Is Gallatin Having The "Woolhawk" Pulled Over Its Eyes?
Updated: May 4, 2020
Tonight's Planning Commission Agenda included a request to Annex 523.96 Acres into the City of Gallatin along with changing the character area of 647.16 acres from Rural to Industrial, and rezoning the land to Industrial Restrictive, all for project "Woolhawk".
It seems like the Commissioners were seeing this for the first time tonight and some of them stated specifically that they were confused about where the project was located. The only questions asked were about the potential of a green way connecting to the project, a road connection to highway 25 and when the site plan will be ready.
That's it. No real important questions were asked...
OK - I have some questions.
What is Woolhawk? Well, it is the codename for a data center project. Do you remember starting to hear about "Facebook coming to Gallatin" back in January? We don't know if it is Facebook, but it looks like it might be. It is certainly a company as big as Facebook or Google , as it is "a massive multi-million-dollar data center" according to an article in the Hendersonville Standard which states that according to James Fenton, executive director of the Gallatin Economic Development Agency, "809 acres of privately-owned property is being considered for the project". So, it's even more property than 647 acres? 809 acres is a lot of property, massive is the right word for this.
So my next question is, What is a Data Center? Especially, what is a "massive" data center? According to Wikipedia, it is "a group of buildings used to house computer systems and associated components, such as telecommunications and storage systems." "A large data center is an industrial-scale operation using as much electricity as a small town." This brings up another question - Is Gallatin Electric going to be providing the electricity for this project? I would like to see the plan of service feasibility report for this annexation. I did notice that tomorrow's City Council meeting has a water and sewer contract for approval between Woolhawk and the City of Gallatin. But it is only for water and sewer, not electricity. Will another electricity company be the supplier? Are they using renewable energy?
Is a massive data center a good thing for Gallatin? We have heard that it will provide good paying jobs and be a boost for our economy. What is a good paying job? How many good paying jobs, and how many average paying jobs will it provide? What are the boosts our economy will get?
The US Chamber of Commerce's Chamber Technology Engagement Center recent report states "that during construction, the average data center employs 1,688 local workers and provides them $77.7 million in wages. Additionally, building the average data center generates $243.5 million in output through a local economy's supply chain and produces $9.9 million in revenue for state and local governments, which can then be used for public services. For every year that follows, that same data center goes on to support 157 local jobs paying $7.8 million in wages. It injects $32.5 million into the local economy and generates $1.1 million in revenue to state and local governments."
So, to sort of answer the job question, 157 jobs with the average job (some will be lower, some higher) paying $49,682.00 yearly salary. This is the kind of information citizens should be told. Actual, real numbers. I want to know how many salaries will be available at what levels? How many at $80,000.00 and how many at $30,000.00? And will the jobs be offered to local people first? According to the Nashville Business Journal, the closest Facebook data center to us in Huntsville AL, has about 70 employees paying an average of $80,000.00 a year. Per Facebook's own data, an average Facebook data center has a workforce of 196 people after five years of operation. How many will the Gallatin data center have?
The fact that data centers bring in a lot of tax revenue with property tax, sales, and use tax could be a boon for Gallatin. One of my biggest questions is what incentive package is the City of Gallatin and the State of Tennessee offering to this company to entice them to locate a data center here? This is something that the citizens of Gallatin should know, as City business is our business, and anything to do with taxes affects us. At last week's City Council meeting James Fenton said that Gallatin is still negotiating with Woolhawk. I want to know what we are offering them, and if indeed it is will be a net positive for Gallatin. Below are some quotes that explain why this question is so important to me.
An article in techrepublic.com "Why data centers fail to bring new jobs to small towns" has a quote from Todd L. Cherry, director of the Center for Economic Research and Policy Analysis at Appalachian State University. "The underlying issue is that the state and local governments provide incentives such as tax breaks, land, infrastructure, and services, usually in a competitive bidding process with other governments trying to land the data center. The incentive packages can be quite outlandish--far exceeding any reasonable economic justification. This is a form of what we call 'the winner's curse.' When governments engage in a competitive bidding process over an uncertain benefit, the one that wins is the one that overestimates the benefit."
In the Des Moines Register, on May 16, 2019, Ian Richardson and Kevin Hardy talk about the Altoona Campus in Iowa and the incentives the City gave to Facebook. "Altoona last week approved a development agreement that will waive all property taxes on the new building for 20 years."
Bloomberg Businessweek, on September 25, 2017 expands on government tax giveaways, especially for Facebook's $450 million data center in Forest City, NC. "Since the data center opened in 2012, helping to store and manage Facebook’s vast supply of friend requests and likes, the company has paid $13.9 million in taxes into the local Rutherford County coffers but received $13.5 million back in grants. [...] There were also untold millions in incentives from the state, which waived sales taxes on the center’s principal costs: computer equipment and electricity."
I'm not saying that this is what Gallatin is doing, but I am saying that I want to know whether or not this is the case with our city.
In regards to jobs, it is interesting that minimal job creation is not necessarily a negative thing, as stated in areadevelopment.com, article "The Mystery Impact of Data Centers on Local Economies Revealed", If a data center brings the City significant tax revenue, and the " minimal job impact comes with minimal costs of services for roads and schools. Schools are not expected to experience much (if any) strain because of the lack of new students brought about by a data center development." This could be a net positive for the City of Gallatin. But here again, I have another question. The article does fail to take into account the 1,688 construction workers and their kids, because most of those will be temporary construction workers. With the City of Gallatin growing as fast as it is and the construction industry already booming and busy, this project will require a lot of new temporary workers moving to town for a few years. Where will those kids go to school? Are we ready for that? We have the apartments for the temporary workers to live in, but are the schools ready?
Another question I have is about public utility services. The City of Gallatin is entering into a contract with Woolhawk to guarantee water and sewer service to them at the capacity they need. But what about us? The citizens of Gallatin? What happens if sometime in the future, there is not enough water for us and the data center? We don't have a contract guaranteeing us water. So if there is a shortage, will the data center get water to cool the computers before we are supplied water to drink? It is hard to imagine a water shortage here in Tennessee, but when I lived in California, there was a water shortage and I can imagine what that is like because I experienced it, we were limited on the amount of water we were allowed to use. Can this happen to Gallatin? How much of our water capacity are we giving to the data center? I read the contract and it looks like we are not putting a limit on it? What if they grow and require more? Shouldn't there be a cap of what they can use based on a percentage of Gallatin's overall capacity? Data centers tend to attract more data centers, so what happens if Gallatin becomes a tech-city full of data centers sucking up all of our water supply? This project alone is 800 acres of buildings, full of computers, all being cooled by a precious resource. Is the data center being required by the City of Gallatin to recycle the water they use? Are they being required to collect rainwater to supplement the City water? And what about wastewater? Can Gallatin handle the amount of wastewater capacity they need along with the growth that is happening? Our capacity is 16 Million gallons, with 7 Million gallons of capacity left. How much will the data center use? To put it in easy to understand numbers, In Red Oak, Texas, a town about 20 miles south of Dallas, Google wants as much as 1.46 billion gallons of water a year for a new data center by 2021, according to a legal filing. This is 4 million gallons a day and represents more than half of our remaining capacity.
And doesn't Gallatin process WHUD's wastewater? What about all the new development including everything on Upper Station Camp when that new sewer main goes in at the new school and all the development that will trigger? Will Gallatin still continue to process WHUD's wastewater? And the Meadows - is that calculated into the already accounted for capacity use?
I have a lot more questions. This is a massive project, developed on land the size of more than 450 football fields and the Citizens of Gallatin deserve to be told real answers, not just told sound bites that make us feel good like "This is going to bring a lot of good paying jobs to Gallatin."
We have all heard of a "Wolf in Sheep's Clothing", but a "Hawk in Sheep's Clothing" is a new one. We need answers. Why are the planning commissioners not asking their usual questions on this project? They had no problem asking plenty of questions on all the other items on tonight's agenda. What are they hiding from us? This project is going to suck up a lot of resources - Land, Electricity, Water. A LOT of Water. What do we get in exchange? What does Gallatin Get? Is it worth it? Is it a good deal for us? Maybe? Who knows???