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    Thursday, June 13, 2024

    Data center developer appeals Groton’s regulations

    Groton ― A developer trying to build hyper-scale data centers in Groton said he is hoping a lawsuit will change the town’s mind on new regulations to limit the size of data centers.

    Nicholas Fiorillo, who is the manager and CEO of Gotspace Data Partners, filed a lawsuit in state Superior Court in New London on July 14 ― the effective date of the new regulations ― against town officials and a competing data center developer. He said he is seeking an injunction to prevent the town from adopting the regulations.

    Fiorillo wants a court order enforcing agreements he said he has with Groton, a trial, and “costs, fees and damages in excess of 5 Billion dollars,” the lawsuit states.

    A hyper-scale data center project typically ranges in size from 150,000 to 350,000 square feet, he said in the lawsuit.

    Town Manager John Burt said the town has not been served with the lawsuit, so at this point, the town is not involved.

    Fiorillo alleges in his complaint that certain town officials and NE Edge LLC, a competing developer whose principal he once partnered with, have been conspiring to block Gotspace’s plans for data centers in Groton.

    “The NE Edge Racketeers and certain deep state Town of Groton operatives, are in clear violation of state and federal laws under RICO,” Fiorillo claims in the document.

    Burt said there is no justification for the lawsuit.

    “It’s just something to try to prompt the PZC to change their mind on the (regulations),” Burt said.

    Fiorillo alleges in the suit that meeting agenda items “were set down specifically to derail the Plaintiff’s plans to develop data centers in town, by regulating and limiting their size to under 12,500 square feet, and rolling back all of the attractive development benefits and conditions that Plaintiff had negotiated in good faith, and contracted to develop within the Town of Groton.”

    He also claimed in the lawsuit that the town’s moratorium on data centers, while the Planning and Zoning Commission crafted regulations, “chilled both the sellers of the land and the Data center industry as a whole” and put off potential investment into the data campus project.

    “Gotspace is hopeful the town will reconsider allowing Gotspace to move forward with its development...” Fiorillo said by phone this week.

    In April 2021, the town and Gotspace signed a host municipality agreement for a proposed site off Route 117, which is the first step in potentially developing large-scale data centers. A 2021 state law enables tax incentives for data center developers investing in Connecticut, but requires them to sign agreements with the host municipality that outlines the revenue they will provide to the municipality, among other criteria.

    Beyond the host agreement, developers also need to secure land use and other approvals and purchase the land to build a data center.

    City of Groton Mayor Keith Hedrick said Groton Utilities signed a letter of intent with Gotspace but it was not executed so it never turned into a formal agreement, known as a Power Purchase Agreement. The city and Groton Utilities are not named as defendants in the suit.

    In 2022, NE Edge, which formed after Fiorillo and his former partner parted ways, requested a host municipality agreement with the town for a data center site between Hazelnut Hill Road and Flanders Road, south of Interstate 95. The Town Council in March 2022 voted to discontinue "all efforts to pursue a municipal host fee agreement" with NE Edge, after residents raised concerns about the data center proposal.

    In June 2022, the Planning and Zoning Commission implemented a moratorium on large data centers so it could create regulations. On June 27, 2023, the commission adopted regulations that conditionally allow data centers of up to 12,500 square feet in industrial zones and set parameters, such as requirements to have a fire suppression plan and not use fossil fuel, except if power is suddenly lost. Data centers would also be required to abide by the state’s noise standards.

    Town responds

    The recent filing in state Superior Court lists the Town Of Groton “Select Board” and planning and zoning boards, and individually lists Assistant Planning Director Deborah Jones and Town Councilors Portia Bordelon, Rachael Franco, Juan Melendez, Bruce Jones, Juliette Parker, David McBride and Scott Westervelt and former Town Councilors Aundré Bumgardner and Melinda Cassiere.

    Burt said everybody from the town, including volunteers, is covered by the town’s insurance, if they’re acting in their capacity as town officials and provided they don’t violate the law.

    The lawsuit also names individuals associated with data center developer NE Edge, who declined to comment.

    Bordelon, concerned that the councilors were named individually, said she is hoping to meet with the town attorneys and the town manager on how to proceed and what the ramifications are for being individually named.

    Burt said he spoke with the town attorneys, who advised him there is nothing to be done because the town has not been served. Burt also told the council that they did not have a role in the regulations.

    Burt said he has not received a referral for the topic to be put on a council meeting agenda.

    Bumgardner called the complaint “pretty fascinating.”

    “If you read the suit, it’s completely incoherent,“ Bumgardner said. ”It’s loaded with typographical errors and poor sentence structures.“

    Other town officials listed in the lawsuit did not immediately respond to a request for comment or declined to comment.

    k.drelich@theday.com

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