Abstract:
According to the Wall Street Journal, in Hazel Township, Pennsylvania, residents here can receive $10,000 if they agree to build a data center. Although the cash compensation is attractive, many local residents are opposed to the construction of the data center.
Data center project boycotted by Hazel Township
In June of this year, these lobbying letters began to be mailed to residents, and the letter was sent by NorthPoint Development, a large developer. NorthPoint said it will distribute $10,000 to every household in the town. This money can be used as you wish. "Really, you can spend whatever you want," the developer wrote in the letter.
To get the money, the town only needs to allow NorthPoint to build its data center. It is the first of 15 buildings the company plans to build on 1,300 acres in the Pocono foothills. Subsequently, checks of $10,000 will be distributed to 4,500 local households. The developers wrote that it would be a $45 million expense.
For many people in Hazel Township, $10,000 is a significant amount of money. The town's median household income is about $60,000. Even after taxes, that's enough to cover rent on a two-bedroom apartment for about six months, or cover groceries or fuel expenses for longer.
But regardless of income, employment status or place of residence, few Hazeltown residents interviewed by the Wall Street Journal said they were willing to welcome the data center for the money.
They oppose developers' projects for a variety of reasons, from the noise that comes with data centers to aversion to the rapid expansion of AI. One common thread is that they generally distrust such projects, or the developers behind them.
John Zola, who lives in nearby Sugarloaf, objects to data center transmission lines running through his land. He said politicians in small towns across Pennsylvania are too easily co-opted or influenced by large developers. Then, "the floodgates opened and local governments offered tax relief for 10 years."
Data center developers are increasingly offering packages worth tens of millions of dollars to towns and cities, including funding for fire departments, emergency services and schools. In Hazel Township, locals also witnessed the developer's generosity at the local Italian festival: "The free rides are sponsored by NorthPoint."
Cash temptation
However, developers disbursing cash directly to residents marks a new stage in the expansion of AI infrastructure.
Jeff Fasnacht is a retired teacher whose house is near the planned data center. He worries that data center construction in the coming years will bring constant noise.
“$10,000 doesn’t make up for the devaluation it causes,” Fasnacht said. He was drinking scotch and smoking a cigar after a morning of golf at Eagle Rock Resort.
Fasnacht worries about noise
Some local residents believe that the government and developers are concealing project-related information from the public. On this issue, Pennsylvania Governor Josh Shapiro signed an executive order last month prohibiting local governments from signing confidentiality agreements with data center companies.
Charlie Leshko is a retired maintenance worker and janitor who lives in a senior housing complex in Hazleton. He was quite interested in the cash compensation. While he lives outside the area that doesn't qualify for the money, he understands why it would be attractive to residents.
“You don’t get $10,000 every day,” Leshko said.
He said the money could be used to buy a new car or as a down payment for a house. "I've always wanted to own a house of my own," Leshko said.
Diana Spallone, a special education teacher, also received the letter. She worries that the influx of data centers will eventually hurt the value of her home. This is her main concern.
However, she and her husband recently renovated the house, including a new roof. She said the data center money would at least help them supplement their savings.
"$10,000 is good," Spallone said.
Sparlone believes $10,000 can boost savings
NorthPoint Chief Marketing Officer Brent Miles said the idea for the cash handouts stemmed from a raucous public meeting last year. At the time, angry local residents asked what benefits they would get if they supported the construction of the data center.
Myers said in an interview: "I think we have come up with an avant-garde approach that is actually a direct response to the question, 'What's in it for me?'"
Question
In addition to the fund that will hand out cash to residents, Myers also highlighted that the company plans to disburse another $120 million over the next 15 years, including funding for police departments and other community-building investments.
He estimates the company has converted nearly 100 residents who were initially skeptical about handing out the money by answering questions and clarifying what he said was misinformation about water, energy costs, noise and other issues.
Some of the residents who received the $10,000 offer live in large houses with mountain views. Others live in the former coal-mining towns surrounding the small town of Hazleton, where streets are lined with faded vinyl-clad houses and dirty awnings and pubs are packed before five o'clock.
Slogans against data centers
In nearby Salem Township, dozens of families have made millions selling land for server farms. But as opposition to data center construction grows louder across Pennsylvania, many residents feel that $10,000 is just a cheap way to buy them silence.
“At first it sounds like, ‘Well, maybe I can think about it.’” Carl Majusiak, a retired foundry worker, sipped Miller Lite at the Doghouse Tavern in West Hazleton as he considered the developer’s proposal. But eventually, Majusiak decided, "We don't need this here."
Majusiak recalled that 15 years ago, developers began clearing forests to build more warehouses. His favorite deer-hunting spot was thus lost to cinder blocks.
The fate of the data center project remains unclear. Hazel Township Council rejected the project last November on zoning grounds. Developer NorthPoint subsequently sued the town to overturn the decision. The lawsuit is still ongoing.
Negra questioned whether the $10,000 was a bribe
In the meantime, the Town of Hazel has enacted a temporary ban on data center construction while working to update local zoning regulations.
Ed Negra, a retired Hazel Township resident, is assisting organizations campaigning against the data center. He said the $10,000 compensation offer could ultimately backfire.
“I think it’s counterproductive because most people are thinking, are they trying to bribe us?”
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