New data center proposed in Oxford Twp.

OXFORD TWP. — A company developing, owning and operating data centers is proposing to build a new 146-acre campus in a rural, southwestern portion of Erie County. And if it comes to fruition, it'll likely be the largest financial investment — a proposed multibillion-dollar project — in Erie County's history. The Oxford Township-based proposal, known as Project Andromeda, likely requires two approvals at upcoming albeit unscheduled local meetings before even proceeding: • First, the township's zoning board — by a majority vote — must make a recommendation to the elected body of trustees. If a recommendation isn't made, then the project cannot proceed. • Second, at least two of the three Oxford trustees must affirmatively vote "yes" for a private company to build on a site falling within the Ohio Turnpike along Kelley, West Mason and Thomas roads. • It's possible, however, this could only require one affirmative vote: Township trustees could override a zoning recommendation, having ultimate, final say. For instance, if the zoning board votes "no," and trustees vote "yes," then the project would still go forward. But even if the project proceeds, then it still could face further obstacles. In May, Ohio Gov. Mike DeWine ordered the state's tax credit authority to pause on providing any sort of tax breaks or subsidies while legislators study its overall impact. Massive economic impact? Those representing Avaio Digital, the company proposing this project, indicated they would apply for some sort of economic incentive packages from the state and won't go after any local tax break or grant funding. If the data center does get built, then Avaio committed to invest $2.5 billion of its own money into this data center. Additionally, acting as the landlord, Avaio would work with a prospective tenant or customer — tech giants like Amazon, Google or Microsoft, for example — to lease this space. Based on its other data center projects under construction nationwide, Avaio believes whoever occupies this site could invest an additional $3 billion. The $5.5 billion combined privately funded investment, then, would create a sizable economic impact never seen before in Erie County, Avaio company partner Kevin Murphy said. He referenced the project creating upward of 3,000 construction jobs. Avaio would oversee construction but places a great emphasis on hiring local subcontractors. And then, once built, more than 120 in-house positions — paying at least $150,000 a year — would follow. It's likely several contract workers would complement these in-house positions. This could number in the thousands. "These people will be spending at local businesses, will be building homes (and) creating additional business," Murphy said. "There are a tremendous amount of benefits that come with these types of projects if executed responsibly, which is the way we do business." Because of this investment, Murphy believes the data center should generate about $28 million a year in new tax money over a 15-year period. The 15 years represent how long a contract Avaio would likely sign with a customer to work within the proposed data center. Totaling $420 million over this time frame, these are tax funds, Murphy said, that could possibly build new schools, improve infrastructure, upgrade parks and fund numerous other government services. Let's talk about it Murphy and his team plan to visit the area on Tuesday when they'll host a public town hall-style meeting at 7 p.m. inside Rockin' Ranch Saloon, 8315 Milan Road (U.S. 250), Sandusky. While the public can attend, ask questions and voice concerns, it's urged that people act with decorum and respect. Many local officials, including Oxford Township trustees, plan to attend and simply listen to what's said, whether it's coming from company representatives or community members. They'll use this feedback to help make a decision in the near future. It's a process similar to what's playing out in Monroeville with a data center being proposed and public input welcomed on this project. "The Oxford Township board of trustees has no position on this project at this time," trustee Mike Parker said. "If or when the landowner and company proceed, (then) the trustees will become fully engaged with county commissioners, our residents and other stakeholders in the decision-making process." As of today, Oxford Township trustees enacted their own local prohibition on data centers being built in their political subdivision. If a data center did go forward in Oxford Township, then trustees would need to take up legislation to lift the ban. While Parker said he doesn't know how he and fellow trustees Scott Leber and Brian Miller, will vote, he can make one promise. "I do not believe trustees would approve any application unless and until they thought the majority of residents would favor a documented proposal," said Parker, stressing how trustees will take the overall feedback given from residents to influence their final decision. If the data center project goes forward, then Oxford Township trustees plan to work with Erie County commissioners and their team — be it planners, lawyers, financial advisers and others — to ensure the blueprint not only comes to fruition but all promises made are kept with all tax money properly distributed to the rightful entities. Many people seem interested in what could take place. On Wednesday, for instance, about 75 people attended a regularly scheduled trustees meeting with many asking about this proposed data center. Like Oxford Township's trustees, Erie County commissioners "have not taken a position on the proposed project," commissioner Pat Shenigo said. "Based on the information currently available, there is not enough detail for the commissioners to make an informed decision," Shenigo said. "If the project moves forward, we would expect a transparent public process that includes opportunities for residents, local officials and other stakeholders to review the proposal, ask questions and understand both the potential benefits and the potential impacts for Erie County residents." Shenigo then referenced the Aligned Data Center project in Perkins Township, which totals 129 acres. It's the area's only data center under construction. Presently under construction, Shenigo, Parker and other area officials didn't like how the process with Aligned played out. They cited issues with a lack of transparency before an affirmative vote occurred by Perkins Township trustees with them also approving a massive local tax break. Shenigo said the process for Avaio will be much different. For starters, Avaio won't ask for any local subsidies and intends to host public forums, like the one happening Tuesday. "The commissioners will carefully evaluate all available information before taking any position on the project," Shenigo said. Q&A Prior to Tuesday's meeting, Murphy spoke exclusively with the Register. In the 35-minute interview, he discussed the project's proposal at length. Here are some highlights: Q: What is this company? A: Avaio Digital markets itself as a company that develops, owns and operates hyperscale data center campuses and houses critical IT infrastructure. It's keen on being sustainable and having a minimum negative environmental impact on the surrounding area where it has a presence. Avaio presently has four data centers either under construction or about to have a groundbreaking: in Arkansas, Mississippi, California and Virginia. Others are in preliminary and/or planning phases, including in Oxford Township. As of today, the company doesn't have any data centers that are partially operational or fully built. Avaio, however, has assembled a team fully aware of data center development, consisting of engineers, developers, financial experts and other professionals familiar with this process to ensure it can properly build a data center, Murphy said. "It's a pretty interesting mix that we have put together so we really understand, from soup to nuts, how to develop a project, how to finance a project and then how to build it and deliver it successfully," Murphy said. Q: How big would the data center be? A: Murphy is proposing a 250-megawatt data center for Oxford Township. He considered this a "smaller" data center compared to some others, requiring 2 gigawatts. "It's not going to be like the giant campuses you see across the state and across the country," Murphy said. "We try to do things that are reasonable, that have a minimal environmental impact but also are meaningful enough where it generates real employment in the area and that generates real tax revenue." The project needs to strike a balance, he said. "You don't want to be too big where it's an unreasonable project, but you want to be big enough where there are tangible benefits to the community, ultimately getting them excited to have you there, which is what we found, successfully, everywhere else we are operating in the country," said Murphy, noting for every direct data center job created, three indirect jobs result. The project entails four buildings, breaking down to 300,000 square feet per building for a total of 1.2 million square feet As a comparison, Aligned Data Centers in Perkins Township is taking up about 129 acres across 1.3 million square feet. Q: If built, who could occupy this site? A: That's undetermined at this point. Think about the popular phrase from the movie "Field of Dreams" — "If you build it, they will come." Data centers work under the mantra: "build it, and they will come." Yet there's plenty of interest from tech giants to find a work home in data centers, Murphy said. Companies like Amazon, Google and Microsoft "are the types of companies you should think about when you think about these customers" going into data centers, Murphy said. These companies need data centers to offer services, such as emails, Netflix, cloud storage and answers to questions people type in online search engines. "I can't predict who it will be (the customer), but given its location and fiber access … it will get a lot of interest once we market it. But we won't market it until we get much further along," Murphy said. Q: Why is Oxford Township's data center called Project Andromeda? A: Andromeda refers to a constellation prominent in the northern sky visible throughout the fall and winter months. "Every project has a constellation associated with it," Murphy said about his company's portfolio. "That's how we refer to our projects." Q: Why is the company interested in Ohio and, more specifically, Oxford Township? A: Avaio views Ohio as a business-friendly state, Murphy said, especially for projects of this size. The location where Avaio is planning a data center is conducive to tapping into a powerful fiber-optic corridor, spanning from New York City to Chicago, which can transmit data at up to 70% of the speed of light. "It's a highway of information," Murphy said. The site is also in a favorable location, close to the Ohio Turnpike, where the fiber corridor spans. It's also not disruptive to the local community, Murphy said. There are no homes or businesses anywhere in proximity to this location, he said. "We want to pick sites that are not disruptive to the local community. Sites become disruptive to the local community when you need to wrap power lines, fiber and water to the site," Murphy said. He continued: "The site that we've selected sits on a fiber corridor. There is no fiber routing. It has a high-voltage transmission line running through it, so there is no line routing. And it won't be disruptive to the local community. It's flat, so you won't be disrupting the earth. We are not clearing a bunch of trees. You are not going to hear (any noise from) our site." Near EHOVE Career Center, Murphy sees great potential in working with the school to create a scholarship, internship and training programs. It can serve as a pipeline where students can receive on-the-job training and learn valuable skills. "We want to make sure we are bringing tangible benefits to the community," said Murphy, noting Oxford Township would also benefit by, through other means, better roads and upgraded parks. Q: How could this be different from Aligned Data Centers in the Sandusky area? A: Among the differences, unlike Aligned, which picked a site in a residential-commercial zone along one of Erie County's busiest routes, West Perkins Avenue, Avaio isn't anywhere near any homes or businesses. "It's not going to be disruptive to people's views or their everyday life," Murphy said. "It's not going to be noticeable." Avaio's building should also have a softer look, Murphy said, as opposed to the massive concrete presence of Aligned. Before being built, Avaio wants to launch an informational campaign — starting with Tuesday's meeting — to fully clue the public in about what's going on. Murphy re-emphasized how Avaio would not seek any sort of local tax break. Aligned, meanwhile, did from Perkins, getting a 70% tax break over 30 years. "We do community outreach. We explain what we are doing," Murphy said. "We want to make sure that, with enough explanation, people are excited about us being there. From there, we'll start speaking to customers." Q: How do you address concerns many, around the local area and elsewhere, have expressed about data centers relating to noise, water usage and electricity usage? A: Murphy addressed each concern: • On noise: "We are on the interstate, and so we will never be generating noise that is disruptive. You won't hear it. We are a lot quieter than an interstate. If you are standing at the building, the highest you will hear is 65 decibels," equivalent to normal conversation levels. "Noise will never be an issue. No one should be worried about that from our facility being detectable." • On water: "We utilize what's known as a closed-loop system. It's not water running in and out. The peak of this campus will be 20,000 gallons a day. The average use will be well below 10,000 gallons. There are water lines adjacent to the site, and we won't put a dent in them." • On electricity: "We are tapping into the (existing) grid right on our site so there is no new power line routing. We are paying for all improvements. We are not building our own power generation. We are using surplus grid power. We will be paying for that. We write a check to the utility as soon as we sign a contract that covers all those costs. There are no costs that are put on to other customers. Before we even sign a utility contract, the utility does a conceptual study and looks to see the load: Does your load create any issues on the grid in general? Ours does not. If it did, then you as a customer would be paying for these improvements. The utility has been very, very careful that none of these costs are being put onto other customers." Q: If Oxford Township trustees eventually approve your proposal, what kind of timeline can people expect? A: A theoretical timeline could go something like this: • 2026 — continue public outreach campaign, go through the permitting process for approvals, pursue design work • 2027 — break ground sometime during the first six months with construction to follow • 2028 — become operational at the end of the year; Once the first building comes up, the site would go live with additional building construction to follow. • 2029 to 2030 — complete work on all four buildings; Once the four buildings are built, then a 15-year contract with the tenant begins. Q: Why should people come to the public meeting? A: "We are welcoming people from the township and county to come and be able to get answers to their questions," Murphy said. "From my perspective, I want to look people in the eye, explain what we are doing, answer their questions and make clear that we are not a big corporation. We are a smaller company. That helps us become more focused and engaged with the community versus what you see from larger players. I hope that resonates, and we are excited to meet people, answer questions, shake hands and, hopefully, start to generate some excitement."