Energy guzzling data center may get $9 million sales tax rebate from Denver

Photo byimgixonUnsplash

The term “data center” conjures up images of computer equipment and not much else. On the surface, it appears to be an environmentally clean enterprise.

But the truth is these centers use massive amounts of energy, most of which still is generated in ways that harm the environment. The centers also guzzle water, which is used for cooling.

The Business, Arts, Workforce and Aviation Services Committee of the Denver City Council postponed Wednesday until Oct. 2 voting on a tax rebate deal worth $9 million for a Denver data center. “Denver-based CoreSite plans to transform an abandoned manufacturing site into a multi-tenant state-of-the-art data center campus in District 9,” according to a memo from city staff to the City Council. “This economic development opportunity would bring new trades and technology-oriented jobs as well as construction jobs to our community. This will significantly expand the city’s tax base, and establish an important technology asset aiding private enterprises, schools, and public sector entities in the digital transformation of IT architecture for a cloud enabled workforce, remote learning, and other tech applications.”

Centers can drive up electricity costs

Council members said that may be true, but underscored the fact the Globeville Elyria Swansea neighborhood has been an environmental catastrophe for many years. Council President Amanda Sandoval pointed out it has been the home of three superfund sites and still is the location of a Suncor refinery. “That neighborhood has been polluted for so long I don’t even hear people talking about it anymore,” Sandoval said.

Council member Sarah Parady said that data centers can drive up electricity costs and availability. She said bringing them online at a time when the city is not meeting its Energize Denver goals is problematic. “This should not be in front of us, and I will not be voting to move this to the full council.” Parady wants more specific information about how much energy and water the facility would use.

Better community engagement

Committee Chair Shontel Lewis said she sees “room for improvement” when it comes to community engagement about the data center. She noted that racism and infrastructure historically have gone hand in hand in Globeville Elyria Swansea.

But CoreSite officials told council members the data centers operate cleanly. Additional energy efficiencies are in the works, they said. They pointed to Loudon County, Va., where the world’s largest concentration of data centers resides. They said the municipality now enjoys more money for schools, police and more.

Anthony Hatzenbuehler of CoreSite said the site of the data center likely would be used for warehousing if their plan fell apart. That would add polluting trucks to the roads, he said.

Even if the committee approves the tax rebate, the full City Council must sign off on it, too.