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Welcome back to Cityspeak.
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I'm your host, Christopher Jordan.
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I'm the AI and Innovation Program Manager at the National League of Cities.
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Cityspeak gives listeners an insider's view of what local leadership in America means today and features conversations with government leaders and policy experts regarding the biggest issues and challenges facing America's cities, towns, and villages.
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Data centers have quickly become one of the most consequential local issues in the country.
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More than 3,000 currently operate in the United States, and over half of the world's hyperscale or AI data centers are located here.
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A recent Gallup poll shows that 70% of Americans oppose data centers in their community, and communities are responding differently.
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NLC research has found that at least 120 communities have adopted moratoria on data centers, and 60 have passed new zoning regulations this year.
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Joining us today on Cityspeak are three passionate guests representing data center public policy and two local officials leading their communities through different paths.
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The Epicenter makes it easier for policymakers to access and incorporate scientific evidence into their decision-making processes.
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They are nonpartisan and do not advocate for particular policy outcomes.
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Kate Stoll, welcome to Cityspeak.
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Thanks, Chris.
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Glad to be here.
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So data centers have been around for a while, but they've become a much bigger topic of conversation recently, obviously.
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What's driving all this increased attention to data centers?
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Yeah, I think there's a couple major factors here.
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The first one is this the rapid pace of growth.
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That's getting a lot of people's attention.
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And a lot of the growth of data centers is due to the boom in artificial intelligence.
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In fact, the biggest data centers, which are called hyperscalers, are mostly being built for AI.
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So it's all happening really fast, and people feel like they can't keep up.
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And like, you know, one day you haven't even heard of data centers.
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The next day they're they're popping up in your backyard.
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You're hearing about them all over the news.
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And it's it's hard to get a handle on what to think about them.
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And I think that's partly
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due to the second major factor that's driving attention here.
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And that's a lot of like lack of transparency about the impact of data centers.
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So not knowing what's coming for your neighborhood, you know, like what what how is this going to impact me?
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Um and people aren't feel like they're getting really the information they want when they're figuring out whether they want a data center or not.
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Um, and so that's the word trying to be helpful, working um with National League of Cities and others to help bring some of that clarity and information about the impacts of data centers, the pros and the cons.
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Yeah.
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So speaking of the transparency and some of the mystification on data centers, um, or just some of the points, you know, where people might not understand.
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Um so, you know, on the outside, these facilities look like large windowless boxes like warehouses.
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But uh, can you tell us more about what happens inside a data center and what should local leaders understand about how these facilities operate, um, how they might differ in size, resource use, or any other characteristics of note?
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Yeah, absolutely.
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So if you kind of take the lid off the data center and look inside, you're gonna find a few major categories of stuff.
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So the first one is there's gonna be lots of servers.
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These are networked computers.
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They do all the work, whether it's artificial intelligence training or inference, asking the artificial intelligence to do do some job for you, or providing internet services, or streaming video.
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So that's that's all in these servers.
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We'll talk about that more, I'm sure, in our conversation.
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There's also data storage units.
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That's where you know all the data that lives in the the so-called cloud lives.
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That's the pictures of your kids and your dogs and your cats, et cetera.
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Then, of course, there's networking systems that control where the data moves, keeps it secure.
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Um, and then there's power systems.
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So getting electricity to those computers and making sure that it's constantly there and it's it's always available, including the backup generation that they have at data centers, um, which can be uh diesel generators, in some cases could be batteries.
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Um, so making sure that there's always power available.
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And then cooling systems are an important factor of data centers too, because the computer chips inside those servers produce a lot of heat.
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And if they overheat, they get damaged and everything goes wrong.
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So the cooling systems in data centers are really essential for keeping them running.
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And you asked about, you know, what's the difference between different kinds of data centers?
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And the amount of power and water that they use can vary a lot across data centers.
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So um, in general, they do tend to use a lot of power and water.
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Um, and that's one of the reasons why sometimes traditional zoning practices in uh, you know, that have been around for decades don't always fit um how a data center might impact a community.
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Um and so like a small data center might draw like a few megawatts, like maybe a data center that's like um serving just one single business, or it can go all the way up to hyperscalers that can range from 100 megawatts on the small end to like multiple gigawatts on the large end.
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And I think it helps to put that in perspective because most people aren't like, oh, I know what 100 gigawatts means or a megawatt means, but um if you're thinking about like a small hyperscaler, 100 megawatts, um, uses about the amount of electricity as 80,000 US households.
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Um and then if you think about the the water use, which is mostly used for cooling, if you think about how much a big hyperscale data center might draw, they might draw between one and eight million gallons of water per day.
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That's on the the hottest days of the year, the peak water use.
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And to put that in perspective, a town of about 15,000 people, their municipal water supply has a capacity around like four to five million gallons.
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That's for everything, whether it's residential, industrial, uh, fire, all the all the water needs of the city.
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So it really depends on the size of the data center, the cooling system they're using as to how much energy and water they're pulling on any given moment.
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That's a super helpful overview.
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Thanks.
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There's also been a lot of discussion about the siting of the data centers.
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You mentioned quickly about some of the zoning updates of reclassifying these from warehouses to having new definitions for data centers.
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But could you tell us more about where these are popping up around the country?
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Um, you've mentioned water and energy use as factors uh that might influence development.
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Um, what what other factors tend to
influence where developers choose to locate uh proposals for these data centers?
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Yeah, so um to answer the first question, uh the most data centers in the US right now are located in Virginia.
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Virginia is the hotspot of the country and actually of the world in terms of who has the most data centers right now.
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Um that's followed by Texas and California.
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If you look at which state has the most data centers in the works or coming online soon, Texas is growing faster than any other state.
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Um, we're also seeing noticeable growth in the Great Lakes areas.
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Um and there's also uh like hot spots around like Phoenix and Atlanta have a fair amount of data centers as well.
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Um and yeah, you said energy and water are major factors uh determining whether or not a data center is wants to be sited in any particular location.
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Uh it's I think it's important to emphasize that access to power is like the number one determinant for data centers right now as to whether or not they're gonna make it to market and they want to get to market as soon as possible.
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So getting access to power is their number one uh consideration.
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Um and then they're also thinking about will they be able to plug into fiber optic lines so that you know data transmission can be fast between the data center and the and the rest of the cloud.
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Um, you mentioned water, of course, they need access to clean water, especially dependent on which kind of cooling system they're using.
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Um and they're also looking at factors like how likely is a natural disaster or really bad weather that could interrupt their service at any location.
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So that's why you'll see some of these really big AI data centers that they use to train their models located out in the desert.
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There's not gonna be a hurricane, there's like a pretty low chance of earthquake.
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So that's one of the reasons they're thinking of.
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And then another important factor when it comes to locating in a rural setting or an urban setting is access to labor.
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So will they be able to find the workforce to build the data centers and operate the data centers?
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And then one more factor that's been of increasing importance lately is just the potential for local opposition from the community.
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I think that's another consideration that data center developers are thinking about these days.
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So the NLC and the Epicenter recently developed a resource on key questions for local leaders
considering data centers.
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What are some of the key issues local governments should consider when evaluating a potential data center project?
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Yeah, in these key questions to ask when considering the data center in your community, this resource that we developed with UIT National League of Cities, and we consulted a lot of scientists to really figure out, okay, what are the main factors that communities need to be thinking about and asking about?
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We chose, you know, five categories, um broad categories.
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The first one's just kind of like general considerations like uh noise abatement or what's the land already used for?
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What's the how big is the data center?
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Um, what is it gonna, what's the flavor of the data center?
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Is it AI, is it cryptocurrency, et cetera?
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Um, and then another big category is energy use.
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So figuring out what's the source of the electricity, are they bringing their own power?
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Are they plugging into the grid?
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Um, and importantly, what's the anticipated peak power draw on those hottest days of the year when the grid will probably be stressed with a lot of people running the air conditioning, for example.
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Um, the third major category is water consumption.
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And again, always emphasizing to think about the peak water consumption.
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Um, that's when the most people are using water and the municipal uh capacity might be maxed out and you might run into trouble.
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The fourth one is I think a lesser known consideration, which is air quality.
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So, in a lot of cases, data centers use backup generation in the form of diesel or methane generators, and these produce uh particulate matter, different emissions that are unhealthy uh for people to breathe in.
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So, thinking about what is the type of backup generation, are they using the cleanest generators possible?
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How often is air emission, uh, are air emissions being measured, for example, and how close are they to houses and other schools, hospitals, for example?
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And then an important and big category is the economics of data centers.
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So, um, how much tax revenue will they bring in?
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How many jobs will they create?
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Um, and who's paying for possible infrastructure upgrades, whether it's to power or water systems, right?
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Will data centers um pay for some of those upgrades because they have more resource draw?
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Um and some of the the key questions in that category, think about you know, which tax, which taxes actually apply to data centers in your city or your county or your state.
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Um, because the biggest uh capital assets of a data center are actually the stuff inside, all the servers, not necessarily just the land that they're they're sitting on.
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Um and it's important to remember that data centers do create jobs.
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Um the more majority of them.
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Uh the studies show about four-fifths of the jobs created by data centers are in the construction phase, and only one-fifth are in the ongoing operational phase.
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So these are these are questions you could ask of data center developers to get a real handle on what will be the impacts of the data centers, what will be the positive benefits, what will be the drawbacks, with the ultimate goal of bringing more clarity and transparency for communities so that they can make informed decisions for their communities.
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Kate, thanks so much.
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If any of our listeners are interested in following up and learning more about your work and these resources you mentioned, uh, where can they go to find more information?
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Yeah, so the key questions resource, it's free, it's open for anyone to use.
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Um we'll put a link to it in the podcast notes.
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You can also find it on NLC's website if you search under data centers.
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Um, and of course, we also have resources at Epicenter, which is triplas.org slash epicenter.
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Kate, thanks so much for coming on the podcast.
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Thanks, Chris.
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Our next guest is Councilmember Nikki Lee.
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Councilmember Lee is serving her second term representing Ward 4 on the Tucson City Council and brings more than 25 years of experience in technology, cybersecurity, and organizational transformation across the military, local government, the aerospace and defense industry, startups, and Fortune 50 companies.
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A U.S.
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Air Force veteran, she has worked at the intersection of technology, cybersecurity, and national security throughout much of her career.
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She's also helps lead national conversations on artificial intelligence and emergent technology, including through her work with the National League of Cities, with a focus on people-centered, responsible, and transparent technology adoption with meaningful public oversight.
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She's also been a leading voice on hyperscale and large-scale data centers, water security, responsible technology policy, and protecting
critical infrastructure.
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Councilmember Nikki Lee, welcome to CitySpeak.
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Thank you so much.
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Thank you for having me.
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Before we jump into our main topic today, could you tell us a bit about Tucson, Arizona?
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Yeah, well, how much time do we have?
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Because there's a lot of really good things to share about our city.
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We are the second largest city in the state of Arizona.
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We have about 550,000 or so folks who live in our city limits and a little over a million people in our metropolitan area.
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So we are a good-sized city with a very, very rich history, very rich culture, very diverse community, and amazing food.
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So I would highly recommend everyone come visit us when it starts to get cold everywhere else in the country and come check us out.
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Incredible.
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We'll take you up on that offer.
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I hope you do.
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So jumping in here, um, the Southwest in general, including the Phoenix area and Tucson, has become a growing market for hyperscale data centers.
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Could you walk us through the city of Tucson's experience with data centers and uh including the project that was proposed in your ward?
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I appreciate you putting the caveat hyperscale in front of data centers because I wanted to make sure as we start our conversation today, we're framing and distinguishing between the traditional data centers and hyperscale data centers.
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Because I think all of us know that there are data centers that are all over the place, that are smaller in terms of their footprint, that are hosting websites and storing our iCloud photos and doing all of the things that we have become accustomed to in this modern technology in this modern day and age.
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But what we're talking about is those hyperscale data center campuses that are hundreds of acres and huge footprint and that require a lot of infrastructure, new switch yards, lots of water, and just lots of resource to support.
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So I always like to start out my conversation with framing it up that we're talking about that type of project.
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Um, Project Blue here in Tucson, that was uh last summer.
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It was about a$3.6 billion hyperscale data center development proposal that was going to come just across the street from the boundaries of my ward and potentially be annexed into Ward Force.
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So it was right in our backyard.
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And, you know, there were some legitimately positive benefits that would have come with that development, significant construction jobs for a period of time, a smaller number of permanent jobs.
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There was some property tax revenue that we would have looked to collect.
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And one of the bigger things for the city that was on the table was uh significant private investment in our reclaim water infrastructure.
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It would have brought an extended pipeline down to the southeast portion of our city and opened up reclaim water capability for a huge portion of the city that we currently didn't have.
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So, you know, my role in this was to really look at all sides of the coin and make sure that I really understood what was at risk, what were we really getting, how would we mitigate the risks that were in place and what did it mean for the community and really understanding the community's sentiment around this.
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I do think that my background in technology and cybersecurity kind of surfaced as a strength during this process because I think in systems, I think in vulnerabilities, I think in risk.
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And a lot of my work revolved around identifying those risks and vulnerabilities, not just with the development itself, but the vulnerabilities that existed in our policies or lack thereof, specifically around how large water users are regulated.
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I learned during this process that we didn't have a policy on the books.
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Um, and as a state that relies on Colorado River water, it was really important that not only for this type of development, but other developments, that we had some protections in place.
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Um, so ultimately, you know, that was the situation that was in front of us.
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The community was very engaged in the process.
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And um, ultimately we did decide as mayor and council, by direction of the majority of members of our community, decide not to move forward with annexation.
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And that's where we ultimately landed.
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I would love to hear more on that community engagement piece.
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You know, you mentioned, given your background and your responsibilities, wanting to weigh both sides of the coin.
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But could you tell us more about what residents were telling you during that process?
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What were you hearing?
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And ultimately, how did that input and those concerns factor into the decision?
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Yeah, that is a huge part of the conversation.
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And as I reflect on the experience, and I've done that a lot, um, I think one of the biggest challenges that our community and many communities across
the country, from my understanding, have faced was really just a trust deficit at the beginning of the process.
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It seems like a lot of these companies come in under nondisclosure agreements, and that was definitely the case for us.
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I, as one of the elected officials, was not aware that this was even a thing for several, possibly a year or two, until it actually surfaced to me.
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And by the time we got to the point of having conversations with the community, there was already a massive amount of distrust that was at play that significantly impacted the overall outcome of this.
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And I think that really laid the foundation for all the other concerns that the community had.
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The other piece about Tucson and Arizona and the Colorado River basin states is we we hear on the news right now what's happening with renegotiation of the Colorado River.
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We have been in a drought.
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Water scarcity is not new to us.
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The indigenous peoples who lived here long before, um I did for sure, have protected the water.
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We know how critical it is.
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So that culture for us is very much a part of who we are.
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And so anything that comes in and feels like a threat to our water security is going to be met with a lot of resistance because we understand how important water is for survival here.
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So that was a huge part of the conversation that we heard, in addition to the lack of trust.
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And then energy and affordability were another predominant conversation that came up for our community.
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You know, we've seen what's happened in the East Coast and the Southeast with electricity bills and how everyday people have had to kind of subsidize these developments in other parts of the country by their rates going up.
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And our community was very sensitive to that, especially in a time where everything is getting more expensive and our local utility companies are asking for rate increases very often.
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People were not really interested in that.
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So those were some of the common themes that we heard.
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But again, to go back to the trust conversation, and I really keep coming back to this because I think this was really one of the nerves that kept getting touched during this process is just a distrust in government, a distrust in large tech companies, a distrust in AI itself.
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And I think Mark Cuban is talking about this now, and I was saying this a year ago.
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So welcome to the party, Mark Cuban.
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Um, the data centers.
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Really represent to people a physical representation of what AI is.
00:22:05.039 --> 00:22:08.240
And that is impactful.
00:22:08.400 --> 00:22:12.880
It represents potentially job loss, which is people putting food on their tables.
00:22:13.039 --> 00:22:21.920
People are worried about what is what is going to be done with this technology around surveillance and other real human feelings and emotions.
00:22:22.000 --> 00:22:25.200
And so all of that kind of came together for our community.
00:22:25.359 --> 00:22:27.920
And I did a lot of outreach prior to the vote.
00:22:28.079 --> 00:22:31.920
I reached out to people across the political spectrum in my district.
00:22:32.240 --> 00:22:40.880
And when I talked to everyday people, like me and you, all of these issues emerged in various ways.
00:22:41.200 --> 00:22:49.279
And the majority of everyone I talked to, actually 100% of the people I called, did not think that this type of infrastructure belonged in the Sonoran Desert.
00:23:02.240 --> 00:23:08.400
I come from a military and cybersecurity background, and I know that this infrastructure does need to exist.
00:23:08.559 --> 00:23:12.400
There are very real threats that we have out there that we need to be able to counter.
00:23:12.640 --> 00:23:20.319
And for me, I've consistently over the past year been talking about how we need to have a national strategy for where this infrastructure goes.
00:23:20.480 --> 00:23:24.799
There are areas of the country that might make more sense for this infrastructure to go.
00:23:24.880 --> 00:23:30.160
And there's also, we talked about orbital data centers a year ago, and that is getting more traction.
00:23:30.240 --> 00:23:38.000
So for me, I would really love if at a federal level we could have a more structured and strategic approach to where this infrastructure goes.
00:23:38.160 --> 00:23:48.000
Because right now, unfortunately, it's communities all over the country that are having to deal with these developments, you know, as they pop up and it's not well executed.
00:23:48.079 --> 00:24:03.599
And I think if I could wave a magic wand, that is one thing that I would love to see happen is at a national level, we are becoming more strategic in where this infrastructure should go and taking some of that burden off the communities and the locals for having to figure out how to navigate all of this.
00:24:04.079 --> 00:24:15.440
So since the decision on Project Blue, I know that the city spent a long time on a process evaluating what comes next in terms of establishing rules and regulation.
00:24:15.599 --> 00:24:21.039
You mentioned earlier about previously not having a large water user ordinance.
00:24:21.599 --> 00:24:37.039
So as communities are considering various policies on the spectrum from bans and prohibitions to growing moratoria, uh tax incentives and abatements, um, I would love to hear more about the City of Tucson's
ordinance that was recently passed.
00:24:37.200 --> 00:24:47.440
Um if you could tell us about that process, uh, including which stakeholders were important to bring in and engage, and just generally what the city learned during that process.
00:24:47.839 --> 00:25:00.640
Yeah, well, I always encourage all of my colleagues across the country, if you've not started down this journey of putting some ordinances in place, not just for hyperscale, large-scale data centers, but also large water users.
00:25:00.880 --> 00:25:11.200
Even if you live right along Lake Michigan, just think about your freshwater resources and start to think about how you can protect those, because I'm not taking any bit of freshwater for granted these days.
00:25:11.680 --> 00:25:24.960
You know, for us, I think after we went through the Project Blue experience, we wanted to take time to make this process as transparent and accessible and inclusive as possible when we started to create our own ordinances.
00:25:25.200 --> 00:25:29.200
So part of that work involved a whole entire year of doing a lot of outreach.
00:25:29.359 --> 00:25:35.359
We assembled a 13-member technical advisory committee and we wanted to make sure that we had a broad range of voices.
00:25:35.440 --> 00:25:39.279
And we actually wanted to make sure that nobody was ever going to agree on everything in that group.
00:25:39.440 --> 00:25:51.599
So we had land use people, we had infrastructure and utility people, we had environmentalists, we had technical expertise, business and economic development, and other community members that provided different perspectives.
00:25:51.680 --> 00:25:58.400
So we really tried to assemble a very diverse group of people, diverse opinions to help inform this policy.
00:25:58.640 --> 00:26:02.559
And we wanted to make sure that the community was engaged.
00:26:02.720 --> 00:26:09.920
And we provided four different opportunities for community meetings, both virtually and in person, to try to make them as accessible as possible.
00:26:10.079 --> 00:26:12.720
And also we had opportunity for public comment.
00:26:13.039 --> 00:26:19.599
So once that process happened, which sounds really quick, but it was almost a year in scope to really do it right.
00:26:19.759 --> 00:26:28.799
The policy then went through our planning commission study session and a formal review of our planning commission and then ultimately came to the mayor and council for adoption.
00:26:29.039 --> 00:26:35.359
So part of the priorities that Tucsonans have and a lot of other communities have is around water security.
00:26:35.440 --> 00:26:38.960
So we wanted to build in protections for water, climate resilience.
00:26:39.119 --> 00:26:42.720
Tucson is one of the fastest heating cities in the country.
00:26:42.799 --> 00:26:44.559
So we have to keep all of that in mind.
00:26:44.799 --> 00:26:58.720
Environmental protection was another important piece, neighborhood quality of life, noise, light pollution, all of the things that can affect people who live around the data center, transparency, and just really responsible economic development.
00:26:58.880 --> 00:27:06.319
So we took all of those values that the mayor and council hold on behalf of the community and really wanted to make sure that was infused in the policy that we moved forward.
00:27:06.720 --> 00:27:23.279
Councilmember Lee, could you talk a bit about your role in sharing important updates with the community about Project Blue as reporting became more transparent and just about your role in answering community questions?
00:27:24.240 --> 00:27:25.039
Absolutely.
00:27:25.279 --> 00:27:32.799
You know, I am a kind of person that just puts my head down, does the work, and you know, gets the thing done and moves on to the next.
00:27:32.880 --> 00:27:40.480
So I have never been the type of person that spends a lot of time jumping on camera or do or over-communicating.
00:27:40.720 --> 00:27:43.440
I just do what needs to be done, communicate it, and move on.
00:27:43.680 --> 00:27:59.279
So this was one of those times where I instinctively knew that because of the lack of transparency and information and the community response to what little bit of information had already been put out, I needed to be a catalyst for much more communication.
00:27:59.359 --> 00:28:02.960
And I honestly didn't have a lot more information than what the community already had.
00:28:03.119 --> 00:28:13.839
But I still figured out ways to get out and talk to the community, turn my camera on while I was going for a walk and putting out what information I did know and acknowledging that I didn't have all the answers.
00:28:13.920 --> 00:28:15.200
But here is the next step.
00:28:15.359 --> 00:28:16.559
Here's what's happening.
00:28:16.720 --> 00:28:24.799
Um, I took time to document all of the questions that I had come up with, whether it was around noise, water, setbacks, you name it.
00:28:24.880 --> 00:28:33.039
And I put together a really nerdy Excel spreadsheet of over a hundred questions that I had asked of the city, of the developer, of the county, and I made that public.
00:28:33.119 --> 00:28:39.119
And as I got answers to that, I populated that spreadsheet just to make sure that everyone had access to the same information I had.
00:28:39.200 --> 00:28:41.039
And I asked the community, what am I missing?
00:28:41.200 --> 00:28:42.480
Where can I add more questions?
00:28:42.640 --> 00:28:43.359
Where are the gaps?
00:28:43.440 --> 00:28:48.240
And as they provided feedback, I integrated it into the questions and answers that I was getting.
00:28:48.400 --> 00:28:53.119
So I did step out of my comfort zone a little bit, but I knew that that's what this moment required.
00:28:53.279 --> 00:29:07.359
And so through my newsletter, through short little YouTube videos that I created, that is how I tried to step up and fill the void and let people know that the city was paying attention and here's
what we were asking and pulled them into the conversation.
00:29:07.519 --> 00:29:10.799
And originally there was no community engagement planned.
00:29:11.119 --> 00:29:12.000
There was none.
00:29:12.240 --> 00:29:21.039
It was going to go from the county for the land sale directly into a vote to begin an annexation process.
00:29:21.119 --> 00:29:27.039
And there was no community engagement scheduled until after the vote on whether or not we were going to begin the annexation process.
00:29:27.279 --> 00:29:30.880
And I knew, again, instinctively that that was not going to sit well with the community.
00:29:30.960 --> 00:29:35.920
So I worked with the mayor to make sure that we had opportunities for the community to come together and ask questions.
00:29:36.000 --> 00:29:40.079
And we had a couple public forums well in advance of that vote.
00:29:40.799 --> 00:29:41.200
Right.
00:29:41.440 --> 00:29:51.759
So my next question might be a little tricky because every community is different and everyone's taking different approaches to this, and every data center looks so different on the ground.
00:29:52.079 --> 00:29:59.440
But I'm wondering if you have recommendations for other communities as they consider zoning regulations for data centers.
00:29:59.519 --> 00:30:04.640
And what do you think other community leaders should be thinking about based on your experience?
00:30:05.119 --> 00:30:11.519
You know, I think taking a really holistic view of how you approach this is really important.
00:30:11.920 --> 00:30:14.960
You know, there are things that I learned so much during this process.
00:30:15.039 --> 00:30:24.559
You know, we started out focused on water, and then we hear a lot about closed loop systems that use less water, but then there's a water energy nexus that exists.
00:30:24.640 --> 00:30:28.640
So the water is required to create the energy that is then used for the data center.
00:30:28.720 --> 00:30:33.920
So you really have to look at the whole system and not just, for example, water.
00:30:34.079 --> 00:30:36.880
What does the water meter at the site say?
00:30:37.039 --> 00:30:44.640
We have to look at the whole picture on what resources are actually necessary to power and operate these facilities.
00:30:45.039 --> 00:30:53.359
And there are so many elements to all of this work, like backup generation and diesel emissions, and who has the permit for air quality.
00:30:53.680 --> 00:30:56.960
And there is so much to unpack with these.
00:30:57.039 --> 00:31:05.039
So I just encourage our colleagues to look at, you know, along the journey of building this type of infrastructure, who are all the players?
00:31:05.279 --> 00:31:09.759
For example, for us, it was Pima County who has the air permit uh authority.
00:31:09.920 --> 00:31:11.279
They're the health department.
00:31:11.440 --> 00:31:16.000
So for people's health concerns around data centers, that was kind of out of scope for the city.
00:31:16.079 --> 00:31:29.359
So really having those partnerships and including your peer jurisdictions, including all of the right players in the game to have a really well-rounded, thorough approach is really, really critical and engage with your community early.
00:31:29.680 --> 00:31:37.119
You know, I recently read, I think it was a Gallup poll that said about 70% of Americans are opposed to this type of development in their community.
00:31:37.279 --> 00:31:51.279
So the more we can include our community voices and be their representatives, I think is absolutely critical in this moment in time where, you know, these are the moments that help determine whether people are going to trust us as local government officials.
00:31:51.440 --> 00:31:57.279
So it's really critical that we do what we can to address NDA reform.
00:31:57.440 --> 00:32:03.519
That was another big package that I brought forward was understanding how we can have more transparency into what's going on.
00:32:03.680 --> 00:32:18.960
So between the large water users ordinance and the non-disclosure agreement uh reform, those were two of the big things that I took away just to try to make sure the community had more opportunity to evaluate these things as they were coming onto our doorstep.
00:32:19.599 --> 00:32:23.440
Councilmember Lee, thank you so much for your time and your insight.
00:32:23.519 --> 00:32:25.440
Uh, thanks for joining us on the podcast today.
00:32:26.079 --> 00:32:27.279
Thank you so much.
00:32:35.920 --> 00:32:40.640
Our final guest today is Cedar Rapids Iowa Mayor Tiffany O'Donnell.
00:32:40.960 --> 00:32:51.359
She has been involved in organizations across Cedar Rapids focused on building women leaders, helping communities in need, growing arts and culture, and growing the Cedar Rapids business community.
00:32:51.680 --> 00:32:53.599
And she's also the mother of two daughters.
00:32:53.759 --> 00:32:56.079
Mayor Tiffany O'Donnell, welcome to Cityspeak.
00:32:56.640 --> 00:32:58.160
Oh, thank you for having me, Chris.
00:32:58.640 --> 00:33:01.920
Mayor, could you tell us a little bit about Cedar Rapids?
00:33:02.160 --> 00:33:14.319
Could you tell us just a little bit of context first before we dive into this data center subject of just kind of paint a picture for us of what Cedar Rapids is like and what's going on in your community?
00:33:14.720 --> 00:33:15.200
Yeah.
00:33:15.440 --> 00:33:18.319
Well, we are the largest corn processing city in the world.
00:33:18.400 --> 00:33:26.160
So more corn comes in and out of here every day, which tells you a little bit about the big industry that we have here ADM, Cargill, General Mills, Quaker.
00:33:26.480 --> 00:33:29.279
We have very large industry, food processing.
00:33:29.440 --> 00:33:32.799
Um, we're also a town known for Collins Radio.
00:33:32.960 --> 00:33:37.279
Arthur Collins invented the radio that literally transmitted the voice from the man of the moon.
00:33:37.440 --> 00:33:44.880
So Cedar Rapids is an incredibly
entrepreneurial city that has been around 175 years on the Cedar River.
00:33:44.960 --> 00:33:47.599
Okay, so we were built for commerce.
00:33:47.839 --> 00:33:52.400
For example, 18 in the 1880s, Cedar Rapids was not the county seat.
00:33:52.480 --> 00:33:53.519
It wasn't the big seat.
00:33:53.599 --> 00:33:58.400
Our neighboring city was actually the big city, and that's when railroads were wanting to come through.
00:33:58.559 --> 00:34:03.440
Well, the smaller town or that that town at the time said, we're not sure we want that to go through.
00:34:03.519 --> 00:34:08.159
Well, Cedar Rapids said, heck yeah, we want a railroad because we think that's the next thing.
00:34:08.239 --> 00:34:10.079
And we think that's going to bring industry.
00:34:10.239 --> 00:34:11.920
And so raised their hands.
00:34:12.079 --> 00:34:18.320
Uh a group of business leaders back then, you know, stuck their neck out for something they thought was going to be a good bet.
00:34:18.559 --> 00:34:22.079
And our city has continued to do that.
00:34:22.320 --> 00:34:30.320
And uh, in a very entrepreneurial way, uh these types of uh projects are in our DNA.
00:34:30.400 --> 00:34:44.559
And when we talk about data centers as infrastructure, for example, I'm not sure Cedar Rapids, Iowa, the Midwest has had a seat at the table for this country's next chapter more so than we do today.
00:34:44.960 --> 00:34:57.599
These projects are happening in Cedar Rapids, and they're happening, happening in places in the Midwest that, you know, maybe haven't had a conversation about, you know, playing a role in our future since railroads or highways.
00:34:57.920 --> 00:35:19.760
These projects give us once again a seat at the table, not to go unchecked, not with our guardrails, not without good old-fashioned I will pragmatism, you know, and logic, but by God, it aligns with who we are as a city and not just, you know, the industry, but certainly the way that we're prepared with our complex water and wastewater systems here too.
00:35:20.079 --> 00:35:27.920
There's a handful of data centers in Cedar Rapids, uh, including, I know, two hyperscale facilities under construction.
00:35:28.159 --> 00:35:35.840
Um, can you tell our listeners about Cedar Rapids experience with data centers and welcoming them into your community?
00:35:36.239 --> 00:35:37.519
Yeah, absolutely, Chris.
00:35:37.599 --> 00:35:49.039
And I think what's unusual about Cedar Rapids is that the conversations about the two hyperscale facilities, Google and QTS for us, really began in 2019.
00:35:49.199 --> 00:35:53.840
So this was before, you know, any nationwide conversations were happening.
00:35:54.079 --> 00:36:03.440
And it was really on our radar as uh one of certainly the city's largest economic development projects and one of the state's largest economic development projects.
00:36:03.679 --> 00:36:07.519
And the site that was identified was what we called a mega site.
00:36:07.679 --> 00:36:15.920
And I think other states have these where we identify, you know, a thousand plus acres that the city goes ahead and preps for the next big project.
00:36:16.000 --> 00:36:19.760
So this is an industrial area, zoned for industrial.
00:36:19.840 --> 00:36:25.360
Um, like I said, it's over a thousand acres of farmland that was largely unusable for a variety of reasons.
00:36:25.440 --> 00:36:29.360
So that gives you a little context to where it is, near our airport, too.
00:36:29.519 --> 00:36:36.320
Um, and so when when Google began talking to us, we had the luxury of time, if you will, because it was a new project.
00:36:36.559 --> 00:36:44.719
And so as a city, we needed to do our due diligence on what were our capacities from a natural resource standpoint.
00:36:44.880 --> 00:36:50.239
The power company, Alliant Energy, actually owned that property, which is an interesting relationship.
00:36:50.400 --> 00:36:54.960
They actually owned that property and they would be servicing it as a utility.
00:36:55.119 --> 00:37:07.679
So everyone had to do their due diligence to make sure that we had the capacity to satisfy us and the existing users that we had here, as well as certainly, you know, give the companies comfort to know that we could handle it.
00:37:07.840 --> 00:37:09.920
A little bit of context to Cedar Rapids.
00:37:10.159 --> 00:37:15.840
We are the uh the world's largest corn manufacturing city.
00:37:16.000 --> 00:37:23.280
More corn comes in and out of Cedar Rapids, Iowa in in one day than anywhere in the world, which gives you an idea of the industry that we have here.
00:37:23.440 --> 00:37:28.239
We're talking ADM, Cargill, Quaker, um, International Paper.
00:37:28.400 --> 00:37:30.639
I mean, we have big industry here.
00:37:30.800 --> 00:37:35.440
And that's significant because we're kind of set up for projects like this.
00:37:35.599 --> 00:37:39.519
So when you look at, you know, is it is a data center for every city?
00:37:39.679 --> 00:37:41.599
I'm I'm gonna guess probably not.
00:37:41.840 --> 00:37:48.079
Is a data center the way that we were able to set these two up good for Cedar Rapids?
00:37:48.320 --> 00:37:52.079
It absolutely aligns with who we are and the businesses that we have here.
00:37:52.239 --> 00:37:58.800
For example, we've identified that, you know, one data center here uses a third of the water of our largest user.
00:37:58.960 --> 00:38:05.360
So it gives you an idea of the complex water and wastewater systems, the complex infrastructure that was already in place here.
00:38:05.599 --> 00:38:11.599
So we really um, you know, fast forward to 2024, uh, Google moves forward.
00:38:11.760 --> 00:38:17.280
This is at a time when we needed to compete for these projects, Chris, which I think is also very different today.
00:38:17.519 --> 00:38:22.639
There are actually, you know, bans on incentives for these large projects.
00:38:22.800 --> 00:38:25.119
Um, we really needed to compete at that time.
00:38:25.199 -->
00:38:29.840
We're like, like I said, from 2019 to 2024, we had to compete for these projects.
00:38:29.920 --> 00:38:34.159
So we did provide incentives for these, uh, for both projects.
00:38:34.400 --> 00:38:43.679
All of it done with you know, city council approval, making sure that it, you know, complied with all of our zoning development agreements, very public.
00:38:43.920 --> 00:38:49.920
Did a couple of unique things with the development agreement, too, that we hadn't done before because of the size of these projects.
00:38:50.159 --> 00:38:53.039
For example, we put community betterment dollars in there.
00:38:53.280 --> 00:39:03.920
So each company has committed to, for example, um, you know, Google, it's you know,$350,000 a year per year per building, uh, as soon as it's up and running.
00:39:04.000 --> 00:39:06.239
So for a 15-year time period.
00:39:06.320 --> 00:39:08.000
And and QTS is similar.
00:39:08.159 --> 00:39:13.519
Those are for dollars that are that will go out via the city and the city council.
00:39:13.679 --> 00:39:20.079
So again, development agreements that were out in the public, making sure that that people understood what these new projects were.
00:39:20.320 --> 00:39:31.760
Well, fast forward to today, and you know, we had ribbon cuttings and everything else was very public, but now, you know, the community really is asking us, um, you know, when did these projects start?
00:39:31.920 --> 00:39:34.800
And and who made the decisions and and where were we?
00:39:34.880 --> 00:39:46.320
And so we're we're finding that it's really our job as a city to be extremely transparent about what the process looked like, um, how Cedar Rapids did these deals.
00:39:46.559 --> 00:39:50.719
Uh, and it's it's different, I'm gonna guess, than anywhere else.
00:39:50.880 --> 00:39:52.000
And I'll just leave you with this.
00:39:52.159 --> 00:40:03.840
When people ask me about dentist centers, I say I can't talk about data centers anywhere else, but I can talk about them all day long in Cedar Rapids, Iowa, because of the way we were able to tell these companies what we need.
00:40:04.000 --> 00:40:06.559
They were willing and able to comply.
00:40:06.880 --> 00:40:11.199
And so far, we've had really great partnerships with both hyperscalers.
00:40:11.679 --> 00:40:11.920
Right.
00:40:12.079 --> 00:40:20.719
It reminds me of a quote I heard recently that says someone said, if you've seen one data center, you've seen one data center, that they're all very different.
00:40:21.039 --> 00:40:28.960
Um, but just going to the conversation of development agreements, I know that's a topic that is of huge interest to city leaders.
00:40:29.360 --> 00:40:39.840
Could you talk more about the development agreements in terms of how you secure direct benefits for residents and then also how you navigate um trade-offs?
00:40:40.480 --> 00:40:40.880
Sure.
00:40:41.280 --> 00:40:45.039
Uh well, I think the numbers probably tell the best story.
00:40:45.280 --> 00:40:51.679
So to give you an idea of the scale of these projects, I mean, these are multi-billion dollar projects.
00:40:52.159 --> 00:41:02.320
So even with the incentives that we put forward, we will bring in$20 million in property tax, commercial property tax revenue from these projects.
00:41:03.039 --> 00:41:04.559
20 million a year.
00:41:04.800 --> 00:41:05.920
That's with the incentives.
00:41:06.000 --> 00:41:07.920
You know, forget about after 15 years.
00:41:08.320 --> 00:41:12.079
But in 27-28, we will bring in 20 million.
00:41:12.400 --> 00:41:19.440
Currently, our largest commercial property taxpayer pays around five and a half million.
00:41:20.320 --> 00:41:21.920
And that's massive industry.
00:41:22.239 --> 00:41:28.000
So it just gives you a little bit of context to where the relief will fall for citizens.
00:41:28.159 --> 00:41:35.199
It is absolutely our aim to make sure that we can provide, if not static property tax rates.
00:41:35.440 --> 00:41:41.039
You know, it's it's aspirational to be able to actually provide relief on the backs of these companies.
00:41:41.119 --> 00:41:45.519
And we've already seen it, frankly, with our um with our water and wastewater.
00:41:45.760 --> 00:41:50.239
The city owns the water in Cedar Rapids, which is different than other places.
00:41:50.480 --> 00:41:59.519
But we've actually asked these companies to pay for water and wastewater improvements in the millions of dollars to benefit their projects, of course.
00:41:59.760 --> 00:42:02.079
And who else uses the same systems?
00:42:02.239 --> 00:42:04.000
The citizens of Cedar Rapids.
00:42:04.159 --> 00:42:08.880
So we've already provided benefits in terms of innovation and improvements to the water and wastewater.
00:42:08.960 --> 00:42:10.880
From a power standpoint, it's very similar.
00:42:11.039 --> 00:42:28.719
Now, it is Alliant Energy, so I don't work for Alliant Energy, but I can tell you what they've committed to their ratepayers, and that is a five-year freeze on rates, while they also improve their infrastructure, which is used by the citizens of Cedar Rapids.
00:42:28.880 --> 00:42:56.960
So when you talk about uh improving uh utility systems, power utilities, when you talk about uh redundancy, which as a city we've needed based on some natural disasters we've had from you know Derechos to 500-year floods, we will have redundancy in our power systems that we didn't have before because of the improvements that these companies are paying for that they need that, oh, by the way, we also benefit from.
00:42:58.159 --> 00:42:58.639
Right.
00:42:59.119 --> 00:43:08.159
Um and you mentioned earlier just how much this conversation has changed since 2019 when Cedar Rapids was first considering these proposals.
00:43:08.400 --> 00:43:17.039
And you know, you talked a bit about some of the resident concerns already in terms of utility rate hikes and increases and you know, measures to abet that.
00:43:17.119 -->
00:43:30.480
And but I'm wondering, you know, how you've communicated with the public and with residents as as new concerns have emerged in the last year or so related to noise pollution, or um, you know, you mentioned transparency.
00:43:30.559 --> 00:43:32.159
Um the list goes on, right?
00:43:32.320 --> 00:43:40.159
So yeah, I just would love to hear what it has been like um addressing these concerns with residents in your city.
00:43:41.199 --> 00:43:47.519
Well, I think you know, to your point, when you've seen one data center, you've seen one data center, there are some nightmare stories out there.
00:43:47.920 --> 00:43:58.559
Um I I think even the hyperscale projects that we're building in Cedar Rapids look differently than the hyperscale projects that both of these companies built even a year ago, maybe two years ago.
00:43:58.719 --> 00:43:59.760
I mean, innovation has changed.
00:44:00.320 --> 00:44:08.079
I mean, nobody wants to be more efficient and more environmentally responsible than these companies because oftentimes it saves them money as well.
00:44:08.239 --> 00:44:11.440
So I think it's I think it's a very different system.
00:44:11.679 --> 00:44:12.480
Um today.
00:44:12.719 --> 00:44:20.480
That being said, there are terrible stories out there, and citizens have every right to ask questions based on what they've seen happen in other places.
00:44:20.639 --> 00:44:29.920
And I it's the city's responsibility to show our cards, show the citizens what data that we have worked from and the studies that we have done.
00:44:30.079 --> 00:44:39.280
And so you'll find on our city's website, you'll find uh the actual development agreements, um, the timeline of both of these projects.
00:44:39.440 --> 00:44:44.320
You know, I think the more information we can provide, provide the better, obviously.
00:44:44.559 --> 00:44:46.719
Citizens deserve answers to those questions.
00:44:46.960 --> 00:44:52.400
And, you know, frankly, um I like to think that that we have a lot of them.
00:44:52.639 --> 00:44:54.719
Here's what I'm gonna also say though, Chris.
00:44:54.880 --> 00:45:09.920
What I've sort of distilled down is when you answer the questions about, you know, noise pollution, light pollution, for example, when you look at where our facility is, it's absolutely in compliance with the zoning that's there.
00:45:10.079 --> 00:45:20.400
There are EPA regulations, there are you know noise regulations, you know, all of these companies have to comply, and not just on day one to get occupancy.
00:45:20.559 --> 00:45:22.400
They gotta comply every day.
00:45:22.559 --> 00:45:28.079
And the city and the county, frankly, for us, which does things like air quality, um, that never stops.
00:45:28.159 --> 00:45:31.039
I mean, it might even ramp up once they get up and going.
00:45:31.280 --> 00:45:36.880
So you can answer those questions, those environmental questions, um, and the utility questions.
00:45:37.119 --> 00:45:41.039
But when I drill
down on it, it's really a couple of things.
00:45:41.199 --> 00:45:47.199
It's it's a fear of AI, which is real and needs to be acknowledged.
00:45:47.519 --> 00:45:52.559
Um, you know, and I think it's just, it's also um, you know, massive change.
00:45:52.800 --> 00:45:54.320
It's massive change.
00:45:54.639 --> 00:46:05.920
And um those are if we're gonna start talking about, you know, moral issues, you know, I don't get into what Collins Aerospace in Cedar Rapids, Iowa builds for defense.
00:46:06.079 --> 00:46:10.079
I don't get into what, you know, food dyes General Mills uses in their plans.
00:46:10.239 --> 00:46:21.039
You know, it's really our job as a city to make sure that we treat everybody the same and that these companies comply with the regulations and the rules that we've set forward already.
00:46:21.360 --> 00:46:33.119
But uh the question often turns to those, you know, much bigger issues that that really as a municipality, these aren't the questions that we ask with these with these projects.
00:46:33.840 --> 00:46:34.480
Absolutely.
00:46:34.639 --> 00:46:40.480
It is such an interesting issue in that it is an intersection of global meets local.
00:46:40.800 --> 00:46:47.840
You've also got this interesting national conversation about a socioeconomic divide.
00:46:48.320 --> 00:46:50.559
You really do have haves and have nots.
00:46:50.960 --> 00:46:57.360
And these projects, just the sheer, it's hard to wrap your head around these numbers.
00:46:57.519 --> 00:47:00.559
I mean, they really become just numbers on a paper.
00:47:00.719 --> 00:47:06.880
I mean, we asked Google to change the way that they do things for one of their buildings, and it's going to be in the hundreds of millions of dollars.
00:47:06.960 --> 00:47:09.840
And I didn't hesitate for one second to ask.
00:47:10.000 --> 00:47:14.800
And that would be my mesh, my message to to municipalities considering these projects.
00:47:15.119 --> 00:47:16.559
Relationships matter.
00:47:16.719 --> 00:47:21.519
Tell these, tell these companies what you want and what you need.
00:47:21.760 --> 00:47:23.039
Do you get everything you want?
00:47:23.199 --> 00:47:25.519
Sometimes you do, but maybe not all the time.
00:47:25.679 --> 00:47:27.760
And even if you're even if you're halfway there.
00:47:27.920 --> 00:47:37.360
But I think these these data centers have become a symbol of sort of that socioeconomic divide, in addition to the fear of the unknown with AI.
00:47:37.519 --> 00:47:44.159
So once you add those kind of dynamics in the conversation, from my perspective, it can feel sometimes like the facts don't matter.
00:47:44.320 --> 00:47:49.119
You know, I can tell you the studies we've done, I can tell you the water's okay, I can tell you about your power.
00:47:49.199 --> 00:47:58.719
Um, I can tell you it's in an industrial area, I can tell you all that stuff, but that's really not, you know, what at the end of the day, a lot of people are concerned about.
00:47:59.039 --> 00:48:09.360
You've already answered a sort of my last question I have for you, which is on advice to other local leaders that are considering data centers uh in their community.
00:48:09.440 --> 00:48:20.400
You know, you've already said it's not right for every community, there's lots to be mindful of, especially when it's either a very large corporation or could be any kind of data center facility.
00:48:20.559 --> 00:48:28.480
But just in a word or two, what do you think other local leaders should be mindful of when exploring data centers for economic development?
00:48:28.880 --> 00:48:31.119
You have to know who your partners are going to be.
00:48:31.280 --> 00:48:35.519
And I say that multiple times to Google and to QTS.
00:48:35.599 --> 00:48:38.400
I mean, I have CEO cell phones, literally.
00:48:38.559 --> 00:48:44.800
You know, I have communications team cell phones, I have, you know, the site manager's cell phones.
00:48:44.880 --> 00:48:48.159
Um, I know these, I know the people that I'm working with.
00:48:48.239 --> 00:48:56.719
And I think that's extremely important, especially when you're doing things you haven't done before, because I'm here to tell you, surprise, everything isn't perfect.
00:48:56.960 --> 00:49:05.280
You know, we had subcontractors uh digging illegal temporary wells during construction, not getting the proper permitting.
00:49:05.440 --> 00:49:09.679
You know, we had a drone that, you know, hit an airliner, for heaven's sakes.
00:49:09.760 --> 00:49:14.159
I mean, these are these are subcontractor issues, but nonetheless, they're issues.
00:49:14.480 --> 00:49:16.960
I I didn't have to make the first call.
00:49:17.119 --> 00:49:18.559
I got the call from the company.
00:49:18.639 --> 00:49:26.400
And I say that to any leader who's willing to put themselves, you know, out there and believes in these projects as I do.
00:49:26.559 --> 00:49:29.599
I say, oh, every day, don't you dare break my heart.
00:49:29.840 --> 00:49:31.039
Don't you break my heart.
00:49:31.199 --> 00:49:34.079
I gotta know, I gotta know the good, the bad, and the ugly about it.
00:49:34.239 --> 00:49:37.760
And I would just, you know, relationships matter with these projects.
00:49:37.920 --> 00:49:40.000
Communication is everything.
00:49:40.320 --> 00:49:50.079
Local point people are everything, especially when you've got these, you know, these large companies like like Google that have multiple, I mean, so many projects happening at once.
00:49:50.239 --> 00:49:51.519
Uh, relationships matter.
00:49:51.679 --> 00:49:52.800
Ask what you need.
00:49:52.960 --> 00:49:55.519
Ask for what you need, know what you need.
00:49:55.760 --> 00:50:00.320
And and there are some municipalities who put a pause on development.
00:50:00.559 --> 00:50:02.400
And I'm absolutely not going to judge that.
00:50:02.480 --> 00:50:06.320
I'm not a big moratorium gal, uh, but a pause, absolutely.
00:50:06.480 --> 00:50:11.280
Like I said, we had the gift of time in Cedar Rapids because this was kind of a new thing in 2019.
00:50:11.360 --> 00:50:14.639
So we were able to say, whoa, you know, could we, could we do this?
00:50:14.880 --> 00:50:20.480
And we enlisted third-party, you know, researchers to do that, do that kind of stuff.
00:50:20.639 --> 00:50:25.920
So yeah, do your due diligence, good relationships, and communicate with the public.
00:50:26.000 --> 00:50:33.599
The public has to know all that's going on if you want the project to be, to have any shot at being successful.
00:50:33.920 --> 00:50:34.480
Wonderful.
00:50:34.719 --> 00:50:36.800
Mayor O'Donnell, thank you so much for your time.
00:50:36.960 --> 00:50:38.719
Thanks for joining us on Cityspeak.
00:50:38.960 --> 00:50:40.079
Yes, thank you.
00:50:40.400 --> 00:50:50.800
Thank you to today's guests, Kate Stoll, Councilmember Nikki Lee, and Mayor Tiffany O'Donnell for joining us for this in-depth conversation about data centers and communities of all sizes.
00:50:51.039 --> 00:51:03.039
If you're interested in learning more about how cities, towns, and villages of all sizes are approaching data center policy, you can find the NLC Data Center Local Action Tracker at NLC.org.
00:51:03.280 --> 00:51:08.320
Thank you for listening and join us again for another episode of Cityspeak next week.
00:51:15.440 --> 00:51:18.000
Thanks for listening to City Speak with Clarence Anthony.
00:51:18.400 --> 00:51:20.239
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