A data center developer is offering $10,000 payments to win the support of Poconos residents

Residents of a small community in the Poconos are being enticed with the offer of a $10,000 payment — no strings attached — to throw their support behind a developer’s plan for a massive data center campus that has faced staunch opposition in Luzerne County.

NorthPoint Development, a Missouri company that specializes in large-scale industrial projects, wants to construct up to 15 data center buildings in the foothill community of Hazle Township. The proposal would cover about 1,300 acres. 

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When local officials rejected the project last fall, citing zoning restrictions, NorthPoint sued to overturn the decision, but lost the case. The township then enacted a six-month moratorium on data center applications, sending NorthPoint back to the drawing board while officials update local zoning laws. The moratorium ends in January.

The Wall Street Journal reported Sunday that Hazle residents began receiving letters in the mail from NorthPoint in June. The company is willing to pay $10,000 to each of the township’s roughly 4,500 households if leaders in Hazle approve the project. That equates to a $45 million fund to buy local support, and the letter from the developer said residents could use the money for “whatever you want.”

Despite the temptation to take a check, the strategy does not appear to be swaying a large number of Hazle residents. Many are worried about the raft of issues that have led communities across the country to spurn data center projects. In addition to fears about heavy water usage, noise and upward pressure on energy costs, homeowners are wary of how a data center will affect the value of their properties.

“$10,000 doesn’t match how much it’s going to tank my property value,” Jeff Fasnacht, a retired teacher who lives near the proposed site of NorthPoint’s data center, told the Wall Street Journal.

Limited research on how data centers affect home values has been mixed. The National Association of Realtors released a study this month showing dramatic differences across markets where campuses have been built during the rush to power AI development. Despite the pace of data center growth and their growing importance in the sphere of politics, NAR found they’re concentrated in areas that make up about 1% of the country.

Counties with more data centers tend to have higher home values, higher incomes and better long-term job growth than those without them, the study found, backing other research showing greater benefits of such facilities for already-wealthy communities. Home values in counties with high concentrations of data centers — meaning 10 or more — have grown about 95% over the past decade, compared to 64% growth in counties without data centers.

But at a more local level, the effect of data centers is too varied to generalize. 

“We do not see evidence of weaker housing markets in counties with a large data center presence,” NAR chief economist Lawrence Yun said in a statement accompanying the study. “But these are county-level numbers, and they can’t tell us what happens to an individual home next to a facility. That’s why local knowledge and credible data matter so much right now.”

In Hazle, where the median household income is $60,000, taking a $10,000 check from NorthPoint could be a considerable financial help to many residents. Most of those interviewed by the Wall Street Journal said they recognize what the money would do for them, but still would prefer not have a data center in town.

Data center developers have increasingly touted community benefits agreements to gain the support of local governments, promising long-term funding for essential services like fire departments and schools. Offers like NorthPoint’s could be a new wave in efforts to sway leery communities.

“I think we’ve got something here that’s on the cutting edge,” Brent Miles, NorthPoint’s chief marketing officer, told The Wall Street Journal.

Americans’ views of data centers continue to reflect opposition in polls. About 60% of people polled by the Pew Research Center in July and August said they would not be comfortable with a new data center operating in their area, including 54% of Republicans and 68% of Democrats. The poll found rising numbers of Americans who say data centers are bad for the environment, home energy costs and nearby quality of life.

Debate about the project in Hazle Township will spill into next year, and NorthPoint is offering the township $120 million to support the community’s police department and other services over the next 15 years.

The developer’s tactic of enticing residents with direct payments comes as Pennsylvania clamps down on speculative data center proposals statewide. 

Last month, Gov. Josh Shapiro signed an executive order that limits developers’ projects from moving forward unless they obtain local and municipal approval and adhere to a range of requirements related to the cost and usage of energy and water. Philadelphia also created a task force this month that will research the potential impacts of data center development in the city.