Targeted Incentives and Key Challenges in Data Center Development
Originally published on October 9, 2024, by Marie Ruff for NAIOP.
“We’re in a really unique point in history in the sense that we have this huge demand curve for data centers at a time when we also have some constraints in power,” said Elissa Wilson, attorney, Vorys, Sater, Seymour & Pease, LLP, to begin a panel discussion on data center development at NAIOP’s CRE.Converge. “But the reason data centers are so important is they are fundamental to our modern economy. They’re fundamental to our way of life. They’re fundamental to every single transaction that happens online.”
“Every single person in this room accesses a data center in some way, shape, or form every single day, and probably every single time you use your phone,” said Tony Burkart, head of market development and economic development, at Google. Even a simple task like navigating directions to a local restaurant uses a data center.
Contrary to the perceptions of some state and local governments that data centers take up large amounts of land and power without being offset by large gains in jobs, Burkart said data center development is a catalyst for growth in economies. The primary impacts are data center construction and operations, he said, but also in the wider economy through all the different business services that are enabled using our phones and other digitized tools like AI and the cloud.
“I think it’s important to not lose sight of, ‘what does the community need out of this?’ It can’t just be all about, ‘I need X amount of infrastructure,’ because if you don’t balance that equation, eventually it’s a lopsided relationship,” said Burkart. “That’s one of the biggest sells to the community. You’re going to help build out their infrastructure, which will not only help your project but future projects down the line.”