Tag: Tim Davey

On having a cake and eating it, too

(Reading time: 7 minutes)

Staunton has a coming-of-age problem. Like a teenager who desires to be one of the cool kids by hanging out with a fast crowd, while simultaneously being repelled or frightened by what that might entail, city leaders are tying themselves up in knots over just what they should do about data centers. And as anyone familiar with teenage angst can tell you, getting all wobbly about core values usually doesn’t end well.

Here’s where we are right now:

Just shy of eight years ago—on Nov. 8, 2018—a group of 30 city and business leaders was convened by the  Timmons Group, a civil engineering consulting firm, to come up with a plan for developing a 300-acre economic development site on the east end of Staunton. After a second, similar meeting that tweaked the results of the first, a resulting master plan for Staunton Crossing was approved by city council. The plan envisioned a mix of advanced manufacturing, office, and small retail use—and, yes, a data center.

Eight years later, the master plan remains unchanged even as data centers have fallen into public disfavor, their size and numbers exploding across the American landscape. As loud, voracious consumers of electricity and water, such centers have become widely stigmatized as an environmental burden that exists primarily to serve an artificial intelligence industry viewed with even greater public apprehension. And while the primary purpose of Staunton Crossing ostensibly is to create well-paying jobs, data centers require shockingly few employees once they’re up and running, which begs the question of why the city is pursuing them in the first place.

To be fair, little of that was understood in 2018, when data centers still enjoyed a reputation as a clean industry. But as they’ve proliferated and their hidden costs have become better understood, public concern and opposition have grown nationally and locally. Alarms have sounded, red flags raised. Although the plan for Staunton Crossing contemplates a data center of less than a million square feet, or just a fraction of the size of hyperscale centers capturing today’s headlines elsewhere, that’s still a lot of stress on a city with an aging water infrastructure and on an electric utility with dependability problems. (See here for a good overview of Dominion Energy.) So why even go there?

Moreover, this isn’t a one-and-done. Newly recognized problems associated with data centers keep cropping up, such as the recently announced results of an Arizona State University study that found that the cooling plumes emitted by data centers can raise surrounding community temperatures by four degrees. Or consider industry efforts to deal with the cooling issue by going to two-stage heat exchangers that use far less water—by relying on Pfas “forever chemical” gases. Although the gases are contained in closed-loop systems with no direct emissions, fugitive emissions and the possibility of industrial accidents resulting in environmental releases are raising numerous legal challenges.

Within that context, Staunton’s approach to data centers has been downright two-faced. On the one hand, the city’s marketing materials continue to promote Staunton Crossing as “a prime location for data centers” because of the city’s low risk of natural disasters, as well as the availability of “low-cost and reliable electrical service” from Dominion Energy”—which may come as a surprise to the folks at the Central Shenandoah Planning District, who recently updated  the local hazard mitigation plan and noted just how unreliable electric service has become in our area.

On the other hand, city officials repeatedly try to soothe public concerns by observing—correctly, but misleadingly—that the city’s zoning code doesn’t include data centers as a permissible use in its light industrial and general business areas, which is how Staunton Crossing is zoned. So, for all you nervous nellies out there—no reason to worry. Right?

How weirdly passive-aggressive is that? The city recruits data centers for Staunton Crossing—but placates local concerns about data centers by noting that such uses aren’t allowed at Staunton Crossing.

Such reassurances are obviously superficial, since zoning limitations can be undone by amending the code or via a special use variance. But by clinging to such a hollow rationale for maintaining the status quo, city leaders maintain a “having our cake and eating it, too” position, leaving open the possibility that a data center might fall into their laps without their having to take a position on whether that’s actually a good idea. Were that to happen the zoning issue would then have to be addressed, of course, which would mean public hearings and passionate arguments and lots of hard feelings, but with all that sturm und drang overshadowed by the dangling bait of a multi-million-dollar development proposal that the city itself had solicited.

That sounds an awful lot like a strategy ripped from a teenager’s playbook—the one about begging for forgiveness rather than asking for permission,.

Just such juggling was on display at this past Thursday’s meeting of the Economic Development Authority, which had been expected to include a presentation by the Timmons Group of an updated Staunton Crossing business plan. Such an update was teased in early April, when Tim Davey, the group’s director of economic development, conceded to city council that much had changed since the plan was first approved and that it was long overdue for a face lift. But while he acknowledged that data centers have become enormously controversial, Davey nevertheless urged city leaders to leave the basic marketing mix unchanged, suggesting that there are workarounds for perceived problems—workarounds like, say, a small nuclear reactor to meet data center energy needs.

Davey also assured the city council that a refreshed business plan could be ready in as little as 90 days. Five months later, however, the update won’t be aired before the EDA’s next meeting, on Oct. 8, ostensibly because the Sept. 3 meeting had an overly subscribed agenda. Indeed, the data center question would not have arisen at the meeting at all if not for a short statement read at the end of the public session by authority chairman Billy Vaughn, who opened by acknowledging that there have been “numerous inquiries, comments, and questions regarding the current or potential siting of a data center in Staunton Crossing.”

Without describing those concerns, Vaughn went on to claim that since the business plan and its inclusion of a data center “was prepared after public input, the document should not change until public input has been provided.” Repeating the rationale that Staunton Crossing’s zoning is industrial, “which does not permit data centers,” Vaugh concluded that any zoning change would require “public hearings by the Planning Commission with final decision by City Council.”

In other words, let’s kick this can down the road just a wee bit more.

That this kind of temporizing unnecessarily increases stress and anxiety among those paying attention to such things should be obvious, so here’s an idea: why not seek an amendment to the city’s zoning code now, before civic sensibilities get clouded by high-pressure utility and AI lobbyists promoting a data center already recruited by the city’s economic development staff? Why not make the Staunton Crossing pitch for data centers meaningful by holding public hearings to remove the chief regulatory hurdle such a center must clear before one gets enticed to the city? And if those hearings instead unleash widespread and vociferous opposition to making data centers a permitted use, in business or industrial zones or anywhere else, why not amend Staunton Crossing’s marketing plans accordingly? And. Stop. Wasting. Everyone’s. Time.

Such a preemptive move might require political courage and leadership, but one developmental benchmark that marks the transition from bewildered adolescence to adult maturity is the recognition that everything has a price. That there is no free ride. That a crucial trick to living well comes from divining, as best we can, the true cost of something before taking it on.

Staunton’s cross(ing) is hard to bear

(Reading time: 6 minutes)

We’re now more than three weeks into the 90-day timetable Tim Davey gave Staunton City Council for updating the Staunton Crossing master plan, and so far there’s been no word on how or when this process will begin, or how the city’s residents will be included. That’s a problem, and more so if the city is seriously thinking of trying to land a data center.

For those who missed my earlier write-up on the subject, Davey, director of economic development for the Timmons Group, addressed the city council April 9 to acknowledge that “a long time” had passed since Timmons designed Staunton Crossing. Despite that lengthy hiatus, during which data centers have exploded in number, size and recognized adverse environmental impacts, Davey argued they should remain in the recruiting mix, if only because of the tax revenue one or more such centers would generate for the city.

Along the way, Davey also mentioned, almost parenthetically, that a data center might need its own on-site electrical plant, which these days is the industry response to widespread uproar over the higher electricity rates such centers cause. That would be a new and seemingly significant change to the Crossing’s master plan, especially since the industry’s default option in such cases has been gas-fired generators, which add to local noise and air pollution. Then again, Davey did mention the possibility of a “small” nuclear reactor. Either way, it seems that Staunton’s residents might have some thoughts on the subject.

Davey was equally blithe—and seemingly misleading—in his response to concerns about how much of the city’s water supply would be consumed by a data center. Those concerns have at least two sources. One is the city’s fragile, century-old system of feeder mains that increasingly is prone to catastrophic breaks and which already can’t account for 28% of the water pumped into it. The second is an increasingly erratic climate of precipitation extremes that includes periods of severe drought. The city doesn’t have the $50 million or so needed to beef up its water system, and it has no idea or plan for how to obtain it. And despite some recent showers, all of Virginia has been in a drought since last fall described as the most extreme in two decades.

But not to worry, Davey counseled—there’s always the possibility of recruiting a data center that uses a closed-loop cooling system, thereby limiting water demand. Note the tenuous nature of that “possibility.” Although closed-loop systems are indeed possible, most data centers don’t use them because they’re more complicated, involve higher upfront costs and typically require up to 40% more electricity to operate their additional pumps and heat exchangers, effectively swapping water and electricity burdens.

More to the point, it’s questionable just how much water is conserved by closed-loop systems. A closed-loop system simply means that the water used to cool the processors that comprise the bulk of all data centers—and which, incidentally, run at average temperatures of more than 188 degrees Fahrenheit—runs through a closed loop that passes through a heat exchanger. The other half of the heat exchanger is not a closed loop. The water in this outer loop absorbs the heat from the closed loop before passing through a water-cooling tower, in which it evaporates and thereby releases its heat into the atmosphere.  Cooling towers require a constant water flow to work, each day releasing hundreds of thousands of gallons into thin air.

That’s obviously a concern when long-term water availability is a question mark. But a similar  concern can be raised by pharmaceuticals, which Davey threw out as a new, possible recruitment target for the industrial park. To be fair, it was just a passing mention, so seemingly off-the-cuff that it provoked little follow-up from council members. It’s worth noting, however, that pharmaceutical manufacturing also is a thirsty business—so much so that the industry acknowledges it faces “major challenges in terms of water consumption with potential impacts on the environment and sustainability.”

That’s not to say that the possibility of a pharmaceutical manufacturer setting up shop in Staunton Crossing should be discarded. It is, however, a reminder that there are no silver bullets and that any industry will bring drawbacks as well as advantages. The trick is to publicly and honestly identify assets and liabilities alike, without minimizing costs or overstating benefits, so that everyone is given an opportunity to weigh trade-offs and draw his or her own conclusions about what is or isn’t acceptable. Thus far, at least, that seems not to have happened with Staunton Crossing—or not in nearly a decade, at any rate.

It’s also worth noting that the past decade has seen the development and even explosion of industries that scarcely existed when the Staunton Crossing masterplan was being drawn up—industries that Davey did not mention and that council members didn’t raise, but which should at least be in the mix of any “update” review. One obvious industry group sure to gain momentum in the years ahead, for example, is anything to do with renewable energy: photovoltaic panels, storage batteries, even electric vehicles of various sizes and applications if Staunton Crossing is large enough for their assembly plant. This sector includes newly developed perovskite-silicon cells that achieve 34% efficiency, solar paint, solar windows and thin-film solar panels—all technologies still in their early days, with lots of development potential ahead, unlike the data center boom that even Davey says is nearing an end.

Another industry group that has been ignored—and one that could have additional benefits for our affordable housing-starved area—is manufactured housing, with a particular focus on factory-built or prefab housing. Unlike data centers, which move electrons rather than physical products, a manufactured housing plant could take advantage of Staunton Crossing’s accessibility to rail and highway transportation networks, one of the industrial park’s presumed selling points. Moreover, off-site modular housing construction, like renewable energy products, is an industry of the future, with the U.S. playing catch-up to countries like Sweden, where prefabrication accounts for 84% of the residential market. The Netherlands (20%) and Japan (15%) likewise have a significant share of their homes built this way, compared to just 5% in the U.S.

There may be, on closer examination, convincing reasons why neither renewable energy nor factory-built housing (nor an unknown number of other industries one might think of) is a suitable match for Staunton Crossing. It may also be that they are desirable industries to recruit, but that finding and wooing them will take more work than simply opening the doors to the data centers that are sprouting up everywhere in Virginia like mushrooms after an (increasingly rare) soaking rain. But that’s why a three-month “refresh” of the Staunton Crossing master plan, off to a slow start at that, doesn’t seem like a sincere effort as much as a rush job toward a foregone conclusion.

Data center FOMO with a side of nuke

(Reading time: 7 minutes)

What’s going on with Staunton Crossing?  

Fifteen years and tens of millions of dollars after it was first conceived, the 300-acre industrial park at the corner of I-80 and U.S. 250 has finally achieved Tier 4 status, which signifies it is ready to do business. Which raises the question: what now?

What kinds of businesses should be recruited for Staunton Crossing, and how will the city measure the project’s overall success? Should Staunton put more emphasis on job creation—or on increasing its tax base? How much disruption to its infrastructure and social fabric can the city tolerate, and what’s a fair trade-off for the jobs and tax dollars that result?

These and other issues were raised last week at a regular city council meeting in a rapid-fire presentation by Tim Davey, a professional engineer and director of economic development for the Timmons Group, which had created Staunton Crossing’s master plan by late 2018. “In the marketing world, six years is a long time,” he conceded Thursday, explaining why the plan should be updated. Seven-plus years is an even longer time, but Davey was not one to get bogged down in details, rushing through his remarks as if by doing so he could somehow turn back the clock. Along the way, he managed to toss a couple of hand grenades.

The most obvious casualty of time’s passage has been the master plan’s inclusion of a data center, an industry that was all the rage last decade but which has since lost much of its luster, and which dominated much of last week’s discussion. Just how much of a data center was being contemplated in 2018 is hard to tell from the documents produced at the time. Maps of the site allocated 831,250 square feet to a data center that Timmons projected would be built in the fifth year—which is to say, before now. Elsewhere, however, in a chart that includes water and sewer consumption, the data center was inexplicably reduced to 375,000 square feet, shrinking its hefty water needs below those of a light manufacturing plant. And water, as the master plan noted, is key: “Nothing else matters more than water.”

The intervening years have had other implications for the master plan, which includes a modest level of retail but a significant amount of office space among its target end-users—two categories, as pointed out by Mayor Michele Edwards, that have seen significant post-Covid shifts in demand. Such changes, in turn, affect bottom-line calculations about how many jobs and how many tax dollars Staunton Crossing might generate. Office space, for example, requires relatively little taxable capital investment but generates a lot of jobs when compared with light manufacturing, which requires more taxable spending on equipment and facilities but hires fewer people. Back when the master plan was first assembled, the outlook was for “3,000 quality jobs,” apparently considered a sufficiently high return on the many millions of state tax dollars lavished on the site in the name of job creation. But whether that’s still in the cards remains to be seen.

Data centers completely flip the calculus. Once such a center is built, typically by a transient workforce, its employee headcount is measured in dozens rather than hundreds. A data center’s potential boost to the city’s tax base, on the other hand, is enormous, thanks to its capital-intensive nature. In one sense, then, Staunton’s financial interests are at cross-purposes with Virginia’s, since state-funded land development allocated to a data center essentially transfers state capital to the city’s coffers—a nice offset for Staunton taxpayers, if not so great for the Staunton workforce.

A questionable transfer of tax dollars aside, data centers over the past decade have evolved in public perception from a relatively benign, low-impact and “clean” form of industry into power-guzzling, water-sucking vampires that can be noisy neighbors and a threat to local air quality, thanks to their reliance on diesel- and gas-fired emergency generators. With residential electricity rates climbing and water scarcity exacerbated by such developments, progressive Democrats are pushing a national moratorium on the construction of data centers nationally. A growing number of municipalities are following suit on a local level.

Despite all that, however, Tim Davey clearly believes that data centers should stay in the mix for Staunton Crossing—and not just a data center, but possibly an on-site electric plant to supply its energy needs, up to and including a “small” nuclear reactor.* Data centers and their associated energy sources are “things that people are asking about, and I’m not advocating for it, I’m just telling you that it’s just one of those things that people are asking about and you need to have an answer for that,” he counseled.

City councillor Corrie Park pushed back on such assertions, citing all the drawbacks associated with data centers and the resistance she has encountered from city residents on the subject. It would be “inefficient of us” to pursue a data center at this time because Staunton residents “won’t go for it,” she contended, a waste of time better spent going after more acceptable land uses. Davey, on the other hand, wasn’t having any of it, suggesting various work-arounds for some of the objections, offering for example that some data centers are using closed-loop cooling systems to reduce water consumption. And, of course, there was that whole nuke thing to avoid distorting local energy costs.

But the bottom line for Davey seemed to be . . . the bottom line. The Virginia boom in data centers will have run its course in another five years, he predicted, so it would be in Staunton’s best interests not to miss the gravy train. “I pose the question to my clients, do you want to be the only jurisdiction in Virginia without one, and the tax revenue that could come from it?” he asked the city council, leaning into fear-of-missing-out anxieties. “If the answer is yes, then that’s great—but the tax revenue is pretty impressive.”

What happens next is not clear. Davey’s presentation ended with several recommendations, starting with development of “a diverse, internal marketing team” and creation of “a target marketing portfolio,” which presumably would revisit the kinds of industries the city would try to recruit for Staunton Crossing. Yet the overall package smacks of a rush job staffed by insiders. There is no suggestion that public input would be sought—even for so weighty a subject as the desirability of having a “small nuke” within city limits—and the whole business plan refresh could be done within just 90 days, Davey assured the council.

Doubts about data centers aside, other questions about Staunton Crossing abound. For example, a key question raised by Davey on behalf of Staunton Crossing prospects is, “Where will my employees live?” To that, Davey replied, “I believe you guys are in a very good, healthy position to answer that,” which may come as news to the recently created Staunton Housing Commission and various local groups grappling with the inadequate supply of affordable housing—and all the more so if Staunton Crossing delivers on its promise of 3,000 new jobs. That’s a lot of fresh housing demand!

It’s also worth noting that whatever goes into Staunton Crossing, whether light manufacturing plants or a data center or both, will put additional demands on a water and sewer infrastructure that is already under stress. It’s ironic, therefore, that Davey’s presentation was immediately followed by a request to increase utility rates by 5% to 7% to pay for long overdue water and sewer improvements and maintenance. The increased amount, everyone agreed, will raise only a fraction of what’s actually needed.  

There were no comments made at the public hearing on the rate increase, which was then approved.

*Once you’ve picked your jaw up off the floor and want to get the full context of the casual reference to nuclear reactors, you can find Davey’s comments here, starting at around the 54-minute mark. It should go without saying that any onsite power plant, nuclear or otherwise, would need additional coolant water.