Charlotte City Council is holding a public hearing Tuesday at 5:30 p.m. at Charlotte’s Government Center to consider a 150-day data center moratorium, the latest move in the ongoing public pushback to the facilities that guzzle water and power.
Tensions in the city have risen over the last couple of months in response to American Towers’ request to rezone a portion of the land it owns in east Charlotte, near the Reedy Creek Nature Preserve. Residents and city council members have come out against the expansion of the existing business to include a small data center on Hood Road.
What is a moratorium?
A wave of data center moratoria has swept North Carolina, but this isn’t the first time the state has hit pause on an emergent technology. In 2017, the state imposed an 18-month moratorium on wind energy while it studied the impacts of wind turbines on its military installations.
Lawyer Bruce Thompson said a moratorium is a “time out” that gives local officials time to gather more information and update their policies. The moratorium would provide Charlotte with enough time to analyze the land, energy and water impacts of new data center development.
“The rapid pace of technological development in our society means there are issues that are popping up before elected bodies that maybe they don't have enough information yet to be able to make determinations,” Thompson said.
But Thompson, who focuses on public policy at Parker Poe, said there is a risk to waiting.
“I caution anybody looking at a moratorium just to make sure that if they do it, that they're not sending a message that a particular type of business isn't welcome in our state,” Thompson said. “There are a lot of great examples across North Carolina where a data center has really been transformational for a county.”
A rapidly evolving technology with a growing footprint
Data centers have long coexisted alongside Charlotte city residents. An inventory of Charlotte’s tax parcels revealed one million square feet of server rooms, IT closets and data centers. Most existing data centers in the state are small enough to resemble any other commercial business.
However, new hyperscale projects have recently been proposed in the state. These facilities are much larger than any existing data centers in the state and come with different considerations for local officials. The developer of one proposed project in Edgecombe County said it planned to build an entire natural gas plant to power its operations.
Still, Thompson said that the capital investment that comes along with some data center projects is nothing to bat an eye at.
“A lot of times these projects come in, and they're automatically going to be the number one property taxpayer in that county,” Thompson said. This has proven true of Google in Caldwell County and Apple in Catawba County.
A moratorium would also give the state time to act, as several bills addressing data centers are circulating in the General Assembly this session. For example, the state is currently deliberating on repealing the state’s 2006 sales tax exemptions for data centers, which would further increase revenue from new facilities.
‘Data has to be stored somewhere’
Thompson said he encountered similar blowback against new cell towers when he represented wireless carriers. Residents enjoy access to digital infrastructure, but they’re hesitant to host the physical infrastructure that props it up.
“Data has to be stored somewhere,” Thompson said. “The cloud isn't some magical place that is up in the sky. It's a data center located somewhere in the US or around the world.”
If Charlotte passes the moratorium without a clear goal in mind, the city runs the risk of alienating prospective large taxpayers. He compared it to the 2017 wind energy moratorium:
“It put North Carolina a little bit behind in our development of projects here, because the industry looked at the state and said, ‘Well, they're saying no more projects for the next three to five years, so let's go look at states that are interested in having us,’” Thompson said.
He warned that a moratorium could send a “bad signal” to developers that data centers aren’t welcome anywhere in the state. One way to avoid that, Thompson said, is to include existing data center operators in the process post-moratorium.
“Take some of the mystery out of it, and let people know if we build a data center in your jurisdiction, this is what it's going to look like,” Thompson said. “These are going to be the noise impacts, the impacts on infrastructure, the impacts on property taxes, whatever it may be.”
