New York State Enacts One-Year Data Center Moratorium
New York legislators have passed a one-year moratorium on data centers, driven by concerns over high power and water consumption and rising electricity bills. This has created a challenging regulatory environment for developers, though some towns are still actively seeking data center investments for tax revenues. Companies like Youngwoo & Associates are adapting by focusing on other states and navigating the evolving landscape.
The "Daily Dirt" column from The Real Deal reports on the current "drama" surrounding data center development, highlighting the shift in strategy for companies like Youngwoo & Associates, which now focuses solely on data centers due to the AI boom. Youngwoo CEO Margarette Lee noted the controversy and "rush" involved in the sector.
New York legislators recently passed a one-year moratorium on data centers, influenced by public concerns over their high power and water consumption, which some blame for rising electricity bills. Britt Winterer, Chief Development Officer at Link Logistics, countered claims about water usage, stating modern data centers use closed-loop systems. He also mentioned technological advancements reducing the land footprint required for large projects.
Despite widespread opposition and moratoriums "in the works in every state," some towns are actively trying to attract data centers for their substantial property tax revenues. Youngwoo & Associates has secured land in Alabama, but market saturation is driving up prices. The article suggests New York Governor Kathy Hochul will likely sign the moratorium bill as part of her affordability agenda, impacting deals in New York but potentially increasing the value of existing data centers in nearby states like New Jersey. Industry figures like L&M Development Partners chair Ron Moelis also criticized the "insane" regulatory process hindering development.