The University of Delaware abruptly terminated its lease agreement with The Data Centers, LLC. TDC had planned to develop a data center on the Science, Technology & Advanced Research (STAR) Campus. The decision came after a working group from the University determined the project was not a good fit.
The CEO of Data Centers questioned whether the UD could walk away from the ease. Even critics of the project said the university might have to settle with TDC.
“TDC is disappointed in the statements contained in the university’s press release Thursday morning, Data Centers CEO Gene Kern stated. “ TDC disagrees that the university can terminate its ground lease for the reasons stated. We are evaluating TDC’s options. TDC remains committed to developing a first class data center within the state of Delaware.”
That statement and rumors making the rounds led to speculation that a version of the proposal could appear elsewhere in the state. Despite the opposition in Newark, the project had strong support in a number of quarters including Legislative Hall, where some funding was temporarily denied. It Aso exposed a growing rift between UD and organized labor, a strong supporter of the project. Union members have claimed that the university has favored out of state companies in construction projects.
City officials and council members had been harshly criticized by foes of the project led by Newark Residents Opposed to the Power Plant. The group, relishing a complete victory in the dispute, held a celebration at UD late Thursday afternoon. Click here for the City of Newark’s response to the decision.
Speculation had been building that the project would be dropped amid stiff opposition from neighbors over construction of a natural gas-fired power plant. It remains unclear as to the effect of the decision on efforts to bring other businesses to the campus and the effect on the overall business climate of the state. The project had the support of much of the business community and Gov. Jack Markell. Kelly Bachman, spokesman for the governor, issued the following:
“Appropriately the university conducted an extensive review of the facts and came to the determination that this project is not a good fit for the STAR campus. The governor remains interested in working with UD to develop that site in a manner that will create jobs and strengthen Delaware’s network of science and technology businesses. “
The Caesar Rodney Institute, a conservative public policy group based on Dover, offered the following response:
“This means the Sierra Club and their supporters have won and the Data Center will not be built. While there were legitimate questions about the company which wanted to build the power plant for the Data Center and they were evasive on certain aspects of their proposal, the fact is Delaware desperately needs in-state electrical generation and this is yet another step backwards. Not having in-state electrical generation means your electric bill will keep going up and up.”
Delmarva Power, the state’s largest utility, took no position on the power plant that could have sold as much as 30 percent of its power on the open market.
Delmarva Regional President Gary Stockbridge said the project wasn’t essential to the health of the area’s electrical grid.
Meanwhile, construction is nearing on a natural gas power plant that would be roughly four times the size of the Data Centers power plant near Rising Sun Maryland, about 25 mies west of Newark. That plant is being built by Old Dominion, a supplier to electric cooperatives. Also, Calpine is building a gas-fired power plant in Dover that is expected to ease supply concerns.
The Data Centers is a veteran-owned West Chester-based start-up company. An earlier proposal from a predecessor calling for a project at Rowan University in New Jersey was dropped by that institution.
The project had ween major opposition within the university, which has researchers focusing on offshore wind power as a generation source. Research has indicated that massive projects off the East Coast could supply much of the region’s power needs.
The report did seem to hold the door open to a data center that would use the current electric grid coupled with back-up power.
There was also the question of whether the project had ever been able to obtain the massive amount of amount of financing required in making it a reality. Data Centers was slow to adopt the use of websites, social media and other communications tools. Opponents were quick to adopt such methods, despite limited resources.
Along the way, the university had maintained an arm’s length relationship with the project, declining comment last year when news of the development first came to light when developers were seeking a state infrastructure grant. In addition, the university never put its media resources to work in discussing or promoting the project.
The decision came after an analysis of TDC’s plans, by the UD Working Group. The findings concluded that the proposed facility, which included a 279-megawatt cogeneration power plant, I was not consistent with a “first class science and technology campus and high quality development to which UD is committed.”
View the report PDF on UD’s website.
“The university is committed to providing economic development opportunities for the region and state,” says UD President Patrick T. Harker. “Moreover, it is extremely important that development on the STAR Campus, which is held to the highest standards, is appropriate both for the short and the long term, and that future generations of students will have a top-quality education. We have carefully examined The Data Centers’ plans, and have determined that they are not a good fit for the STAR Campus.”
The Working Group was made up of UD faculty and administrative leaders, who are engaged in STAR Campus projects and have content expertise. After investigating—with the assistance of outside consultants—the overall quality of the facility plans, the size of the power plant and the potential effects of resulting greenhouse gases and other pollutants on the environment, the group unanimously recommended to university leadership that plans to support such a facility should not be approved on the STAR Campus. That recommendation was endorsed by the provost and executive vice president, and the president concurred.
Harker added, “The University of Delaware values its partnership with the community of Newark and recognizes how important a vibrant and welcoming atmosphere is to our goals and mission and to our students. We have been impressed with the level of passion, input and discussion surrounding this project. This is what makes a college campus exciting—students, faculty and community members are able to freely express themselves.”
“The University of Delaware remains committed to developing the STAR Campus to support cutting-edge research, provide educational and professional opportunities for students, foster innovation and create jobs to enrich the community.” Harker concluded
