Massachusetts Establishes Statewide Rules for Data Center Development
Massachusetts Governor Maura Healey has issued an executive order establishing statewide rules for data centers, requiring large facilities to meet a responsible-development framework and submit community-benefits agreements for state permits. The policy aims to ensure data centers bear their own costs and benefit local communities, shifting the focus to municipalities defining their needs before developers propose projects. The article advocates for cities to create Municipal Capital Transformation Plans and thoroughly evaluate project value before offering incentives.
Massachusetts Governor Maura Healey has advanced a statewide strategy for data center development with a new executive order issued on September 8. The order mandates that data centers with peak electricity demand exceeding 25 megawatts must adhere to the administration's responsible-development framework and provide a community-benefits agreement, developed with key stakeholders, to receive necessary state permits. This move, following previous proposals by author Ed Gaskin for data centers to internalize their costs and contribute to a Green Zone Investment Fund, emphasizes establishing rules before development commences.
The new state standards aim to set a baseline, empowering local municipalities to determine their specific infrastructure priorities, incentives, and benefits. The article stresses that cities should develop a "Municipal Capital Transformation Plan"—a list of their essential projects over 10 to 20 years—before engaging with developers. This approach ensures that any data center development aligns with pre-existing community needs rather than dictating them. It also highlights the importance of accurately assessing a project's full value and cumulative costs of incentives (like TIFs or PILOT reductions) before offering tax breaks, ensuring transparency for taxpayers.
Furthermore, the piece differentiates between a company's cost of doing business and genuine community benefits. Expenses for necessary infrastructure like substations, roads, or water lines should be borne by the developer, not shifted to taxpayers or repackaged as community contributions. The article advocates for host cities to retain 100% of property taxes, PILOT payments, infrastructure reimbursements, and negotiated community benefits. It also calls for long-term commitments from developers regarding environmental monitoring, public safety, workforce development, and local business participation, with clear accountability measures that survive project sales or expansions. Residents, the author argues, deserve ongoing oversight to verify that promised jobs and contributions materialize.
Ultimately, the executive order is seen as a crucial step in strengthening municipalities' negotiating positions. Communities are encouraged to identify their implementation-ready projects now, leveraging potential future investments from data center contributions to address long-delayed needs in areas with high energy burdens and environmental harm.