Data centers in small towns - pros and cons

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4	Data Center Assessment
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8		Pros	Cons/Risks	Comments
9	Tax Revenue	Significant source of revenue	Financial concentration risk	What is your maximum tolerance for such a concentration? Would you invest idle funds at that same tolerance, or at the risk level of the technology industry?
10			Reliance on single taxpayer	Who is your data center developer: a primary user like Microsoft, a data center operator like QTS, or a speculator who plans to flip the building after completion?
11			Reliance on single industry	The tech industry is very fast-paced and innovates relentlessly. If this one project is a large percentage of land and a large percentage of your tax revenue, you are tying the future of your town to that industry.
12			Potential valuation fluctuation	Valuation of hyperscale data centers is very new. AI bubble raises likelihood of valuation fluctuation.
13			Property tax abatement	Are you planning on property tax abatement? If your primary motivation for the project is tax revenue, why are you abating it?
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18		Pros	Cons	Comments
19	Construction Labor	Job sites likely will employ 1500 or more construction jobs for multiple years.	Much of the labor will be itinerant given the specialities needed.	Assessment of job growth data from TX - https://michaeljhicks.substack.com/p/data-centers-and-local-job-creation
20		Construction workers will generate some indirect economic impact -- eating at restaurants, shopping at local stores	Puts upward pressure on rental prices unless there is a major metro area nearby to absorb the workers.
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26		Pros	Cons	Comments
27	Long-Term Labor	Data center will employ staff once operational, some of which will be high-tech, good-paying jobs	Data center staffing levels are low, and very low per acre of land	Northern Virginia averages 18 employees per data center building
28	Long-Term Labor			Assessment of job growth data from TX - https://michaeljhicks.substack.com/p/data-centers-and-local-job-creation
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33		Pros	Cons	Comments
34	Economic Development	Extension of public utilities -- water, sewer, electricity -- can create opportunity for other businesses to relocate to the area with the data center	There is very little evidence that this happens.	Check maps of West Des Moines IA, Prineville OR, Umatilla OR for examples of the absence of geographically nearby development over a decade past data center construction.
35	Economic Development	Permanent jobs multiplier effect	Multiplier effect only works at scale. Small numbers of new jobs can be easily absorbed by even small towns without indirect economic benefit.
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