How one city balances its economy and community needs on data centers
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By
Chris Teale
Colorado Springs, Colorado wants to bring in data centers but do so in a way that’s transparent and protects quality of life. Being proactive is crucial, an economic development leader there said.
In a rare move earlier this year, data center operator and developer Raeden published a website looking to dispel various concerns and “misinformation and disinformation” around a project it’s building in Colorado Springs, Colorado.
Known as Project Taurus, the website promises the 50-megawatt data center on the site of a former Intel chip factory will use zero gallons of water each day for cooling, operate more quietly than the previous tenant and generate more than $3 million a year in tax revenue.
The effort has not been without controversy. The Colorado Springs City Council voted last month to postpone a decision granting the project final approval until April after a contentious public hearing.
But local officials said that while the approval process has been tricky, it demonstrates that Colorado Springs is trying to strike the right balance between encouraging data centers to power artificial intelligence while respecting the views of residents who may be opposed to them. Data centers are a controversial subject in communities across the country, but being transparent and getting promises from developers before they build are crucial ways to protect their constituents.
“The concerns about water and power and noise are not a reason to say no; they really are conditions to say yes,” Johnna Reeder Kleymeyer, president and CEO of the Colorado Springs Chamber and Economic Development Corporation. “The way we have approached it as a community is to work to get in front of these questions.”
Using former industrial sites for new data centers is a key part of Colorado Springs’ strategy, Reeder Kleymeyer said, as those sites are already zoned for industrial uses and would likely not be good candidates for anything else. The Environmental Protection Agency has already assembled information on how to reuse those brownfield sites for data centers, and it’s something Colorado Springs continues to explore.
Beyond that, the city is already looking to get ahead of various concerns around power and water use.
The city’s utility company, Colorado Springs Utilities, was the first in the state to put a tariff on large loads, meaning that the user pays for all the infrastructure and the power itself, without passing those costs on to residents. The House of Representatives passed a bill last month known as the Ratepayer Protection Act, designed to require states to have a strategy to have large operators pay for their own power, but it appears to be languishing in the U.S. Senate. That puts the onus on states and communities to do the work themselves, like in Colorado Springs.
The city also is requiring data centers to use closed-loop water systems, meaning that water is recycled rather than putting a drain on limited water resources. Reeder Kleymeyer said it’s important for the city to be “getting in front of the issues and ensuring we are protecting the residents,” while at the same time showing it is “open for business.”
Similar initiatives are set to follow in noise monitoring, which so far does not have a requirement in the city’s unified development code. Reeder Kleymeyer said Project Taurus has already agreed to monitor its noise and put up a surety bond of $1 million if they break those parameters, so they would be required to pay a penalty if they do not comply.
While some data center operators have failed to be good neighbors and so stoked community anxiety, Reeder Kleymeyer said it’s incumbent on lawmakers and other senior leaders to hold their feet to the fire. And financial incentives, which have been preferred by many over the years, are not the way.
“I think some data centers have earned that reason that communities are skeptical,” she said. “Not everyone has been a good player in the industry, and I think that's why it's important that people that live in the community, such as myself with an economic development organization or elected officials, we ask the questions, we get things in writing, and we make data-driven decisions, not based on emotion.”
It would be “naïve” to not have data centers given the growth in AI and technology, Reeder Kleymeyer said. And it’s especially important for Colorado Springs, given its national security and military importance, to have its data housed on these shores and not elsewhere. She said that states and localities that take the time now to have forward-looking and proactive policies in place will benefit the most from data centers.
“‘Never’ is not a strategy,” Reeder Kleymeyer said. “The communities that set strong terms, they're going to win for the next generation of employers. That's what we've got to be thinking about for the next 12 months to 10 years.”