Good morning, everyone.
the meeting of the
The meeting of the committee on economic capital technology
development is called to order.
development is called to order we will not have a roll call
to establish Quorum. Please note that your present response
will be deemed a yes vote when this quote.
will be deemed a yes vote when this quarum calls used as a
reference vote for later.
Uh, Miss Munoz. Please call the roll.
chairman viegas
Vice chair Mosley Pres
Vice chair Mosley present
alderman laspata
Alderman Hall
Alderman Mitchell
Alderman Chico
alderwoman Lee
alderwoman Gutierrez
Alderman Lopez
alderwoman Tavares
alderwoman Cruise
Alderman Cardona
alderman waguespack
alderwoman mitts
alderman napolitan
Alderman Napolitano present
Alderman Reilly
alderwoman Mana hoppenworth
We have 12 members present.
Thank you. Ladies and gentlemen, we have a quorum.
time. We will begin the public comment period
comment is limited to 30 minutes out of respect for
everybody's time each speaker.
everybody's time. Each speaker is limited to 3 minutes.
I've been informed that we have 3, um people.
I've been informed that we have 3, um people that have
signed up for public comment within the applicable
provisions.
Provisions the sergeant-at-arms. And also we have received
1 written comment which is in your folder at this time.
I'm sorry.
and
And Mitchell, too.
May um, we have I've been informed that we have 2 members.
of the committee that are on on Zoom. May I have a motion
to allow them to participate remotely?
to allow them to participate remotely ultimately allows
them to allows alderman napalitan.
them to allows Alderman napala Tano.
and Alderman Mitchell to participate
And Alderman Mitchell to participate uh via remote.
hearing no objection, so
hearing no objection so ordered
Uh, please add Alderman to Pallet Town.
Mitchell to the to the role.
Um, our first speaker is uh, Lou weeks.
l
Good morning, Mr. Chairman good.
good morning, Mr. Chairman. Good morning.
My name is Lou weeks and I'm the Executive Vice President
of United Here Local 1 Chicago.
of United Here Local 1 Chicago's Hospitality Workers Union.
I am here today to urge you to vote. No on the class L for
the proposed.
the proposed Hospitality development at 465 West szarmach.
The developer is seeking this lucrative property tax.
The developer is seeking this lucrative property tax break
while Chicago residents are seeing a spike in their own.
property taxes.
2 recent hospitality
2 recent Hospitality developments show that a better path is
possible.
possible the city of Chicago approved class.
possible the city of Chicago approved class L incentives
for the canopy by Hilton at 226 West Jackson in 2020. And
for the LaSalle Hotel at 208, South Lasalle.
for the LaSalle Hotel at 208, South Lasalle in 2021.
today both hotels Prov
Today both hotels provide family sustaining wages and
affordable High.
affordable high-quality health insurance for their
Hospitality workers.
Unfortunately at this point we have no reason to believe.
that the developers of 465 West serach will.
that the developers of 465 West serach will provide a path
to good jobs for Hospitality workers.
to good jobs for Hospitality workers as other developers
have done again, I urge you to vote.
have done again. I urge you to vote. No. Thank you for your
attention to this matter.
Thank you, Mr. Weeks. Our second speaker is
Dora Ruiz
Good morning, everyone. Good morning.
My name is Dora Reece. I work at the canopy by Hilton.
226 with Jackson. I start working in there in.
226 with Jackson. I start working in there in 2022 as a
room attendant. I live in the Southside Market park with
mongus.
monga's daughter my hotel have a class L task break.
monga's daughter my hotel have a class L task break and
have a good job with our earning.
have a good job with our earning 25,000 an hour and I have
quality in health.
quality in health insurance having a good job changed my
life. I'm a Child store on my work.
life. I'm a Child store on my work and I see it change to
Co-workers too. People can travel more and they take their
care to the doctor. I live a better life now and they make
because we make 25,000 an hour and a good health insurance.
because we make 25,000 an hour and a good health insurance
every Hospitality work in Des.
Every Hospitality work can deserve the chance to have a h a
job.
job like my unfortunately the developer.
job. Like my unfortunately the developer of 465 West CMA
has not prom.
has not promised to create a pet to the good Hospital.
jobs. I hope you will be both note of the class L for 465
West German.
German. Thank you.
Thank you, Mr. Miss Ruiz.
Uh, next speaker is uh, Jesus.
Uh, next speaker is uh, Jesus Rodriguez.
Good morning, chairman and ladies and gentlemen.
morning. My name is Jesus Rodriguez and I work as a
houseman.
houseman at the LaSalle Chicago hotel at 208.
houseman at the LaSalle Chicago hotel at 208 Southwest
South I started working there when the hotel opened.
South I started working there when the hotel opened in June
2022 my hotel got a class L tax break and I have a good job
where I earn.
where I earned $25 an hour and have high called.
where I earned $25 an hour and have high called the the
affordable health insurance.
affordable health insurance having a good job changed my
life. I live in the 23rd Ward.
life. I live in the 23rd Ward near Midway airport with my 3
kids. I'm proud to be.
kids. I'm proud to be able to support my family as a hotel
worker.
more people in my neighborhood deserve to have a good job
like mine. Unfortunately, there's no guarantee that workers
like me.
like me at 465 West cerak will have a path to good
hospitality jobs. I hope that you will know on the class L
for 4.
for 465 Wester. Thank you.
Thank you, Mr.
As I stated we have 1 written comment that's in your folder
from Unite Here Local 1.
That concludes the public comment.
that concludes the public comment period
the first order of business is approval of the January 2024
monthly report which all members of the committee should
have received are there any questions or comments?
committee regarding the report?
Seeing no questions. May I have?
Seeing no questions. May I have a motion to recommend
approval of the January 202?
approval of the January 2024 monthly report by the same
roll call vote. It was applied to the term Quorum Vice
chair Moses so moves here, no objections.
chair Moses. So moves here. No objections. So ordered items
1 through 16 on the agenda are a series.
1 through 16 on the agenda are a series of appointments and
re-appointments a very special service.
re-appointments a very special service areas introduced by
Mayor Johnson during the January 24.
Mayor Johnson during the January 24th. 2024 city council
meeting. The following individuals are being considered
before the committee.
1 through 4 a reappointment of a Thomas hospace Maria m
sarapas Frank J, Caputo and Anastasia mcrad
sarapas Frank J Caputo and Anastasia macro dakati dakati
uh to SSA number 16
um Greek Town hosted commission located in the 34th Ward
items 5 through 7 are reappoint of Jason.
items 5 through 7 are reappoint of Jason are across Anthony
aquam and Nicholas a yassan to SSA number 21.
aquam and Nicholas a yassan to SSA number 216 Lincoln
Square Commission.
Square commission located in the 40th and 47th wards.
number 8 appointment of Jacob Jacob ringer to SSA number 23
Clark Street, Lincoln Park commission located in the 43rd
Ward.
appointment of Adam Silverstein to SSA number 33 wigger
Park and Bucktown commission located in the first and 32nd
wards.
items 10 through 15 reappoint of atob cosion
items 10 through 15 reappoint of atob coone Mark H Davis
Kenneth, Dodson
Kenneth Dodson, Michael hawer tiffen Joss weak and Kevin J
Greco to SSA number 35.
Greco to SSA number 35215 Lincoln Avenue commissioner.
located in the 43rd Ward.
reappointment number 16 Reich
reappointment number 16 rike L Christensen to SSA number 60
Albany Park Comm
Albany Park commission located in the 33rd 35th and 40
warts
at this time mark
At this time Mark Roshan the assistant commissioner with the
Department of Planning and Development to answer any
questions.
and the members
the ECT
the ectd team has confirmed the support or non-objection
for the following.
for the following council members with appointments that re
appointments within their respective.
appointments within their respective impacted Rewards.
Alderman Conway Alderman Martin Alderman Vasquez alderman
laspada
Laspada, Alderman waguespack ottoman kuden
alderwoman, uh Rodriguez Sanchez ottoman
alderwoman, uh, Rodriguez Sanchez ottoman Ramirez Mo
Ramirez, Rosa
uh, most commissioner candidates were unable to
today for today's meeting. However, I'm in support.
appointments and re-appointments at this time with any of
the members.
the members of the committee or council members like to
make a statement or ask any questions.
make a statement or ask any questions to the uh, Deputy
Commissioner.
Okay, seeing none if any appoint.
Okay, seeing none. If any of the appointees are reappoint
these are present and would like to make statement at
time. Please indicate. So are there any commissioners?
like to make an appointment make a statement?
Seeing none.
May I have a motion?
May I have a motion to recommend approval of the
appointments reappointment by the same roll call?
was applied to determine Coram.
aluminum and
Aluminum and lie so moves here in no objection, so ordered
to do pass recommend.
to do pass recommendation of the appointments and reappoint
will be reported out.
will be reported out at the next city council meeting.
Appointees and reappoint. Congratulations on your
confirmation and partnership with the city. We look forward
to working with you.
item 17 on the agenda is an ordinance to approve the
issuance of a class sale tax incentive for property at 46.
West Cermack in the 11th ward introd
West Cermack in the 11th. Ward introduced by Mayor Johnson
during the January 2024.
Um, January 24th 2024 city council meeting.
a leash toffee coordinated
A leash toffee coordinated coordinating planner for the
Department of planning and development is here.
Department of planning and development is here to present
in support of the item and will be available to answer any
questions.
You also have the following members of the develop.
the property at 465 was CME.
the property at 465 was CME here at a comment to answer any
questions.
Eddie knee the owner of windfall development brig
the attorney Jerry albam vice president of construction.
management for windfall development.
all fish mine project manager
And David Martin.
and David Martin the tax attorney.
a leash
Alish please been begin the presentation when you are
ready.
Thank you chair.
Thank you chairman vagus for the record. My name is Alicia.
Tuffy preservation planner with the Department of planning
and development.
and Development the ordinance before you is in support of a
class all.
a class all property tax incentive for 465 West Sur.
a class all property tax incentive for 465 West Sac. The
building is a contributing building in the Sur.
building is a contributing building in the serac road
bridge Landmark District, which was designated on April
26th. 2006.
as you know, the class all
As you know, the cloud sell property incentive is a special
real estate tax.
real estate tax assessment classification adopted.
real estate tax assessment classification adopted by Cook
County to encourage the preservation.
County to encourage the preservation and Rehabilitation of
landmark buildings. The Proposal is to rehabilitate the
vacant building.
vacant building for mixed use included including
restaurants retail a Swim School.
restaurants retail a swim school a grocery store Food Hall.
medical service.
professional office and an extended stay hotel
The property is located in the 11th ward.
Department of Planning and Development received a letter of
support from alderwoman Lee
exterior work includes brick Limestone and Terra Cotta
repairs as nessus
repairs as necessary tuck pointing and cleaning of the
facade.
facades where needed repair of existing windows.
facades where needed repair of existing Windows removal of
non-historic window infill.
non-historic window infill installation of replacement
windows to match a
windows to match historic proportions and mutton patterns
rooftop.
rooftop solar panels new Skylight glazing.
rooftop solar panels new Skylight glazing creation of 2
open are Courtyards within the top.
open are Courtyards within the top floor and redesign of
the existing loading dock.
Next slide please.
Covered arcades will be carved out within the exist.
Covered arcades will be carved out within the existing
building envelope at both the Grove Street entrance which
faces the street.
faces the street and the west elevation at the river level.
Plus a new sunken entrance.
Plus a new sunken entrance along Grove Street for direct
access to the river.
access to the river level. Um, this will be in place of the
Riverwalk improvements. Um, the embankment is very shallow
here. So the developer has instead proposed to create a
publicly accessible Riverwalk portion at the river level on
the back side of the building.
the interior scope of work includes retention of the
historic Surak road entrance Lobby and stairs demolition of
all inter.
all interior, non-load-bearing walls and ceilings EX
all interior, non-load-bearing walls and ceilings exclusive
of the smack Road Lobby.
interior stair upgrades and and and
Interior stair upgrades and re and or replacement to meet
current code requirements.
current code requirements concrete repairs 4 new elevators
new me.
new MEP and HVAC systems Fire Protection.
new MEP and HVAC systems fire protection system
construction of new demising walls.
construction of new demising walls per plans and
preparation of common areas.
preparation of common areas to white box build out
condition for the future.
condition for the future tenants.
Next slide please.
When completed the class all project will comply.
When completed the class all project will comply with the
50 point sustainability policy requirement.
50 point sustainability policy requirements the class I'll
improvements are estimated to be completed.
improvements are estimated to be completed in 2026.
the minimum investment required for eligibility for the
class L incentive is 4.9 million.
class L incentive is 4.9 million plus the value of any tax
credits.
credits that the project receives.
the
The applicant will be spending 32.2 million.
The applicant will be spending 32.2 million in qualifying
rehabilit.
Rehabilitation expenses for the building as part of this
project.
Total project costs are estimated to be.
Total project costs are estimated to be 40.8 million, which
does not.
does not include the acquisition costs for the property.
Next slide Yep this slide.
Um
um Department of Planning and Development has estimated
that the total tax abatement to the applicant over the 12.
years of the incentive is approximately 15 and a half
million dollars.
million dollars, which is net present value.
million dollars, which is net present value 11 11, um 0.4.
million dollars.
the city's share of that tax abatement is estimated at
The city's share of that tax abatement is estimated at 3 and
a half million dollars or approximately 2.6 million Net
Present Value.
currently the annual taxes on the property
Currently the annual taxes on the property which has been
vacant for approximately 20.
vacant for approximately 20 years.
are 24
Are 242150.
at the end of the class L tax incentive period those taxes
on an annual basis will
on an annual basis basis will rise to 2.8.
on an annual basis basis will rise to 2.8 million dollars
annually.
During the 12 years that the class all.
During the 12 years that the class all is in place. The
property is estimated to generate.
property is estimated to generate approximately 6 and a
half million dollars more.
half million dollars more taxes than if the building had
not been rehabilitated.
It's anticip.
It's anticipated that the project will generate 350.
temporary construction jobs and 500 permanent jobs.
when the vacant building is Ari
When the vacant building is reactivated.
to qualify for the
To qualify for the clasele the city council must support
Grant.
granting the incentive.
the commission on Chicago landmarks has reviewed the budget
and scope of work for the project and along with the
Department of Planning and Development recommends approval.
representatives of the applicant are here to
Representatives of the applicant are here to answer any
questions about the project and this Con.
questions about the project and this concludes my
presentation.
Thank you is.
Thank you. I leash was that 6.5 million a year?
6.5 million is during the 12 years that the class.
6.5 million is during the 12 years that the class L is in
place. The property is estimated to generate.
place. The property is estimated to generate approximately
6.5.
6.5 million more in taxes than if the building had not been
rehabilitated. Thank you. I appreciate that the clar.
clarification.
Um aloman Lee is also president to comment on this.
Um aloman Lee is also president to comment on this matter.
We received a letter of support from ottoman Lee.
this ordinance ottoman Elite. Thank you chairman. Um, I am
really thrilled to be hearing this item and committee
today. Um it we've been working on this project for
some time, uh with dpd.
some time, uh with dpd, um as well as the developer, um,
Mr. Eddie knee and the windfall group.
property is uh has sat vacant for about 20 years, uh, many
people have tried.
people have tried all of them have failed in the past to uh
to get something to work in here. You may have noticed in 1
of the images. That was shown there are a lot of columns in
this building.
this building and that is inherently 1 of the biggest
challenges.
challenges of um, an adapt.
challenges of um, an Adaptive reuse of this, um historic
property, so,
property. So I'm I'm thrilled that we're going to have an
opportunity to put in uh an amazing mixed.
Here that will serve our community that will be the gateway
to Chinatown. Um from the from the south and the West. Um,
it also happens to be neighbors to local 399, um through
this,
this uh through this particular opportunity.
this, uh through this particular opportunity. Um, some new
relationships have also been forged with the Union.
relationships have also been forged with the Union um there
as well and in partnership with
there as well and in partnership with the Chinatown Chamber
of Commerce, Mr. Jimmy Lee, who's the
of Commerce, Mr. Jimmy Lee who's the president of the
Chinatown Chambers also here today.
Chinatown Chambers also here today, um in support of this
initiative, um, I think the numbers don't lie what we heard
from dpd in terms of the Improvement. Um, the
from dpd in terms of the Improvement, um the Improvement to
uh, what the city's going to get.
to uh, what the city's going to get um, in terms of a tax
base. That's uh more than 10
base that's uh more than 10 times. Um what the city is
is garnering today, um, and this type of red
takes investment and then I think that's exactly what this
uh, 6L, uh incentive is for um,
uh, 6L, uh incentive is for. Um, I want to acknowledge, uh
local ones presence here today. When was able to have a
conversation um with them?
Before uh the meeting started today.
Before uh, the meeting started today, um, and I've
committed to making sure that we sit down and have a
meeting.
meeting with the developer and with myself, um of
expectation that um, there will be good paying union jobs,
um throughout this process,
um throughout this process. I know that on the construction
side, there are already, um, working, uh to ensure that
prevailing wages are being paid and you have Union uh union
workers.
union workers bringing this, uh, bringing you life to this.
Hoy building. Um, so uh with that I
Asked for everybody's favorable support.
Asked for everybody's favorable support on this, uh class L.
Thank you. Thank you.
Ottawa mitts
the chairman. Um, I just wanted to commend um looking for
uh this project um as
uh this project, um, as it was given the description of it,
uh,
uh sound exciting especially here in the city if we
take out,
vacant property
Vacant property 20 years of vacancy and bring it back to
life.
life and including all the amenities that a community could
want.
want I can see the change in the community with just this
project.
project alone. So I think it's uh, um with my pleasure to
congratulate you.
congratulate you on and your community.
congratulate you on and your community for um,
working on the project along with the unions and bringing
all the partners together.
all the partners together hotels and swimming pools.
think that is just awesome. So, uh, congratulations and we
looking forward to supporting this project for you.
Thank you all all the movements Alderman Cardona.
Thank you chairman.
Um, I want to congratulate my colleague.
Alderman Lee
looking at this structure. Um
it's to me it's historic and it's
It's to me it's historic and it's gonna look very um
appeal.
appealing once things are done and especially you're going
to bring 500 jobs to the community. That's a big thing.
and everybody knows we always want to bring jobs back to
our to our community to our districts and this is 1 tool
that we have to do it.
so, um, I
I support ultimately in this this.
this um Construction
This um construction but the class L is only for 13 years.
So it we have to give
incentives in order for us to gain so this is a risk we're
taking and it's a great risk because gonna um, it's gonna
go back to the property tax.
go back to the property tax base and it's going to bring
jobs. Thank you so much.
Thank you, Alderman Cardona.
any other questions from Members I
Any other questions from Members? I had a question for the
development team around the m.
development team around the mwbe participation.
Could someone from the develop development team?
My name is Bridget O'Keefe. I'm a partner with Das.
My name is Bridget O'Keefe. I'm a partner with daspin and
Alma and I'm here today on behalf of the development team.
Thank You Bridget. I just wanted to um see what the plan.
was for mwb participation on this project. Um, we have
committed to a goal of 26 and 6.
committed to a goal of 26 and 6 with 50% City residency.
Thank you. That's what we wanted to hear. Thank you for
your investment and in the city.
your investment and in the city looking forward to continue
working with you.
working with you, um to make this project come to fruition.
yeah, before we before we
Yeah, before we before we take a vote, I want to recognize
uh other women gutter.
uh other women guitarists in the 14th Ward for purposes of
quorum.
Um, are there any other questions?
from
From the committee members. All right seeing none. May I
have a motion to recommend pass of this item by the same
roll call vote?
roll call vote as was applied to establish Quorum on Roman
lie so moves here.
lie. So moves here no objection so ordered
the due pass recommendation
strike that yeah pass out of committee.
item 17 on the agenda is a
Item 17 on the agenda is a cough for hearing is on the
state of Illinois.
state of Illinois data storage security. This hearing is
being held to provide.
held to provide the city council with an opportunity to
learn more about why storing data within the state of
Illinois can be beneficial by reducing both jurisdictional
and security concerns.
and security concerns as many of you know, the physical
location of data is critical.
location of data is critical for determining which country
controls that data when the data stores facilities is not
located in the United States. They're in there's an
increase of security risk current.
increase of security risk. Currently. The state of Georgia
has a policy in place where it requires.
has a policy in place where it requires All State data to
be stored only on server.
be stored only on servers within the United States.
um we
Um, we have a substitute that has been circulated and
provided to the members may have a motion to um accept the
substitute.
ultimate lasp
ultimately, so uh accepts The Substitute even objection so
ordered
now that the substitutes in front of you may have a motion
to recommend approval of this hearing by the same.
to recommend approval of this hearing by the same roll call
was applied to establish.
was applied to establish Quorum alderwoman M of Happiness
so moves here in
So moves here no objection so ordered
um today we will hear from Buddy Riser the executive
director for the low.
director for the Loudoun County Department of Economic
Development in Loudoun County, Virginia.
Development in Loudoun County, Virginia under buddies
leadership. This is Department was named the 2021 Economic
Development.
Development organization of the Year by the international
Economic Development Council, but he has helped build.
Economic Development Council, but he has helped build data
center Ali into the largest concentration of data centers
in the world. He has extensive International
Development and Technology.
uh experience in many countries around the world
Uh experience in many countries around the world buddy.
Looking forward to hearing from you. Thank you. It's an
honor to be here tonight. And uh, I appreciate Mr. Chair
and the orderman here and it's um,
and the orderman here and it's um lden county has over the
last 17 years become the largest concentration of data.
centers, uh anywhere in the United States. Um, and in fact
in the world, we do think that uh, it has made a
transformational change in our community and I look forward
to discussing that with you.
I think you committee.
Um, our second speaker is um
Ross Lincoln House the founder and managing partner of
Calvary real estate advisors the last 12 years Ross has
been a trusted advisor within the data center industry
providing fiscal and economic impact.
providing fiscal and economic impact studies to support
land use entitlement efforts.
Is written white papers and satisfied in front of numerous
state and local legislative.
state and local legislative bodies regarding the economic
environmental impact.
environmental impact of data centers that help guide policy
decisions. Uh, you'll both you'll find both of our our
speakers.
speakers bios in the packet in your folder as a reminder
there.
There will be no votes taken on this resolution today. Uh,
speakers, please begin when you're ready.
Thank you chair.
Thank you chairman, uh honorable committee. Appreciate your
time here today. Um, I want to start off talking and gonna
you're you're controlling our presentation. Okay, somehow
lost my reading glasses between
Security in here, so I'm going to
Security in here so I'm going to be literally Flying Blind
just a little bit. Um
We are uh currently living.
We are uh currently living uh in the next era of the modern
digital.
modern digital economy, um everything that we touch from
business to government.
To healthcare to finance is AB.
To healthcare to finance is absolutely immersed and
enveloped in.
enveloped in data. Uh, it is an inevitable trend.
enveloped in data. Uh, it is an inevitable Trend that is
accelerated over the last 15 years, uh about the amount of
time that buddy and I've known each other living in
Northern, Virginia.
Northern Virginia, uh, and that acceleration is growing
exponentially.
um
globally each day. Uh, we send about 350 billion email.
Globally each day. Uh, we send about 350 billion emails.
YouTube subscribers watch close to a billion hours worth of
video each and every day
uh
and the origination of data just over the last year net new
data globally.
Um
is
Is enough to fill?
97 billion iPhones that have an average store capacity of
256 GB
the amount of data that's originated. Globally just over
the last year, uh has doubled and that's not including the
existing data that all of us have consumed and accessed and
used to analyze.
used to analyze uh, and run effectively the entirety of the
Western World As We Know It
western world as we know it. Um, that inevitable trend is
leading to
an inevitable demand for additional data storage dat
warehouses data centers
uh and staring down this
Uh and staring down this inevitability.
that comes with a very great responsibility, um a vigilance
and um living in Northern, Virginia.
and um living in Northern Virginia, uh on the back steps of
data center Ali
data center. Alley Where 70% of the world's internet
traffic flows through every single day Loudoun County also,
my backyard
um, there is a vigilance that
Um, there is a vigilance that comes with.
How we treat our data?
How we treat our data the date of our constituents the date
of our customers?
and with that vigilance
And with that vigilance, uh comes a need to control where
that data is stored.
to prevent
access from nefarious actors, uh, whether it's GE.
stability.
or
local actors such as what's happening at Larry Hospital.
local actors such as what's happening at Larry hospital
right now, um holding
right now, um, holding patients doctors and a city hostage.
for their data.
and I know this uh, because I sat in a similar seat that
you did. I served as an elected official uh in Northern,
Virginia.
and taxpayer data keeping
And taxpayer data keeping it local under our control, uh
and under our watch.
and under our watchful eyes is incredibly important.
but the real story here behind data centers and the
presentation that was just made about um, the conversion of
that manufacturing facility.
that manufacturing facility in the fiscal is that it brings
to uh, the city of Chicago.
to uh, the city of Chicago, uh, is is the real um champion
of the data center story. Uh, and so
I want to start this conversation. Uh
On the fiscal impact the data centers bring to a Juris.
jurisdiction. I am an unabashed evangelist.
jurisdiction. I am an unabashed evangelist, uh for more
data center development in the right places.
data center development in the right places smart
development forward development.
And it's because it's transformational.
And it's because it's transformational for jurisdictions,
and there is no greater case.
and there is no greater case study for that than Loudoun
County which Buddy's going to put a fine point on this.
So Gianna if you wouldn't mind advancing to the first
slide.
Let me be very very clear. Um over my 20 year commercial
real estate career. I've had the benefit of analyzing the
fiscal and economic impact.
fiscal and economic impact of every flavor of real estate
development and asset type on planet Earth.
Data centers are the highest net positive fiscal prod.
real estate asset type.
known to man period
Nothing drives a higher fiscal return.
to development efforts than data centers
next slide
1 in a trend that in some cases is missed.
1 in a trend that in some cases is missed from both elected
officials Planning Commission.
officials Planning Commission constituents businesses when
hand ringing over.
hand ringing over mixed-use developments or hand ringing
over hospitality.
over Hospitality, uh, adaptive reuse, we just heard here
today.
Is the fact that data centers?
really related to that inevitable Trend that I mentioned do
not have the same tip dips and valuation that you would see
in the same thing that we saw in crashing assess.
seen the same thing that we saw in crashing assessed values
and the Great Recession. Um the same ISS
and the Great Recession. Um, the same issues that we've
seen in both office and Hospitality coming out of Co
seen in both office and Hospitality coming out of coid data
center valuation and stability.
center valuation and stability around assessed values and
taxable values have continued on an upward Trend and that
hockey stick trend is going to continue for all the
that I mentioned at the beginning of my statement. These
are engines of Commerce that operate in the background of a
jurisdiction like little ATM machines that pump out
tremendous amounts of fiscal Revenue. They are truly a
Golden Goose.
next slide
What's also very?
What's also very important as we think about the
advancement of data centers?
advancement of data centers which again more data centers
because we need more control.
because we need more control of data taking data out of the
cloud.
taking data out of uh, InterContinental, uh fiber lines
that are running into countries where we simply do not have
control over our
control over. Our own data is the fact that every data
center that is built the return on the public service costs
relative to other
costs relative to other asset types is incredible.
on average for every fifteen dollars that a data center
brings to a local jurisdiction in terms of local tax
revenue. It's about 1 dollar spent on public service cost
other assets.
other asset types are close to 3 to 1.
They don't have the same public.
They don't have the same public service costs and an
apartment building or a mixed-use project would bring.
apartment building or a mixed use project would bring it is
a pure fiscal wind.
a pure fiscal windfall to a jurisdiction.
next slide Janna
I want to put a finer.
I want to put a finer point on the amount of capital
investment that comes along with data.
investment that comes along with data centers.
into a jurisdiction
the real estate alone the Box the concrete and steel.
the real estate alone the Box the concrete and steel box
whether it's 1 store or 5 stories.
cost about a thousand dollars per square foot
the equipment that goes inside of that data center is about
2.
2 thousand dollars per square foot the amount of capital
investment that goes into these data centers simply cannot
be matched and your return on that effort to a
jurisdiction.
again, both in terms of policy decisions around
controlling.
and protecting your constituents, uh data as well as the
fiscal return that it brings to a jurisdiction and the
surrounding community.
surrounding Community are enormous.
Janna
and I want to end with Community impact before I hand this
over to to buddy for a very real.
over to to buddy for a very real very impactful case study.
That is the community impact that this brings to a
surrounding jurisdiction when you think
surrounding jurisdiction. When you think about the
community that these data centers serve and the jobs that
they create each data center. Call it 2
they create each data center call it 2 250 square feet will
require about 3.
require about 3,600 individuals And Trades to build.
require about 3,600 individuals And Trades to build those
data centers, and they usually create
between 120 and 150 full-time high-paying jobs
jobs that Usher in high salaries
jobs that usher in high salaries and benefits to
jurisdictions as part of the modern digital economy.
jurisdictions as part of the modern digital economy and
create sustained revenue and in some cases.
generation wealth building for the jobs
Generation wealth building for the jobs that the
individuals have that work inside of these data centers.
So we have an inevitable trend.
So we have an inevitable Trend that's necessitating more
data storage.
if it
If it doesn't happen here, we're in Illinois. It's going to
happen.
happen somewhere else again, that trend is inevitable.
We have a need to house the data.
We have a need to house the data from our constituents from
our taxpayers.
our taxpayers, uh from the customers that we serve in data
centers to control and secure.
and then more importantly the fiscals that
centers bring pound-for-pound Undisputed heavyweight. So
want to hand it off to Buddy for uh a case study here on
Loudoun County, which really is the darling of the data
center industry and could talk about how transformational
these data centers can be to local.
these data centers can be to local economies, buddy.
Thank you Ross.
It's an honor to be here today. I have the unique
privilege.
of speaking on data centers all over the world. Um so far
in 2024. I've been in Oman. I've been in Dubai.
in India. I've been in Hawaii. I've been in New York all
talking about data centers, which is unusual given that I
am not a technologist.
I'm actually an economist and an economic.
I'm actually an economist and an economic developer.
but I wanted to give you a little bit of
But I wanted to give you a little bit of context about what
the data center.
the data center industry has meant to my community.
the data center industry has meant to my community when I
first joined Loudoun County 17 years.
first joined Loudoun County 17 years ago. Our economy was
struggling.
81% of our tax revenue came from residents from the
homeowners tax.
homeowners tax bills.
when the housing crisis
when they housing crisis hit
home values went down
home value went down that meant our tax revenue went down.
Our tax rate went up to a12.
Our tax rate went up to 1.285 per 100.
We were laying off.
We were laying off citizens in our community we
cutting back on Services. We were.
cutting back on Services. We were slowing development of
schools. We were not paying our employees.
schools. We were not paying our employees any raises for up
to 6 years.
My charge was to grow the commercial.
My charge was to grow the commercial tax base. How do we
get above 19% of?
get above 19% of our tax base in order to?
get above 19% of our tax base in order to diversify our
economy in a way that is less.
economy in a way that is less, uh less of a challenge for
our homeowners.
our homeowners and we luckily at that time.
our homeowners and we luckily at that time decided to
attempt to attract data.
attempt to attract data centers.
data centers at first were a little
Data centers at first were a little bit of a hard sell for
my community.
my community because uh, we had 1 uh elected official who
famously said to me I don't understand.
famously said to me, I don't understand if everything's
going to the cloud. Why do we need data centers?
Of course, we need data centers.
Of course, we need data centers because that's where the
cloud is.
We were looking at growing in a way.
We were looking at growing in a way that could diversify
our economy in a very smart and and and uh and sustainable
way.
way but what we never saw coming was
way. But what we never saw coming was the unique
transformation of data that would enable us to completely
turn around our economy.
turn around our economy if you go to the next slide
You'll see the increased Revenue that we have.
You'll see the increased Revenue that we have seen from
data centers this year.
data centers this year alone, Loudoun County will receive
data centers this year alone. Loudoun County will receive 1
billion dollars in local.
billion dollars in local tax revenue for data centers.
1 billion dollars that is one
1 billion dollars that is 1 third of our overall budget.
Is being paid by about 8% of our land?
We have about 3.
We have about 32 million square feet of data center on the
ground and Loudoun County.
ground and Loudoun County about 3.2 gigawatts of power. Um,
and we have another about 4 million square feet that are
currently under develop.
currently under development.
When you look at those numbers.
when you look at those numbers you think wow that is just an
amazing Trend and it really is there hasn't been 1 day
without.
without data center Construction in Loudoun County now.
without data center Construction in Loudoun County now for
16 years. Think about what that means.
16 years. Think about what that means to the construction
industry. Think about an electric.
industry. Think about an electrician that no longer has to
go on the road.
go on the road to work. He can go from sight to sight in
his own.
his own community be home at night to see his kids.
his own community be home at night to see his kids play
soccer or attend a ballet recital.
soccer or attend a ballet recital, uh, think about the way
that it impacts even the hotels and the restaurants and the
shopping opport.
shopping opportunities because you have all of this money.
staying in our community.
So let me wrap up by giving the next slide and just
about the context and what?
about the context and what data centers mean to our
citizens.
citizens as I said, it wasn't that many years ago.
citizens. As I said, it wasn't that many years ago that our
tax rate was a dollar.
tax rate was a 1.285.
today we've been able to
Today we've been able to thanks to Data Centers reduce our
tax.
tax rate by 41 cents.
on an average home price of
On an average home price of 670 thousand dollars, that's
over.
over 2,700 a year.
over 2,700 a year saved for our residents.
and remember this is
And remember this is at a time when we're building dozens of
new schools.
new schools putting a billion dollars into local Road.
networks and bringing the DC Metro to our community. We've
been able to start an affordable housing.
been able to start an affordable housing fund using a half
penny of our tax.
penny of our tax role to go just to affordable housing
program. We've created new state and Regional
program. We've created new state and regional parks and at
the end of this budget year. We are going to have a surplus
of 198 million.
Think about the impact that that has made in.
think about the impact that that has made in my community
we've gone from having a struggling economy to today being
what US News and World Report says is the healthiest local
economy anywhere in the United States.
So with that we're happy to take whatever.
So with that we're happy to take whatever questions you
have and I appreciate your attention.
Thank you. Uh
Thank you, uh buddy and Ross for that presentation and
anytime we're talking about opportunity to create Revenue.
for the city. I think my colleagues are all ears. So are
there.
there any questions from the committee members?
well
Yeah, Alderman the spot. So thank you very much for your
presentation gentlemen, and of course as the chair said we
are always.
are always looking for.
um re
Um Revenue opportunities. I wanted to ask because there's
I'm very curious as we're thinking about our power.
about our negotiations with kmed.
about our negotiations with kmed what it looks like from a
local power grid.
local power grid, um capacity to have so such a
concentration of data centers how
concentration of data centers. How is Loudoun County
adapted to that?
well
Well, I I think we did some smart things early on. Um, we D
identified where we wanted.
identified where we wanted data centers by and large. It
was up and down where the high voltage lines were if you
look at a map of Loudoun County north and south east and
west where the high voltage lines are. That's pretty much
where the FIB.
where the fiber corridors are where it's where we have
installed recl.
installed reclaimed water lines to cool data centers, and
that's where the power lines are. Um, we have
traditionally not had any issues with being able to meet
power demands, uh that changed.
power demands, uh that changed about 2 years ago, uh as the
uh, as Co and AI started to drive more demands, so we are
currently working.
currently working very hard with the local grid operator
with our power companies to try to determine how do we meet
this future goal. I believe that understanding the future
of the grid and being pro.
of the grid and being proactive and determining how to
reach that is the biggest challenge in front of uh, not
only the data.
Center industry but our communities um when you think about
Center industry but our communities, um when you think about
how do we get to more Renewable Power?
how do we get to more Renewable Power today data centers
are the largest
purchaser of Renewables anywhere in the world. Uh, but it
is important that when you consider your opportunity that
you consider the Grid in that and you can consider the
power lines because you can't have these services.
power lines because you can't have these services without
the infrastructure that comes with it. Um, it is a very
complex story and and and 1 that's really been un under
reported. Uh, there's more and more discussion about now.
How do we make sure
how do we make sure that the grid is not only Greener but
more resilient and and I think that that is something that
has to be considered as you go through your planning
process. It sounds like when you talk about it that the
presence of high tension power lines in that area of low.
Loudoun County was
critical for the development of
Critical for the development of data centers is that
accurate to say?
I would say yes, that's accurate. Um.
I would say yes that's accurate. Um 1 to 1 additional point
of context that that I wanted to layer on to that.
of context that that I wanted to layer on to that comment
because it's a great question because power is the entire
story.
story, um availability of power transmission of power. Um,
and the renewable story is incredibly important.
and the renewable story is incredibly important and Central
because the data center industry as a whole recognizes the
fact that
it is going to take more than
coal burning power to drive the
power needs of a modern digital economy the advancement in
technology.
technology across the data center industry just over the
last 5 years is is is in it's mind-boggling. Um, we are
moving away from traditional evaporative cooling which is
what's been most of the power draw which is the traditional
type of cooling that you would see that consumes a lot of
water and energy. It's like sticking, uh, data center
servers and compute.
servers and compute in a room and just turning the air
conditioner on to some extent.
where the industry is moving now, uh into liquid
cooling. Um, I just had an interesting conversation with
company called submer out of Barcelona Spain last week. Uh,
and they are building these pods which basically have a
dielectric viscous liquid which not to get too complicated
but it allows you to drop the actual servers to compute
into this viscous liquid almost like maple syrup. Uh,
it allows it to cool and dissipate the heat as opposed.
just sitting them on racks and having the cooling take care
of cooling the entire room. Um, so the data,
of cooling the entire room. Um, so the data center industry
is moving very very quickly, uh to address some of these
power.
concerns um because power is the story and there is a
recognition amongst the in the industry that with this
inevitable trend of needing more data storage and
capacity. We also have to solve for for power.
capacity. We also have to solve for for power consumption
issue.
Got it. Thank you very much. Thank you chair.
any
Any other questions from members?
Um, there was a slide up there that talked about the job
the permanent.
the permanent jobs that are created. Can you talk about the
average compensation for?
average compensation for those jobs?
Yes, and I think that the part of this is the wide variety
of jobs that are created, uh everything from security to
of jobs that are created, uh, everything from security to
cyber security to uh technicians.
cyber security to uh, technicians and and the uh, the
operations, uh, the average salary in in a Loudoun County.
operations, uh, the average salary in in a Loudoun County
data center is uh, considering everything is about 6,
data center is uh, considering everything is about 68,000 a
year. Um, but the majority of the jobs inside the data
center are 6-figure jobs. Um, so it's it's a wide variety
of jobs, and that does not take into account.
of jobs and that does not take into account the the
specialty jobs that are created.
specialty jobs that are created during construction.
There's about 15,000 jobs in and around the data.
industry with a total ecosystem of of closer to 40,000
jobs.
Um is how is Loudoun County? Um
besides the tax revenue
Um, how are you guys monetizing the data? Are you guys?
Are you guys um making any revenue from?
Are you guys um making any revenue from the data itself?
Um, we're we're really not. Um, we have uh, we have looked
at ways.
at ways to do that. Um, but we have been also very
cognizant of the amount of impact that the revenue and the
difference. It's making in our community. Um, we get about
15% of all of our tax revenue of that billion.
15% of all of our tax revenue of that billion dollars, uh
from the taxing the buildings the actual real property tax
the other 85% comes from personal property tax. Um,
it's also important to note that um, when
it's also important to note that um when you see these, uh,
the the servers
uh, the the servers and the chillers and those things those
are uh depreciating ass
are uh, depreciating assets that are replaced every 3 or 4
or 5 years.
or 5 years, so it goes from you know, depreciating we start
at 50% you go down to you know 30
at 50% you go down to you know, 30% but by the time you get
to 20% they replace it and you so you're you reset. Uh,
that's an important part of our of our taxing methods.
Further to your question, uh, Mr. Chairman. Um, I have seen
some um, but that the state and local level prymrr.
some um, but that the state and local level primarily at
the state level, um this intersection between
the state level. Um this intersection between um, Maryland,
Maryland, uh sports book and gambling is a great example.
um, where they have required the data that is kept on the
users that gamble in data centers that are located in
Maryland. So while it's not a direct monetization of the
data there is this
data, there is this um partnership so to speak uh to make
sure that um the revenue that's been benefiting.
sure that um the revenue that's been benefiting, uh, the
state, um, the users that are producing that Revenue, uh,
and the companies that are collecting that Revenue are
housing.
housing the data on those users and data centers in the
State. Uh, so they
State, uh, so they have tighter control. So it's not a
direct monetization in the same way.
direct monetization in the same way that we talk about it
for maybe a social media perspective, but we
to see more of that, uh as as local governments,
to see more of that, uh, as as local governments and state
governments recognize the interplay between digital.
infrastructure, uh, and other revenue streams that that
they're producing through their own efforts. Yeah, buddy.
What's the average size of the data center?
in London County
it it's been growing and we're seeing a trend to larger
data centers. Um, we're seeing uh really data.
anywhere from 150,000 square feet.
anywhere from 150,000 square feet, uh to a new building a
new 5 story.
new 5 story huge building that's going to be close to a
million square.
million square feet in in our County. Um, so it it really
it depends on the business model and who the user is, um, I
think that uh, we'll continue to see that wide disparity
depending on the business model.
Thank you. I appreciate any other.
Thank you. I appreciate any other questions from the
members.
Um, I'd like to recognize Alderman Lopez for a quorum and
all and vice mayor, uh Bernett non-member.
all and vice mayor, uh, Bernett non-member, uh in
attendance.
Listen, this is been.
listen, this is been a great presentation and um
we're
We're going to continue to stay in touch because I think
that any opportun.
that any opportunity that we can take a look at making
these Investments.
these Investments repurposing vacant land creating revenue
for the city.
for the city sustainable revenue for the city. I think it's
something that's very uh is piqued my interest for sure.
given the fact that the ARP money has, uh, it's about to
dry up and as we move forward we'll be looking to find new
Revenue. So this is definitely an option so
Revenue. So this is definitely an option. So I appreciate
uh, buddy and Ross.
uh, buddy and Ross your your participation in today's
hearing.
uh, and again looking forward to staying in touch so that
way we can learn more about what uh, Loudoun County is
doing and how they're benefiting.
doing and how they're benefiting their their residents.
Thank you for this opportunity.
Thank you. Um
All right.
Ladies and gentlemen being that there's no further
business. May I have a motion to adjourn by the same roll
call vote as with apply.
call vote as with applied to the term Elder woman crew so
moves hear me no objection. So ordered meeting of the
committee on econ.
committee on economic cabinet technology, uh development is
adjourned. Thank you, everyone.