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    Tuesday, August 09, 2022

    Groton Council to vote on whether to cease negotiations with data center developer

    Groton — A data center developer sent a memorandum Friday offering several changes and requesting that the Town Council withdraw the current agreement so the company can return with a fully revised proposal after conducting more outreach to neighbors and the public.

    Town Mayor Juan Melendez Jr. said he received the memorandum, but the Town Council will proceed with holding a previously scheduled meeting on Tuesday to vote on whether or not to discontinue efforts to pursue a municipal host fee agreement with NE Edge. Melendez, who is one of nine councilors, said he personally plans to vote to discontinue pursuing the municipal host fee agreement.

    Residents had raised concerns at recent public meetings about the proposal.

    NE Edge has been seeking the agreement with the town to locate data centers on land, south of Interstate 95 and north of the Sheep Farm properties, between Flanders and Hazelnut Hill Roads. The proposed agreement outlines how much annual revenue the developer would pay to the town in lieu of taxes and the criteria for the data center proposal and would be the first step before the land use process.

    In a memo from NE Edge to Town Manager John Burt and councilors on Friday, NE Edge stated that: "Over the course of the last week, we have reached out to all but one Town Councilor to review their concerns related to the Municipal Hosting agreement. To date, we have met four of the councilors in person." The company also said it is reaching out to Flanders and Hazelnut Hill neighbors individually and will include engineers to answer concerns.

    NE Edge said it has agreed to make several changes to the current agreement. The company will eliminate the third, southernmost data center building and instead distribute the footprint of the eliminated building into the two remaining buildings in the plan, according to the memo. The developer also would add a deed restriction that no more buildings could be built on site.

    NE Edge will pay the town an annual fee of $3.5 million, with escalation, according to the memo. This keeps the same fee structure that had been proposed for three buildings, NE Edge manager Thomas Quinn explained.

    Starting in year five, NE Edge also will make an additional $250,000 annual payment with escalation, over 25 years, "specifically earmarked for" Ella T. Grasso Technical High School and Robert E. Fitch High School, the memo states.

    NE Edge previously has said it would donate 50 acres of land to the town, and now proposes to increase that to 70 acres "based on final approval." It also has pledged to build a dog park and playground, which the memo specifies will be "on a two-acre area on land provided by the Town with appropriate parking and fencing, or on part of the donated land."

    The company also said it will "extend the water and sewer (infrastructure) along Flanders Road." The company said the town manager, at its request, reached out to the municipal utility "to verify assertions by NE Edge representing the impact of the Data Center utility purchases on Municipal Utility ratepayers." NE Edge said the impact will reduce rates for ratepayers.

    "The proposal modified here creates a substantial benefit to the town, utility ratepayers, schools, union jobs, ongoing technical jobs and training towards these jobs, town infrastructure upgrades, and indirect and induced jobs," the memo states. "Locating in Groton provides the opportunity for other types of businesses to locate near the Data Centers due to the benefit of fast connectivity. It is a fact that Data Centers have gravity, adding substantial economic opportunity, and additional tax base with support operations locating nearby."

    Quinn said an informational public meeting is being planned for 6 p.m. April 19 in Groton, expected to be held at the Groton Shopping Plaza.

    Meanwhile, a special Committee of the Whole and Town Council meeting are scheduled for 6:30 p.m. Tuesday at the Thrive 55+ Active Living Center, as well as virtually, on the topic of potentially discontinuing negotiations with NE Edge.

    "The council has a difficult task of balancing the potential positives of having a data center while ensuring the safety and comfort of the surrounding neighborhood," Burt said. "The councilors have spent significant time studying the issues and will make the decision they think is best for the community."

    "If the council turns down the agreement, it would take six council members to agree to bring it back to the council within the next year per council rules," he said.

    "Whether or not they vote on Tuesday, we're still going to pursue our process with the town and come back with a new host fee agreement that may be better acceptable to them once we continue our diligence," Quinn said.

    Town Councilor Aundré Bumgardner, who said he was not contacted by the developer, took issue with a developer reaching out to have a discussion with a councilor outside of public meetings. "The town code of ethics obviously needs revision to prohibit precisely these sorts of ex-parte communications between developers and decision-makers," he added. 

    In a statement Friday, Town Councilor Portia Bordelon said that she reported at the March 22 Committee of the Whole meeting that "Quinn had reached out to her via text, but she declined to respond in an off-the-record manner. During the meeting on the 22nd, she stated her concerns with the appearance of impropriety, following due process and accountability via the Freedom of Information Act."

    Burt said the communications between a developer and a councilor are allowed. He said staff at the FOI Commission has said that it is not an issue.

    "It’s great to see the developer is finally engaging with the community and is planning on hosting a public informational session although it should have been done months ago," Town Councilor David McBride said in a statement. "As I mentioned in my last Council report I believe the Council should review the HCA (excluding the current data center location and the current developer) and make the necessary changes it deems appropriate."

    "Groton has a significant comparative advantage to other municipalities regarding the hosting of data centers and if the town wants to explore such economic development opportunities it should make all developers aware of its requirements," he added. "Once such is completed the Council can review opportunities with all developers and the desired locations."

    Meanwhile, the Planning and Zoning Commission discussed this week potentially having a moratorium on data centers to allow the commission time to update its regulations. This would require a public hearing. Groton's Assistant Director of Planning and Development Services Deb Jones said the next step would be to develop an application for the commission to review. The application has not been drafted yet, so no public hearing is scheduled at this point.

    k.drelich@theday.com

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