A combination of energy market forces, a change in New York State law, and tax incentives will bring a high-tech computer data center to Yates County. At July’s meeting of the board of directors of the Finger Lakes Economic Development Center (FLEDC, Yates County’s sole industrial/economic development agency) a plan for the Greenidge Generation power plant near Dresden to install a 30 unit data center was presented by Greenidge attorney Kevin McAuliffe.
McAuliffe explained that with natural gas prices relatively high and electric prices comparatively low, Greenidge has not been generating electricity for public consumption. Parent company, Atlas Holdings, is looking for a way to get a return on their already substantial investment of $25 million to convert the former coal plant to natural gas and building a spur pipeline to supply it. A change in New York State’s energy market laws, allowing companies to use electricity they generate before it enters the grid market, makes the idea of an energy-thirsty enterprise like a data center a potentially lucrative one.
With six dark fiber lines available and the ability to generate over 100 megawatts of electricity, Greenidge is a prime location. The 30, 9 x 40 foot prefabricated containers, which look much like semi trailer boxes, will use just two of the dark fibers and approximately 65 megawatts of Greenidge electricity. The center will be built on three acres of the 132 acre industrial site, and result in over $4 million of property improvements for the tax rolls.
FLEDC CEO Steve Griffin says this new project will not impact Greenidge Generation’s 2016 Payment in Lieu of Taxes Agreement in any way. The new improvements will be taxed as any other increased property values. The only tax incentive Greenidge will receive, if approved by FLEDC, will be a project agreement for sales tax exemption totalling just over $6 million on the $80 million dollar project. The vast majority of that investment is for the purchase of the 30 data units, which would not occur in Yates County, and thus would have no direct sales tax benefit here.
New York State sales tax law also offers a new incentive in the form of sales tax exemption for the hosting of websites. What remains unclear is what other services the data center would perform for clients that would result in local sales tax revenue.
Griffin calculated the economic benefits of the data center without any sales tax, which still resulted in considerable advantage for the local economy. The new venture would create 10 new permanent jobs: a manager at $100,000 per year, and nine workers at $60,000 to $80,000 per year. Greenidge General Manager Dale Irwin says that number may end up being closer to 15, but says he “would rather under-promise and over-perform.” This would also retain the 16 positions currently employed at Greenidge, which, true to Irwin’s statement, is above the jobs figure promised in their 2016 PILOT.
With a proposed sales tax exemption above $100,000, FLEDC must hold a public meeting before the board may vote on the project agreement. That meeting is scheduled for 9 a.m. Tuesday, Aug. 20 in the meeting room of the Town of Torrey Office at 56 Geneva St. in Dresden.