimate change” in areas around the plant. – Doug Rainey

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