Tag: data center

Rethinking Staunton Crossing

(Reading time: 4 minutes)

Much of tomorrow’s (April 9) Staunton city council meeting, which starts at 7 p.m., will be focused on next year’s budget and proposed increases in utility fees, neither of which is insignificant. But an even weightier matter, because of its long-term repercussions, will be taken up by council members at their work session preceding the regular meeting, when they will be presented with a long overdue “business plan update” for Staunton Crossing. What’s unclear is whether the “update” will include a reexamination of what should be built on this rather expensive chunk of real estate.

For the uninitiated, Staunton Crossing is a 300-acre site at the intersection of I-81 and U.S. 250 that is readily identified by its million-gallon water storage tank, perched on a concrete pillar abutting the interstate. The city purchased this acreage back in 2009 and spent nearly a decade figuring out what to do with it. A comprehensive design was finally prepared by the end of 2018, and millions of dollars have been spent before and since to pave the way for . . . well, that’s the question. Because while this project inched along, the rest of the world was hurtling into a once unimaginable future.

Case in point: one of the four core businesses envisioned for Staunton Crossing was, and is, a data center of the sort that has exploded across the country generally, and in Virginia most notably—indeed, the state now leads the nation with 579 such centers. As originally designed, Staunton Crossing’s data center would total more than 800,000 square feet, far exceeding the square footage occupied by offices (375,000), retail (162,300) or advanced manufacturing (a paltry 13,000 square feet). Various alternative options were also advanced, but in all of them the data center component remained unchanged—and, apparently, unchallenged.

There are several problems with this, not so much because of bad planning but because what seemed reasonable in 2018 is at least questionable today. Less than a million square feet of data center space might have seemed ambitious eight years ago, but today it’s quite a bit on the small side. The proliferation of data centers, primarily in northern Virginia but in other parts of the state as well, not only makes the Staunton site unremarkable but puts the city at a disadvantage for an industry that tends toward clustering. Most significantly, the metastasizing and increased size of these centers has highlighted just how environmentally taxing and destructive they are, driving up electricity and water consumption—and rates—while threatening air quality with their reliance on fossil fuel generators for back-up power.

The precarious state of Staunton’s water supply has been widely chronicled, due both to the aging-out of its supply infrastructure and because of our repeated drought alerts. Local electricity rates, meanwhile, have started climbing after years of being noticeably below those of other states, with Dominion Energy’s overall prices growing 11.6% over the past year and the generation portion of its bill increasing 16.8% over the same period, largely due to rising demand from all those energy-sucking data crunchers. Over the next year, Dominion ratepayers can expect to see another rate hike of around $11 a month.

There are, in other words, so many red flags popping up around the data center explosion that state lawmakers are mulling a slew of proposed regulatory and legislative constraints, raising the possibility that they will make Virginia an increasingly unattractive option for the industry. The feeling in Staunton should be mutual, but whether tomorrow’s business plan update will go in that direction remains to be seen. One line in the power-point presentation prepared by the Timmons Group is suggestive: on the “Current Trends” slide, item 4 is “AI Site Elimination vs Site Selection.” My vote would be for the first half of that equation.

One final note, sparked by that same slide. No. 6 on the list of current trends is the perennial question, “Where will my employees live?” Ironically, the original discussion of what should go into Staunton Crossing included the possibility of workforce housing—a possibility that was inexplicably dropped, with no known record of the thinking behind the exclusion. Eight years later, that looks remarkably short-sighted.

Staunton Crossing dissonance

(Reading time: 4 minutes)

When it comes to its plans for Staunton Crossing, the city is being less than forthright. Coy, even.

Making this evident was session six of Staunton Citizen University, held last week and focused on all things economic. That, of course, meant paying special attention to Staunton Crossing, the hugely ambitious but largely vacant crown jewel in the city’s efforts to gin up economic development.  With its roots dating back to 2009, when the Staunton Economic Development Authority (EDA) shelled out $15 million in a land swap with Western State Hospital, Staunton Crossing now represents an investment of roughly twice that amount. The number of jobs attributed to Staunton Crossing over the past 16 years? Perhaps 200—and some unknown number of those aren’t new to Staunton, since they merely involved a move from one city location to another.

At its best, then, the money sunk into Staunton Crossing currently works out to a per-job cost of approximately $150,000. That’s hardly a bargain, and even less so considering that most of those jobs are on the low end of the wage scale: desk clerks and housekeepers at two hotels, food servers and salesclerks at a handful of fast-food franchises and retail outlets. But to be fair, the Crossing still has another 275 empty acres just waiting for someone to move in. And city officials say that could mean more than 3,000 additional jobs coming to Staunton, resulting in an enormous shift in any cost-benefit analysis, so perhaps it’s still early days when it comes to doing the math.

But that’s where the coyness comes in. What new businesses is the city trying to recruit, and at what additional cost?

Among the six types of industries advertised on Staunton Crossing’s internet pitch is “logistics and transportation,” which sounds an awful lot like a warehouse distribution center. That’s low-hanging fruit, one might imagine, given the Crossing’s touted “easy access to the East Coast and Midwest” because of interstate and railroad proximity. But apparently it’s also forbidden fruit, at least for now. Asked when a large tenant for the Crossing might be recruited, economic development director Amanda DiMeo responded that a warehouse operation could have been landed “yesterday” if that’s all the city was after. Clearly, there’s hope that there are bigger fish to fry.

Which brings us to the second questionable industry on the Crossing wish list: Data Centers & IT. When it comes to recruiting this latest “must have” industry, the EDA marketing push goes all out in playing the environmental hazards card without any apparent irony. Staunton Crossing, declares its website, “is a prime location for data centers due to its low risk of natural disasters. The area is not prone to earthquakes, hurricanes, or severe weather events, which can disrupt data center operations. This provides peace of mind to organizations that rely on the secure and continuous operation of their data centers.”

And that’s not all! Staunton Crossing has an irresistible supply of low-cost and reliable electrical service, according to its website. It has state-of-the-art fiber internet infrastructure. It has “a large pool of highly educated and experienced IT professionals,” which might be expected to raise  quizzical eyebrows among the relatively sparse IT workforce currently in the city. But notably lacking in this recitation of virtues is any mention of the copious amounts of water that data centers require, although the website does give assurances elsewhere that the city can provide 2 million gallons a day.

And that’s a problem.

Two million gallons a day represents the entire output of one of the city’s two major water sources, drawn from the headwaters of the North River in the George Washington National Forest.  The possibility of such an outsized claim on a critical natural resource, in an age of global warming and greater weather instability, including droughts, has not gone down well with community residents with a less boosterish outlook. There have been rumbles of discontent—which may explain a curious comment about the matter by Rodney Rhodes, the city’s director of community development.

Speaking immediately following DiMeo’s presentation, Rhodes led off with the observation that Staunton’s zoning ordinance does not permit data centers. Any attempt to bring in such a center therefore would require that the zoning code be amended—and that, he assured the class, would be “a hard slog.” Not impossible, of course. But hard, so nothing to get excited about.

Nothing to see here!

And yet, why would Staunton keep chasing after a substantial capital investment that its own rules do not permit? Does the question answer itself? A substantial capital investment of the sort represented by a data center wouldn’t provide much in terms of permanent employment, but it would add handsomely to the tax base. And given the many millions already spent on the Crossing with remarkably little return to date, the promise of a big chunk of tax revenue might be expected to transform a hard slog into a greased done-deal.

As I said: coy.

Let’s not send water into the cloud

(Reading time: 7 minutes)

Sometimes it’s hard to grasp just how quickly the world is changing, and how slow we can be in adjusting. Perhaps that’s not a big deal on a personal level. Tell people you don’t use a cell phone or go on social media and they’ll just think you’re quirky, or old. But being out of step becomes a really huge deal when it involves spending millions of dollars and making decisions that will have a ripple effect for decades.

Case in point: that ambitious effort to attract investment dollars, currently marked by a towering column just 350 feet off I-81, known as Staunton Crossing. By this time next summer the concrete pillar will be crowned by a ginormous billboard advertising the city, painted onto a 1-million-gallon water storage tank that will be 70 feet in diameter and, at its top, 240 feet above the ridge on which it sits.  A critical structural failure would make one helluva splash on the highway below.

The aesthetics of such boosterism come down to a matter of taste and judgment, but there should be less subjectivity regarding the water tank itself, which together with its ancillary plumbing carries a hefty $10 million price tag.  Who knew a cistern in the sky could be so expensive? For context, $10 million is enough to replace approximately one-fourth of the 13 miles of pipeline that supply Staunton with its drinking water—including, ironically, the water that will fill the new tank. Replacing the pipeline is becoming a critical issue because it’s more than a century old, but where the city will obtain $41.5 million to do the job, or an additional $8 million to drill backup wells, is anybody’s guess.

Meanwhile, although there are plausible reasons to build a new water storage tank on the east end of the city, the primary impetus for this massive venture is Staunton Crossing itself. And, more specifically, a desire by city officials to include a so-called “data center” on its freshly primed real estate. Why the scare quotes around “data centers”? Because the label, while conveying a cutting-edge sense of cleanliness and efficiency, obscures the fact that these contemporary data factories are voracious consumers of power and water, more accurately described as resource vampires.

Offices and manufacturing plants—the development’s other proposed tenants—also need water and electricity, of course, but data centers really need them. The master plan for Staunton Crossing calls for 375,000 square feet of data center space, projected to require 187,500 gallons of water a day. That compares to more than twice as much proposed square footage for manufacturing, which  would require only 12% more water—or a proposed 605,000 square feet of office space, using a mere 60,000 gallons a day.  (Moreover, most of the data center water evaporates, which means less is available for recycling—good for the sewer system, but not so good for water conservation.)

The planners who conceived this project knew all that, of course, which is why their top infrastructure priority was water. “Prospects need to know that pressure and capacity are adequate for their needs,” they wrote. “Nothing else matters more than water, particularly in the area of manufacturing and data center pursuits.”  Ergo, the water tower, enabling the city to assure business prospects that it can deliver 2 million gallons a day, as well as 4.2 megawatts of power.

But that was six years ago, and as noted at the top of this column, the world is moving ever more quickly. What seemed like a reasonable concept in 2019 has become increasingly outdated, as computer users from the smallest to the largest increasingly turn to “the cloud”—an ethereal marketing term for data centers—for their data storage needs. More recently, the post-Covid ascendance of energy-hungry artificial intelligence (AI) has blown up all previous forecasts of national power consumption.

Based on their projections for Staunton Crossing, the planners were envisioning a 10-megawatt data center, which at that time was an average size for the centers that were sprouting up in northern Virginia. But the reason why Ashburn, for example, today has 133 data centers is because these smaller centers need to cluster around a high-speed network infrastructure to reduce latency, a critical aspect of a seemingly seamless “cloud.”  On this side of the Blue Ridge, on the other hand, we still have areas without decent internet service, never mind the kind of fiber connections that would enable cloud computing.

AI’s massive energy needs, meanwhile, require hyperscale centers measured in the hundreds of megawatts. One such center currently in development in Culpeper, for example, will have 1.4 million square feet providing initial support for 216 megawatts of critical load, eventually expandable to 432 megawatts. That’s clearly a whole new ball game, in which Staunton Crossing can’t compete.

These limitations suggest that the Crossing’s quixotic pursuit of a data center won’t get out of the starting gate, too small for a hyperscale center but too isolated to plug into the cloud network. Indeed, it’s worth noting that while much of the marketing strategy behind Staunton Crossing has been to emphasize its proximity to two interstate highways, a railroad and Virginia’s inland port in Winchester, absolutely none of it addresses virtual connectivity. So: nothing to worry about, right? Unless, of course, it’s to fret about the time and money wasted on ill-fated marketing efforts, or on building a possibly over-engineered water tank.

Still, there’s always the danger that these sorts of projects take on a life of their own, lurching onward long after someone should have cut off their heads. And putting a data center in Staunton, while of debatable value in 2019, makes even less sense today. Although we’ve had a relatively wet spring and early summer, Staunton had repeated drought warnings and advisories the previous several years, underscoring the city’s vulnerability to water shortages in an age of ever more extreme climate change. Meanwhile, the 4.2-megawatts of electricity that Staunton Crossing currently promises won’t begin to address the energy needs of a data center (or a serious manufacturing plant, for that matter), which means Dominion Power will be expected to build a new transmission line—with construction costs distributed among current users.

What would Staunton get in return? Once a data center is up and running, relatively little. Local employment, as measured by vehicle trips per day, would be a scant 375, as laid out in the master plan—compared to more than 5,000 a day for a manufacturing plant, and 6,400 to 11,000 a day for office workers. More vehicle trips, more local employment.  The other potentially significant upside could be the tax revenue generated by such a capital-intensive project, were it not for the fact that taxing data centers has become a race to the bottom. Or as Staunton Crossing’s planners advised the city, slashing taxes for data centers would signal the industry “that it is specifically desired in Staunton.” Maybe that’s a signal we shouldn’t want to send.

At the very least, it would be prudent for the city to revisit the Staunton Crossing master plan and determine if changing circumstances have rendered some of it obsolete. Ditch the idea of having a data center. Perhaps revisit the idea of incorporating housing into the plan, a concept that was part of the original planning but then inexplicably dropped, and one that subsequently has become more urgent. Safeguard a precarious water supply.  

We’d still be left with one of the state’s biggest billboards, so it won’t have been a total loss. (Sorry, Lady Bird.)