02-04-2025
Consultant calls data center economic impact study conclusions "middle of the road"
The author of a study touting the economic benefits of a proposed data center development project in the Falls' South End says its conclusions— hundreds of millions of dollars in new tax revenues and the creation of 'almost 1,000 jobs per year on average' — are not an 'unsubstantiated set of alleged facts.'
Michael N'doio, national director of Economic Development Services at MRB Group, a Rochester-based consultancy, said in an interview with the Gazette that even if his estimates were 'wildly optimistic' the data center project being pushed by South End land owner, Niagara Falls Redevelopment (NFR), is 'better than anything in Niagara Falls right now.'
'Let's say (my estimates are) wildly optimistic, and it's only half of my numbers, and I stand by my numbers, even half of this benefit is better than anything in Niagara Falls right now,' N'doio said.
In discussing the study last week, Niagara Falls Mayor Robert Restaino described its conclusions as, 'a pretty enthusiastic, but I think, unsubstantiated set of alleged facts.'
N'dolo's 24-page study, evaluating the economic benefits of NFR's proposed $1.5 billion Niagara Digital campus, projects it would result in 'more than $414 million in additional tax revenues' for the city, county, state and local school district, over a 20-year period. He also claims that the data center development would create 'almost 1,000 jobs per year on average' with estimated earnings of '$1.66 billion over 20 years.'
Mayor Robert Restaino has called the projections 'pretty enthusiastic' and an 'unsubstantiated set of alleged facts.'
N'dolo admits his estimates assume that NFR will complete construction of all nine buildings that make up the campus over a nine-year period and that the development will be 'fully occupied by year 10.' The project calls for a '1.2 million square foot, 140 megawatt, high-capacity data center, comprised of nine buildings equipped with state-of-the-art server halls, network infrastructure, office space, and mechanical/electrical support areas.'
'Ten years ago, this would have been aggressive,' N'dolo said. 'But not anymore. Data centers are in a class all by themselves.'
He said his jobs projection follows a formula of four full-time jobs for every megawatt used in the proposed center.
'It's the industry standard', N'dolo said, 'based on existing operating data center standards, based on their actual (employment). It indicates how many computers are in use.'
The MBR study says that 'over the course of 20 years, the digital campus will support 19,238 job-years (which is inclusive of construction jobs, permanent jobs, and indirect jobs).' An average of almost 1,000 per year.
However, the actual number of projected jobs, ranges from between 943 to 1,457 per year during the project construction phases, before dropping to no more than 771 (550 direct jobs and 221 indirect jobs) over the course of the remaining 10 years of the study's estimates.
The study also concludes those jobs will lead to $1.66 billion in earnings. The underlying basis for that estimate is not contained in the report or its footnotes.
N'dolo insisted the projections related to jobs and wages used 'middle-of-the-road assumptions.'
Neither NFR nor its partner in the proposed project, Toronto-based construction company Urbacon, have confirmed any potential tenants for the data center, but N'dolo said the identity of prospective tenants would not impact his projections.
The study suggests that the proposed data center project would provide substantial property and sales tax revenues to the city, the Niagara Falls City School District, Niagara County and the State of New York.
Over a 20-year period, the MRB study concludes that the Falls and its school district would receive 'approximately $298 million in new property, sales and gross tax receipts.' It estimates Niagara County would receive '$54 million in new property and sales tax revenue' and New York State would collect 'approximately $63 million in sales tax revenues from the project's energy usage.'
The MRB study calculates what it calls a 'property tax savings to a 'typical' owner of an average-priced single-family home,' concluding that the homeowner would 'save approximately $14,603 over 20 years' or 'an average of approximately $730 per year.' The consultant defines the 'savings' as 'revenues that the city and school district otherwise would have to collect via their respective tax levies.'
'It's not that people's taxes will go down by $14,000. Taxes don't go down,' N'dolo said. 'But over 10 years, you'll pay less in taxes (if the project) is here, more if it's not here. Collectively, you'll pay less in taxes.'
