[SoftTalker]

There are a lot of jobs during construction.

There are very few jobs during operation. Mostly site security and a few tech support staff. There will be some steady work for maintenance contractors, but that's much less than the initial construction.

[nixgeek]

I mean, you’re right, but when the alternative is all that investment and those construction jobs AND the post-commissioning operational jobs go to a different community and a different economy, …

What would you prefer? To me, local communities tend to benefit in multiple different ways during and after these projects, poorer communities become richer, communities with little opportunity now have more opportunity. I’m always a bit baffled by someone saying “Please don’t invest $5B and create 100s of jobs and taxable improvements in my back yard”.

This is a common argument: wanting 1000s of jobs during construction and 1000s of jobs after construction, but this isn’t a car manufacturing plant. That’s a “we want our cake and we want to eat it too” argument — not saying it’s your argument just that this comes up frequently.

[jeffbee]

It makes more sense when you realize that the same people also don't want anyone new living in their town, so they do not perceive any value to new jobs, only costs.

[SoftTalker]

But what often happens is that the company is granted a ten year tax abatement in exchange for the jobs, the jobs end up being fewer than promised, and then in ten years the company closes the site and now the community has an empty industrial brownfield that was built for one thing and can't be easily repurposed.

[nixgeek]

Datacenters rarely get mothballed after 10 years, they’re usually 15-year depreciation schedules in terms of the building and the plant. Equipment within them like servers typically depreciates over 72 months but is rarely removed by hyperscalers promptly after 6 years. More typically it’s around Year 8.

So you won’t see the building cease being useful for about 20 years. You’re getting usually two full cycles of “the servers inside” before a renovation program (or potentially asset/building disposal to another party, or demolition, depending what changes in those 20 years really).

What’s often happening around these tax agreements is they are a mixture of incentive and an offset of prepaid improvement costs to the city/county for developing mains water, sewer, roads, schools, fire and police, and other infrastructure, sufficient to support the 100s of families who may move here to take the post-commissioning jobs, etc.

Often money out the door for the hyperscaler is about the same over 20 years, it’s just some number of $M’s is paid upfront as an “Contribution to Improvements”. That’s actually good for the municipality involved, too.

Municipalities typically know or are told these aren’t tax rebate for 10 years and then it’s getting bulldozed. They’re sophisticated enough and well advised to understand this is a 20+ year investment in their town.