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Home My WebLink About06.04.24 Planning and Council Work Session, incl. presentation AGENDA Special Work Session Meeting 4:00 PM - Tuesday, June 4, 2024 Farmington City Hall, Council Chambers Page 1. CALL TO ORDER 2. APPROVE AGENDA 3. DISCUSSION ITEMS Introduction - Tract, Data Center Development Team No action requested. This is for informational purposes only. Agenda Item: Introduction - Tract, Data Center Development Team - Pdf 2 - 40 4. CITY COUNCIL COMMITTEE UPDATE 5. CITY ADMINISTRATOR UPDATE 6. ADJOURN Page 1 of 40 SPECIAL WORK SESSION AGENDA MEMO To: Mayor, Councilmembers and City Administrator From: Deanna Kuennen, Community Dev Director Department: Community Development Subject: Introduction - Tract, Data Center Development Team Meeting: Joint Planning Commission and City Council Work Session - Jun 04 2024 INTRODUCTION: A recent rezoning application has generated interest and questions about a proposed development on the south side of Farmington. The developers, Tract, is a data center and land acquisition company specializing in master planned data center and technology parks. The Tract team will attend the meeting to introduce their company, their planned approach to data center development, and address concerns expressed at the recent Planning Commission public hearing. DISCUSSION: Following the Planning Commission public hearing held on May 14th, Staff and the Tract team recognized it would be beneficial for the Planning Commision and City Council to have the opportunity to discuss the proposed development planned in Farmington. The purpose of this meeting is to provide information about Tract, why this site in Farmington, and address concerns that have been expressed. The intent is to provide factual information and answer questions that the City Council and Planning Commission have regarding the proposed development and identify a development site detailed more to access includes that forward moving process public information and provides more opportunities to engage with the development team. The topics that will be addressed include: 1. Introduction of the Tract Team 2. Data Center Overview 3. Why Farmington 4. Infrastructure Needs 5. Noise and Traffic 6. Job Creation 7. Economic and Community Benefits 8. Sustainability 9. Next Steps This is not a public hearing - but rather an information session to address questions raised by Planning Commission and City Council. Staff will also be available to provide information on City processes, public infrastructure, and overall development opportunities. BUDGET IMPACT: Page 2 of 40 Not applicable ACTION REQUESTED: No action requested. This is for informational purposes only. ATTACHMENTS: 240604 Joint Worksession Presentation Page 3 of 40 Farmington, MN June 4, 2024 Joint Work Session with Planning Commission & City Council Pa g e 4 o f 4 0 Who We Are Tract is the trusted partner for planning responsible technology infrastructure. We create opportunities that bring economic development to communities What We Do Tract Business Model: Acquire raw land, create shovel- ready data center sites via, zoning, horizontal investment and infrastructure positioning We are reliant upon positive and cooperative relationships within the communities where we work. We are committed to developing these relationships and accountable to maintaining them for the long term. Access to Capital: We are well positioned to make capital commitments to our project sites and the communities where we develop. Value Proposition (Communities): Thoughtful Master Planned approach Value Proposition (End User): Speed and CertaintyBlenheim Project – Hanover County, VAPa g e 5 o f 4 0 3 Leadership Jessica Bennett Chief Legal Officer L5 Be Well Grant van Rooyen Chief Executive Officer Graham Williams Chief Investment Officer Heidi Diemar Chief Business Officer Todd Stockard Chief Financial Officer Matt Spencer Chief Technical Officer Jeff Cox Chief Innovation OfficerNat Sahlstrom Chief Energy Officer Pa g e 6 o f 4 0 7 01 Proper Planning When cities master plan growth, data centers, along with other critical infrastructure (i.e., airports), are best located away from residential centers. 02 Good Neighbors New data center builds are aesthestically pleasing, and generate minimal traffic, noise, or light pollution. 03 Community Partner with Positive Economic Benefits Data center companies are actively engaged in the local community,investing millions in education, parks, and critical infrastructure. 04 Stewardship Major data center operators have among the most aggressive climate targets globally. Net Zero by 2030 Community Impact When part of a thoughtful land use plan, data centers are good neighbors. Pa g e 7 o f 4 0 5 Farmington Tract Team Local Consultant Team Alan Catchpool, PE Ashley Payne Pa g e 8 o f 4 0 What We Do 6 Site Acquisition Deep experience architecting / siting networks and data center platforms Long-term orientation and focus to masterplan scale and efficiency Secure water rights and infrastructure Power Procurement Advance generation and transmission planning Contract transmission upgrades and substation builds Exclusive renewable energy PPAs and behind- the-meter solutions Construction Development Site grading and preparation Power, fiber, water extensions where needed Public and private access and easement master- planning Entitlements Master plan and appropriate zoning approvals are achieved through partnership with local jurisdiction Development agreements and other necessary approvals are finalized that set the course for continued development of the site. Pa g e 9 o f 4 0 What We Have Accomplished Active Markets Construction Development Entitlements Currently in over 10 markets across the US Successful approvals in multiple jurisdictions Breaking ground on multiple projectsPa g e 1 0 o f 4 0 Why We’re in Farmington, MN Power -Existing 345kV on property -Positive relationship with GRE and Dakota Energy Site -Adequate Site Access -Availability of water -Positive environmental qualities Connectivity -Important Site that fits architecturally into overall data network Local Economy -Emerging data center market in Minnesota -Excited to bring economic benefits to Farmington Pa g e 1 1 o f 4 0 7 Why are we Here Tonight Following City’s Rezoning Process Heard concerns and questions expressed at the May 14 PC Hearing Re -assessed process with Staff PUD process allows us to present more information up front and have more robust engagement with the community Pa g e 1 2 o f 4 0 7 Farmington Site Location Two Sites (348 ac): Fountain Valley Golf Club & Farmington Public Schools Total Developable Area: 205 ac (59%) Access from 220th / MN 50, 225th St. & Biscayne Ave. Existing power line south of the site Pa g e 1 3 o f 4 0 Tract Processes 11 Rezoning + PUD Overlay •Development Standards •Building Setbacks •Height •Parking •Landscaping •Development Areas •General Access locations •General Utility Layout •Street Standards •Identification of Environmental Features Preliminary and Final Plat •Establishes lot boundaries •Location and types of streets •Location and size of sewer lines and water mains •ROW dedication •Easements •Traffic Alternative Urban Areawide Review (AUAR) •Environmental review process •Fish, wildlife, and ecologically sensitive resources •Physical impacts on water resources •Water Use •Water Quality-Wastewater •Impact on infrastructure and public services •Erosion and sedimentation •Geologic hazards and soil conditions •Traffic •Archeological, historic, and architectural resources. •Mitigation Plans Pa g e 1 4 o f 4 0 Tract What we have heard 12 Concerns & Questions about: Location Noise Traffic Water use Power Tax Generation Sustainability Alternative uses Broader community benefits Need more informationPa g e 1 5 o f 4 0 Tract Power 13 Site is ideally suited with the 345kV line + planned infrastructure upgrades. Tract is engaged with Great River Energy & Dakota Electric Association (“Utilities”) Proceeding with Service Application and engineering studies to interconnect to the grid. Site is located at the eastern and southern edges of Farmington. Pa g e 1 6 o f 4 0 Tract Traffic 14 Traffic Impact Study Completed April 2024 Average Daily Trips At full build-out, campus will generate 273 Employees 2,498 Average Daily Trips projected Road Improvements MN 50 – Eastbound right and Westbound left turn lanes. MN 3 & 225th St. – Northbound right and Southbound left turn lanes. Optimize signal timing at adjacent intersections. Pa g e 1 7 o f 4 0 Tract Water and Wastewater 15 Taking advantage of Minnesota’s temperate climate, Tract is assuming that future DC developers will utilize Direct Evaporative Cooling (DEC) By using outside air that is pulled through a water saturated medium, DEC is the most cost-efficient way to cool a DC while using minimal water Capital Improvement Plan (CIP) to support Comp Plan Update Campus water and sewer capacity to be included in CIP DC industry is motivated to utilize reclaimed water Water and Wastewater Use System Infrastructure Impact Pa g e 1 8 o f 4 0 Tract Noise 16 Noise is regulated by the Minnesota Pollution Control Agency (MPCA)  Residential (NAC 1): 60 -65 dBA daytime / 50-55 dBA nighttime Data Centers are categorized as NAC – 3 Noise from data centers cannot create noise that exceeds the dBA on adjacent residential property. Noise Studies Pa g e 1 9 o f 4 0 On-Site Generators 17 Noise Attenuation Generator Enclosures Exhaust Mufflers/Bellows Noise Deadening Material Louvers Air Permitting / Emissions Strict emissions standards per the Clean Air Act must be met All diesel generators require an EPA certified engine Permit limitations on generator run time EPA limits the following constituents as part of its emissions standards: Non-methane hydrocarbons Volatile Organic Compounds Nitrogen Oxides (NOx) Particulate Matter Carbon MonoxidePa g e 2 0 o f 4 0 Tract Sustainability 18 Hyperscalers have Environmental, Social, & Governance (“ESG”) goals to meet based on corporate policies which encourage companies to act responsibly. The data center industry is a major buyer of “Power Purchase Agreements” for renewable energy. 2021: Amazon and Microsoft were the two largest corporate buyers of renewable energy in the world through PPA. Meta : Operations for their DCs have already reached net zero emissions and are supported by 100% renewable energy Google has a goal to run on 24/7 carbon-free energy on every grid where they operate by 2030. Microsoft, Google & Meta have a goal to replenish more water than they consume by 2030. Tract: ESG policy / Collaboration Agreement with Silicon Ranch align advanced renewable projects with future Data Center development in Nevada and Utah Pa g e 2 1 o f 4 0 Job Creation *The Impact of Data Centers on Virginia’s State and Local Economies 5th Biennial Report (April 2024)– Northern Virginia Technology Council 19 1.Data Center Operations (277 permanent jobs): •Network Engineers •Computer Programmers •Computer Support Specialists •Database Administrators •Computer Research Scientists •Security •HVAC 2.Construction Jobs: •Electricians •Mechanical Engineers •Utility Contractors •Plumbers •Steel Workers •Grading Contractor 3.Indirect Jobs : “For every job inside a Virginia data center, there are 3.5 additional jobs that are supported in the rest of the Virginia economy, not counting construction jobs.”* U.S Bureau of Labor Statistics Entry Level Education 2022 Median Annual Wage Computer & Information Research Scientist Computer and information research scientists design innovative uses for new and existing computing technology.Masters Degree $137,000 Computer Network Architects Computer network architects design and implement data communication networks, including local area networks (LANs), wide area networks (WANs), and intranets. Bachlor's Degree $127,000 Computer Programmers Computer programmers write, modify, and test code and scripts that allow computer software and applications to function properly. Bachlor's Degree $97,800 Computer Support Specialists Computer support specialists maintain computer networks and provide technical help to computer users.$59,660 Computer Systems Analysts Computer systems analysts study an organization’s current computer systems and design ways to improve efficiency.Bachlor's Degree $102,240 Database Administrators & Architiects Database administrators and architects create or organize systems to store and secure data. Bachlor's Degree $112,120 Information Security Analysts Information security analysts plan and carry out security measures to protect an organization’s computer networks and systems. Bachlor's Degree $112,000 Network & Computer Systems Administrators Network and computer systems administrators install, configure, and maintain organizations’ computer networks and systems. Bachelor's Degree $91,000 Pa g e 2 2 o f 4 0 Positive Economic Impacts to City of Farmington 20 Total 20 Year Estimated Tax Receipts $ 325,000,000 Average Annual Estimated Tax Receipts $ 16,000,000 Max Annual Estimate Tax Receipts $ 29,000,000 $0M $5M $10M $15M $20M $25M $30M $35M Real Property Tax Forecast for City of Farmington Examples for how funds can be allocated: •Schools, •Emergency services & First Responders •Increased salaries and benefits for employees •New parks & upgrades to existing parks •Upgrades to water and sewer infrastructure. Pa g e 2 3 o f 4 0 Community Benefits 21 Hyperscalers are recognized as providing significant contributions towards communities beyond tax generation: AWS: STEAM learning opportunities and pathways, partners with local educational organizations to connect the workforce with careers in data centers and technology Meta: Community Action Grants, STEM contributions, small business trainings Google: STEM grants, Skilled Trades and Readiness Program (STAR) Microsoft: $1.9B given to nonprofit organizations last year Tract •Storey County, NV: Exploring opportunities for community involvement such as sponsoring the County Middle and High School robotics team. Henrico County, VA: $60M Housing Trust Fund created from data center taxes.  Louden County, VA: Reduced property taxes due to significant tax collection on data centers (2020 = $333M) Designed by Freepik: www.freepik.com Pa g e 2 4 o f 4 0 The Takeaway: 22 This project presents a unique mix of high fiscal impact and low infrastructure and public services impact. Expecting to grow to well over $16M annually of property tax receipts over 20 years Creating ~277 high quality permanent jobs over 20 years Variety of positions accessible to Farmington residents E.g. Electricians, HVAC techs, IT techs, engineers, security guards Transmission lines adjacent to the site on the south side. Water use will be less than medium density residential on the site Partnering with City on area-wide infrastructure improvements Low traffic impact Traffic for data center use at full build-out will be less than what would be generated for commercial development, low- density or high-density residential development. High Fiscal Impact Traffic ImpactLow Infrastructure Impact Smart Development, Without Disruptive Growth Pa g e 2 5 o f 4 0 Annexation of FPS Property Today Feb March April May June July Aug Sept Oct2024 City Council Hearing / Approval Application and Review Process Schedule 23 Application & Review Process Preliminary & Final Plat AUAR & Mitigation Plan Feb March April May June July Aug.Sept.Oct.Nov.Dec. 4/15 Rezoning 5/14Planning Commission Public Hearing 6/4Joint PC / CC Worksession + Initiate PUD Process TBDPrelim PUD Submittal TBD TBDPrelim PUD Planning Commission Hearing TBDPrelim PUD City Council Meeting TBDFinal PUD Planning Commission Meeting TBDFinal PUD City Council Meeting Application & Review Process TBDPrelim Plat Planning Commission Hearing TBDPrelim Plat City Council Meeting TBDFinal Plat Planning Commission Meeting TBDFinal Plat City Council Meeting Application & Review Process TBDCity Council Meeting to Adopt AUAR Rezoning Community Meeting Opportunity for Public Comment Pa g e 2 6 o f 4 0 Tract Project Website 24 •Launch Date: TBD •Project Information •Project Updates •Timeline •FAQs •Contact Information Pa g e 2 7 o f 4 0 Thank you Pa g e 2 8 o f 4 0 26 Pa g e 2 9 o f 4 0 Tier 2:Indirect Tax Impact Taxes on sales / property with the data center supply chain Income tax on construction workers, data center operations staff, and individuals in the supply chain Tier 1 Tax Generation Taxes paid directly by data center operators on investment including real estate,personal property, business license, utility, and sales tax on equipment Tier 3: Job Creation Each direct job associated with the project could see ~3 indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others. Hundreds of additional construction jobs through the life of the project. Data Centers are economic drivers. Potential Economic Benefits Pa g e 3 0 o f 4 0 Other Questions 28 •Impact on property values •Impact on parkland •How is this different from other industrial development •Impact on livelihoods •Difference b/t private vs. commercial DCs. •What happens if DCs not built? PUD will control that. Pa g e 3 1 o f 4 0 On-Site Generators 29 Generators are used for back-up power 3MW generators are industry standard Fuel Storage Fuel is stored in individual “Belly-Tanks” which are double-walled and monitored for leaks Generators are protected on site through use of bollards and other traffic deconflicting measures Re-Fueling Overfill Protection Valves Fill port containment boxes Spill Prevention, Control and Countermeasure (SPCC) plan must be in place at each facility Generator Testing Industry Standard: 30 min/month @ 30% load Industry is moving towards: 10 min/month unloaded with annual 30 min test at full load.Pa g e 3 2 o f 4 0 On-Site Generators 30 Fuel Vents Secondary Containment Structure (Monitored for leaks)Protected Fuel Storage Support Structure (Typical) Typical Belly Tank Design Typical Belly Tank Section Fuel Fill Overflow Box and Overfill Prevention Valve Engine Fluid (Coolant and Oil) Containment Primary Tank Leak Alarm Switch Fuel Level Sensor Cluster Pa g e 3 3 o f 4 0 31 Why are data centers important? Data centers house critical infrastructure in our modern economy with customers across every industry and supply technologies we use everyday. NEWS MEDICAL RECORDS ONLINE BANKING STREAMING PHONE USE / SOCIAL MEDIA SMALL BUSINESS REMOTE WORK SPORTS FIRST RESPONDERS February 2024 Hanover Public Hearing Pa g e 3 4 o f 4 0 Tract Cooling Systems 32Image by Freepik.com: <a href="https://www.freepik.com/free-ai-image/n-server-room-you-ll-notice-green-lights-signaling-energyefficient-operations_77714031.htm#fromView=search&page=1&position=1&uuid=83f3a093-c3b5-46c7-bc0a- 0edb9a919799">Image by rorozoa on Freepik</a> Indirect Evaporative Cooling (IDEC) •Fluid-cooler utilizes water evaporation to cool air flowing through an external dan-driven air-to-water heat exchanger to remove heat from the data center and return chilled cooling to it. This is a “closed-loop” system that circulates cool air within and does not require potable water. •When outside air is cool enough, the fluid cooler will switch to dry mode, using no water at all. Direct Evaporative Cooling (IDEC) •Utilizes the direct evaporation of water to produce significant cooling and humidification with low energy consumption. Outside air is drawn through a wet medium. Water evaporates and delivers cool air into the data center. Pa g e 3 5 o f 4 0 Tract Cooling Systems 33 •Direct-to-chip cooling:Direct-to-chip cooling systems are among the most effective methods for cooling an entire server room because they cool the processors directly. This technique uses flexible tubes containing fluid that absorbs the heat and carries it away from the equipment. •Evaporative cooling:Because evaporative cooling relies on the natural evaporation of water to cool an area, it is one of the most economical and environmentally friendly cooling processes. This method draws warm air across a wet filter or pad to absorb the heat, then redistributes the remaining cool air. Some evaporative cooling methods use water distributed from a misting system, which works well for data centers with humidity controls. Pa g e 3 6 o f 4 0 Tract Water and Wastewater 34 - 50,000,000 100,000,000 150,000,000 Data Center Low Density Residential High Density Residential Gallons/Year De v e l o p m e n t T y p e Estimated Yearly Water Usage on Site Taking advantage of Minnesota’s temperate climate, Tract is assuming that future DC developers will utilize Direct Evaporative Cooling (DEC) By using outside air that is pulled through a water saturated medium, DEC is the most cost-efficient way to cool a DC while using minimal water Estimates show that the water use to support DEC cooling on this site are below the water usage if the site was development as medium density residential City is undertaking system-wide utility improvements and finalizing a Capital Improvement Plan (CIP) to support the 2040 Comp Plan Update Campus water and wastewater usage will be included in CIP and additional infrastructure will be constructed to support campus development City considering creating a reclaimed water system – reducing the need for domestic water to cool the DCs Water and Wastewater Use System Infrastructure Impact Pa g e 3 7 o f 4 0 Potential Economic Impact 5 Tier 2:Indirect Tax Impact Taxes on sales / property with the data center supply chain Income tax on construction workers, data center operations staff, and individuals in the supply chain Tier 1 Tax Generation Taxes paid directly by data center operators on investment including real estate,tangible property, business license, utility, and sales tax on equipment Tier 3: Job Creation Each direct job associated with the project could see as many as 3.5indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others. Hundreds of additional construction jobs through the life of the project. Data Centers are economic drivers. Tier 4: Community Contributions Each direct job associated with the project could see as many as 3.5indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others. Hundreds of additional construction jobs through the life of the project. Pa g e 3 8 o f 4 0 Tract Noise 36 Noise is regulated by the Minnesota Pollution Control Agency (MPCA) For residential locations (NAC 1), the limits are L10 = 65 dBA and L50 = 60 dBA during the daytime (7:00 a.m. – 10:00 p.m.) and L10 = 55 dBA and L50 = 50 dBA during the nighttime (10:00 p.m. – 7:00 a.m.) Data Centers are categorized as NAC – 3 Noise from data centers cannot create noise that exceeds the dBA on adjacent residential property. A noise study is underway. Noise generated from on-site equipment can be mitigated via: Building, equipment and generator orientation Shielding of equipment with walls, berms, and landscaping Silencers, mufflers, and enclosures Vibration isolators Equipment selection Designed by Freepik: www.freepik.com Pa g e 3 9 o f 4 0 Economic Impacts to Farmington Public Schools if Residential Built 37 Medium density residential development would cost the FPS district $3M to $5M /year. Data Center development will add 0 students and pose no impacts to the school district. The school district and the City will benefit from a positive tax contribution from data center development. Pa g e 4 0 o f 4 0