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A New Data Center
"A brief follow-up on my previous data center post with more information about the potential East 4th project:
I wanted to get some more information, and I was able to talk to Debra Teufel from the Chamber this morning.
Power: She told me that the proposal was for a center that uses about 10MW of power — about a tenth the size of a large-scale facility (100MW+).
The site already has access to nearby infrastructure for a heavy power load because Eaton used to use a lot of power.
Water: The plans are for a closed-loop system that would have minimal water needs compared to older systems or a much larger facility.
Noise: Developers told local officials they expect limited noise — conversation level at the perimeter of the property.
Debra also told me “the developer has been very transparent in their preliminary meetings and willingly met with city planning staff as an early precursor to a future permit application that would likely come following the city’s adoption of new regulation.
The developers want to fully comply with local proposed regulation and to be a good neighbor while developing a site that has historically housed heavy industry at the former Eaton manufacturing site.”
I thought that was important context and worth quoting directly.
Regarding potential sales tax exemptions, I was incorrect in some of my assumptions about small-scale facilities.
Even a small-scale facility might invest up to $300 million, so the level of investment is not likely to disqualify them from SB 98.
Permanent job creation at data centers varies widely based on their use. On the low end for a 10MW facility, the 20 job requirement might be a barrier.
Additionally, other requirements in the bill make it unlikely a small-scale facility would qualify.
The need for comprehensive review and approval by the Kansas Intelligence Fusion Center (KIFC) is a significant hurdle for projects of all sizes according to the economic development professionals.
Regardless, there are other routes for some sales tax exemptions, like the state’s High Performance Incentive Program (HPIP) or Industrial Revenue Bonds (IRB).
So, sales tax revenue should probably be seen as a bonus. Still possible, but not the main positive to consider.
The main sources of revenue for local governments are property taxes and franchise fees on the power.
I hope this helps to clear up some things about that potential project in Hutch.
Whatever your conclusions, I think it is important that we are making decisions based on the facts."
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