Oregon hosts data center forum

City of Oregon officials and the Regional Growth Partnership (RGP) hosted a data center forum on Nov. 19 at Fassett Junior High.

Tom Hamway, the president of the Regional Growth Partnerships Foundation, served as the master of ceremony for the event.

“The RGP is the lead economic development agency serving Northwest Ohio,” he said. “Our mission is to help existing industry grow in our region and to attract industry which can utilize the business assets that we have in our region. We like to say this work results in wealth creation — wealth creation for individuals who find jobs and careers, wealth creation for companies that can operate at a profitable level, and wealth for communities because community gains tax proceeds from a vibrant economy.

“The RGP is privately funded by the business community in the region and neither our organization or its employees earn any compensation if a business locates in the region or not. One of our primary objectives is to attract new industry to our region, and that's why we are hosting tonight's event. It is the RGP that first worked with Capacity LLC to find a suitable location for their high-tech industrial development.

“The purpose of tonight's event is to give Oregon residents and citizens the opportunity to interact with Will Turner of Capacity LLC. The reason for this interaction is for Oregon citizens to get clear answers from the developer of an Oregon project about questions and concerns regarding the project.

        Mayor Mike Seferian also commented prior to the Q and A portion of the event.

“The reason I would like to start with is why we're here today and why we’re considering a data center,” he said. “When any politician runs for office, economic development is always a key topic. Everybody wants to develop. Everybody wants to have funding so that they can expand city services. The city of Oregon is no different.

“I myself, love the city of Oregon. I've lived here almost all my life. I've spent 34 years as an elected official. It is something I take very seriously.”

Seferian discussed how the idea first came about.

“Usually, the city gets its money from payroll income tax, but being that this is a mega project, the state of Ohio allows us to do things called 'payment in lieu of taxes,’ which does create a big revenue stream for the city of Oregon,” he said. “The city of Oregon has many city services, but no matter what services we have, we have to live within the budget of the money we have to achieve those. A lot of people want their streets repaved right away. We prioritize them and get to them when we can.

“The more money we have available, the quicker we can get to someone's personal needs from the city's standpoint. We recently expanded our city services in our Oregon Fire and Rescue. We had what was called a paid on-call fire system, that almost every community around here found is not working. Their call demand is so great that we can't ask people to get out of bed at night, two or three times a night, and come and meet the needs of the people who call.

“We fully staff our fire department now, but it is quite a cost increase to the city. We have three ways of achieving that cost. Number one would be raise taxes, whether it would be the local property tax or the payroll income tax. Either of those two, it was deemed by those in power in city council to not be the real deal desirable way.

“The second would be cut other city services so that we could achieve our safety services and Oregon Fire and Rescue. And no one really wanted to do that. And the third was to achieve a new revenue stream.

“A data center has the ability to do that, and it does at very little impact. In our industrial area, a lot of people got used to bean fields, corn fields, or just vacant land. They're thinking, well, we'd rather have a corn field or a bean field or vacant land than industry. But that's not really what the choices are. It would be a manufacturing plant, some type of heavy industry, or a large building that is designed to be very attractive with very minimal impact to the city.

“And with that payment in lieu of taxes, it actually generates more money for ourselves and the Oregon school system than we were looking at any other project achieving. With any project, there's always negatives. People are creatures of habit. Change. It scares people. It does me. I was a little concerned at first.

“The more I learned about this project, the more comfortable I got. Of course there will be an impact. But when you're comparing it to heavy industry or a manufacturing plant. I think to this day, I've asked people, what could bring revenue? They say, ‘well, it's about the money?’ Of course it's about the money.

“If we didn't need money, we could leave it a cornfield. A cornfield doesn't bring any revenue to the city of Oregon, but we actually would like to expand our services. And we would like to simplify the ones we have. It is about money. And to this day, no one has come forward with any other possible industrial venture that could bring a revenue source even close to this with less impact than the data center would bring.”

Seferian then introduced Will Turner, who represents Capacity LLC.

“Will is from Virginia,” he said. “He's been involved in industrial real estate for over 15 years and, beyond developing data center sites, Will actively consults with companies and communities to build strategies to help communities prosper.”

“I'm a developer,” Turner said. “And I have a couple of different companies. I've got Upterra Group, which I've used for site selection development consulting, industrial-based consulting for communities. Capacity LLC is my development company, and so data centers are a big part of what we do. I’ve focused on data centers now specifically for about a decade, and what I do is I create a product.

“The analogy I like to use is if you have piece of raw metal that you machine or you bend, you fabricate it somehow into a value-added product, you've taken raw material and turned it into a value-added product. I do that with land. I take raw land and turn it into data center land. I do this through getting the sites entitled, energized, and environmentally sound to develop on.

“The entitlement process is related to the zoning, (making) sure I have the political approvals to build the projects and my customers can build the projects that they want on the properties that I provide to them. The energized standpoint is power. I was making sure there's enough power on the grid to supply the project. We're now looking at on-site generation in the industry as a solution moving forward.

“On the environmental side, we check to make sure that we are not infringing upon any wetlands, that we are not having any environmental impact. In this instance, there's an example of us having abandoned wells on the site that we're working to plug up with ODNR (Ohio Department of Natural Resources), and the city is helping us with that.

“I started doing this in Loudoun County, Va. If anyone's been tracking, reading up on data centers, you've probably heard of Loudoun County, Data Center Alley, Ashburn, Va. That's my home base. I had the honor of serving on the Maldon Economic Development Commission for a number of years, and I was exposed to this industry right as it was starting to grow.

“From that, we ran into a lot of challenges that, in that area, we were trying to deal with. Water was one of them. As an industry, water has been a challenge that we've worked to address, and I'll talk a little bit more about that this evening.

“I thought that it might be good to start with, what is the purpose of the data center? Why are we building these things in America? Because if you, from an individual standpoint, if you have one of these in your pocket, I'm assuming that many of you do. So, say you get on ChatGPT, you look something up, you screen clip it, you post it to your friends on Facebook, you do a Google search, maybe you stream on Netflix to watch a video ... you are using a data center every time you do that. We all use multiple data centers every single day.

“This is the next great infrastructure build-out in America's long history. And this is what's undertaken right now, like the railroads before it, the highway system, the power grid, the internet. This is the next thing that we are doing. I think it's important that every time that there is a large infrastructure build-out, it has presented a boon for me. This to me is one of the greatest opportunities to re-industrialize America in my lifetime. And I think that that's something that proactive communities should look at, something that we're looking at here in Northwest Ohio with RGP. We think there's a real opportunity there.

“From a bigger standpoint, these data centers we're talking about, we have two different types of data centers that I really work on. There are cloud data centers. which are the ones where you have your Netflix videos, stable workloads.

“Then there's AI data centers. This is something new. These are the factories of the information age, and they provide computing infrastructure, not just the businesses, which are going to be important for making sure that individuals and business and entrepreneurs have tools they need to be successful going forward in the future, but it can impact so much more.

“One example I think that people don't think a lot about is in national security. Just like in the 20th century, we had to rely on having sufficient industrial capacity to defend ourselves. In the future, we're going to need that, and computing capacity, in order to defend ourselves in the future and make decisions faster.

“If you think about a war fighter who might have to be in an engagement in the future, they're going to be on the front line. There's going to be data feeding into that, which will likely route back through satellites to a data center here in the United States ... could be right here in Ohio, to do the calculations, to get them information in real time. What I always think about to keep me motivated in what I'm doing, when I think about that soldier in the future, is on the front line, they're getting information and trying to make that decision, and their adversary makes that decision faster than they do because we failed to build the infrastructure here today. This is a critical thing. Everything that I and my cohorts in the data center universe are working on, I believe, is fundamentally important to the future of this republic. And I think that every project we do is important in that regard.

“That said, I want to make sure clear that there is a right way to do data centers. And to understand what that right way is, I think it's important to break down the different components of a data center. I like to think of it in three buckets. That a data center is essentially power, cooling, and compute.

“Compute, we've already discussed, that's the servers, that's the server racks inside of the data halls, and they burn hot. You need to have cooling in place. Traditionally, that was done with systems that were called open loop. I call them open tap because it's just like leaving the tap open. They’re just guzzling enormous amounts of water. That was a big challenge we were having in Loudoun County.

“The industry has come a long way in the last decade, particularly in the last couple of years in which we've moved towards closed loop cooling systems. What is closed loop? You’ve probably heard a little bit about this. Essentially you have water through a pipe that goes right to the server. They're now getting direct to the chip itself for cooling, and there's a water and a coolant mix, and that is used to transfer the heat instead of going through the air as traditionally.

“Traditionally, a data center had big chillers on top. They were doing evaporative chilling. Things were dripping, causing a bunch of noise. For the things that have a noise impact outside of the data center, the evaporative cooling and chiller are one of them. The other one is the jets, like the diesel generators. Those are the two big problems when we talk about noise. I'm sure we'll talk about noise a little more tonight.

“Focusing back on cooling, what closed-loop cooling does is when it transfers it to water, water is important because water is 800 times denser than air. Air can only hold so much heat. Water can hold a whole lot more. So you transfer that heat onto the water, it goes up to a different section in the data center, and fans are blowing on it to cool it before it returns and recycles in the loop. When I'm talking about cold water, cold water for a server in this regard, it's 90 degrees to give everybody an idea.

“The water stays inside the loop once it's topped off. So there's an initial top off, it's like filling a swimming pool. And then after that, it stays in the loop. I think there's about a five percent evaporation over the course of a year. You have to top it off, but then you continue it. But it stays in the loop. This cuts down on mechanical costs.

“It's a little more expensive upfront, but it's the right thing to do because we use substantially less water. The industry is now achieving, and you can look this up on Google, data centers, closed loop, you can use this term ‘WUE, water usage efficiency,’ those rates are now approaching zero. Phenomenal achievement now that we're projecting 20,000, 30,000 gallons a day on this project versus others in the past, the old water guzzlers using the open tap system, using hundreds of thousands of (gallons). I mean, that was not sustainable. The industry cares about their impact. They've invested a lot in this to be good stewards of this resource of water.

“Now we focus on power. Power goes into the cooling and the compute predominantly. One of the biggest concerns that folks have right now is that power rates are going up. I want everyone to understand that data centers are only one part of what's going on. There's a whole series of megatrends that are just hitting at this point. Data center demand is tremendous. That is occurring. One thing to fundamentally understand about what happens to ratepayers is that it's not the load itself that's driving rates up. It is the need to build up the transmission infrastructure to support that load. Transmission towers, substations, you have to buy large power transformers, breakers, all of this equipment. The reason that's important is because it plays into why the right way to do power with data centers is to put it near the transmission infrastructure that's existing. That's what this project does.

“We like this site and we look for this because it's right next to a major artery. There's a lot of power that runs through there. If you have a data center and you put it a half mile away, we have to run the transmission lines, which ours is about that or less, and you have another one that you want in the middle of the field about five miles away. Well, you have about 10 times as much cost on that latter one that you put out in the middle of the field. All of that gets built back into the rate pair, particularly when you're stretching it away from the core infrastructure.

“The right way to do data centers is to siphon your power infrastructure to keep down those transmission costs. By the way, this is true of non-data centers as well, so if we think about another megatrend that's been happening in our life, like in our recent lifetimes, is the push towards renewables. We're shutting down coal plants and other forms of generation. We're trying to add renewables to it. But renewables, by their very nature, because they take up so much land, you have to put them far away. And what that requires is a lot of transmission infrastructure.

“While we think about, particularly the subsidized cost for solar panels and wind turbines as being affordable from a generation standpoint, one of the more cheaper forms to build, the transmission infrastructure is greater because you have to put it out further. Let’s give an example. If I were looking at a 500-megawatt project. If I were to power that entirely with solar panels, well, the rule of thumb that I've consistently heard from industry is that you need about 10 acres of solar panels to support a megawatt power. So that's 5,000 acres. That would be covering a quarter of the city of Oregon in solar panels. I don't think that's being a good steward of the land. I don’t think that’s feasible or sustainable, so we look at some other ways to handle that.

“Another megatrend happening with power is the mass electrification in society. So, if you move towards electric vehicles, we're electrifying buildings. People are now mandating that you can't use gas to heat. It's being all thrown on the grid. This is extra load that's being put on the grid, requiring new transmission infrastructure.

“The biggest megatrend, the one that gives me the biggest worry is a cold hard fact that we all need to face — our power grid is old, it is in need of updating. The transformers, the poles, everything in it. I like to use this one data point. I really think it strikes home. The intended use life of a large power transformer is 40 years. Does anybody know what the average age of a large power transformer is in the United States? It is also 40 years. And that's not good.

“Regardless of the data center demand, we are now going to be facing increases in rates because of all these other things that are happening. Of course, data centers are a big component of that. We can try to alleviate that impact through proper siting, and data centers take on some of the costs with their infrastructure bills that serve their project. The other way to do it is onsite generation, which I can talk about a little bit more as well. As you think about the grid, that is ultimately, that whole story led us to Ohio. That's why I'm specifically here with you tonight and why I looked at this site originally.

“Several years ago, we were doing an edge requirement. An edge is like a small data center. And by small, I mean like 20 megawatts, which is still a substantial amount of power compared to other uses. We were looking all over the country, Sacramento, El Paso, lots of different places. We started hearing from the utility supply chain issues. Covid had some of this impact, but they were having trouble upgrading the grid.

“We had already seen this in Virginia, because a lot of it driven by data center demand in Northern Virginia. Dominion was having some issues there, where they were actually having to slow down on providing power to data centers because they wanted to protect the grid, protect the infirm load that went to residential houses, hospitals, and everything like that.

“We identified this as an emerging problem, and we got ahead and said, 'Look, on-site generation is going to be the right way to do this in the future.' And we assessed all kinds of power — solar, wind, we looked at hydrogen, which I think is a little too early. We looked at nuclear, we looked at everything. I'm happy to chat a little more about that.

“The summary was that natural gas was the only power that was going to help us keep up with AI this decade, so we sought to go find pockets of available natural gas capacity. That's what led us to Northwest Ohio. You have a substantial amount of natural gas energy here to support these large workloads. A lot of countries do not. A lot of America cannot support the build-out of this computing infrastructure that will be so important to us in the future.

“We came here. We found this site. I had the opportunity to reach out, connected to RGP, and we talked about the site, looked at it, and I said, 'That is a great site.' It was a great site because it had existing zoning, except for the southeast corner where the houses that were under option were. It was already zoned for everything we wanted to do — on-site generation, data centers, it was all right. That's one of the things that makes creating a data center site easier for us.

“The other thing it had going for it, of course, was the energy. There was the project that was there preceding us, which was Blue Innovation, I think was the code name for it. As I understand, that was a chemical plant for electric vehicle batteries. It wasn't actually making the batteries. It was making chemicals for it. That was the alternative that was being considered at the time that I first found this site. I told RGP that if there's an opportunity on that site, I want that opportunity. It has great geometry.

“For all the sort of data centers that I lay out on site, the geometry worked great. It was near perfect. When that opportunity came up, when Blue Innovation paused, we jumped on the site. In September of 2024, we first met. We put together a deal. It’s a public site. It's a public process. We negotiated the contract. We started our effort on learning about the power, doing the load studies on the power at that time in September.

“And then in November, we had a public meeting. A public vote, city council vote. We received unanimous approval for the contract 7-0. We were able to address questions there. Many of you probably remember this because it was in the paper, it was on Channel 11 news that night. It was a very open dialogue, and I really appreciate that because I don't think my industry does a good enough job reaching out to communities and talking to folks and being open and transparent about what we're doing. I really appreciated that about how this process has been run.

“We proceeded to at that point do our due diligence, studied it. I was always upfront, that was critical. We're going to study the gas. We're going to study the power. We're still studying the power. It's the longest pole in the tent. Something called a detailed load study that we undertook over the course of this process. We're still working with First Energy on that. It's taking a little bit longer than we thought, and that's kind of the main thing hanging over the project because so many other deadlines will kind of stem off of that.

“I was hoping to have that detailed load study because it is the one, as I said, hanging over the project. There's still a ways to go in this. When we get the detailed load study, I think of it as the beginning of the end. We'll be in the final stretch. There's a number of things that are still for public review, the economic development agreement that's being negotiated as well.”

For residents interested in listening to or watching the whole forum, you can view it below via the “City of Oregon, Ohio” YouTube page.