How New York's data center framework, post-moratorium, could impact development
New York is debating a new regulatory framework for data center development following a one-year moratorium. State Senator Kristen Gonzalez is advocating for an omnibus bill to strengthen regulations, mandate public engagement, and address energy grid strain and environmental concerns. The discussion includes challenges for developers in providing their own power and the need for property tax mitigation.
New York is actively debating its approach to data center development following the expiration of a one-year moratorium. The conversation, which includes voices from government and environmental law, centers on establishing a new framework of parameters for municipalities to apply to data center proposals.
State Senator Kristen Gonzalez (D-Queens) is pushing for an omnibus legislative package to go beyond the Governor's executive order. Her bill would require data center projects to engage with communities 90 days prior to development, present on environmental and public health impacts, invest in community benefits, and adhere to strict labor standards, including prevailing wages and union labor. Senator Gonzalez emphasized the need to address the state's strained energy grid, citing concerns about pollution, rising utility costs, and potential rolling blackouts, especially given that queued data center projects could demand a third of New York State's current energy usage.
David Flynn, leader of Phillips Lytle’s Environmental Law Practice Team, highlighted the challenges developers face in providing their own on-site energy, particularly in a state that has historically not embraced natural gas generation. He also pointed out the issue of astronomical property tax valuations for data centers, which would necessitate mitigation strategies for projects to remain feasible. The discussion also noted that Empire AI, a public-private consortium, is exempt from the moratorium and continues its work within the state.