Groton — A proposed data center agreement for land south of Interstate 95 between Hazelnut Hill and Flanders roads, which has met with opposition and questions, will go to the public on Thursday.
NE Edge LLC, under the direction of Thomas Quinn, seeks a data center host municipality fee agreement with the city, which is the first step in the data center development process.
Under the agreement, NE Edge is seeking to develop one or more data centers on contiguous properties, which are south of I-95 and north of Groton Open Space Association’s Sheep Farm and Sheep Farm South properties. The properties listed in the agreement include approximately 56 acres at 327 Hazelnut Hill Road, approximately 92 acres at 351 Flanders Road and approximately 1 acre at 449 Hazelnut Hill Road, as well as several properties with the address 0 Flanders Road which in total include approximately 19 acres.
A host municipality fee agreement sets the terms for potentially allowing data centers “on particular properties under certain conditions and sets the revenue that would be provided to the city, since the state has exempted data centers from tax,” City Manager John Burt said. “These agreements are needed before anything can be built.”
Any proposed construction project would then have to go through all standard requirements, including planning and zoning and inland wetland commissions, Burt said.
The General Assembly last year passed a law providing tax incentives for data centers, defined as facilities to house computer servers “to centralize the storage, management and dissemination of data and information relating to a business or to a particular classification or body of knowledge”. To be eligible, the developer must make an investment of at least $200 million, or an investment of $50 million if the data center is located in a business or opportunity area.
Quinn said in a Feb. 8 meeting that his team was instrumental in getting data center legislation passed in Hartford.
The law provides tax exemptions for periods of 20 or 30 years “depending on the size and location of the data center investment” and requires state approvals and company signature. a fee agreement from the host municipality before the center facility can be built, according to a municipal document.
Burt said the city is considering the deal because having a data center can help boost ancillary businesses and hopefully continue to put the city on the radar as a tech hub, which has started with the city’s blue tech economy. He also said the proposed agreement allows the city council to impose conditions on properties in the industrial zone, while other industrial uses do not offer the same opportunity.
But before any decisions are made, he said, the city council wants to hear from voters.
“I’ve done extensive research on the project and I think overall it’s great for Groton,” said city mayor Juan Melendez Jr., who is one of nine members of the municipal Council. “However, we are making sure to address community concerns before council votes on approving the deal. On the 24th, we have a presentation from the developer and we encourage residents to come and give us their input.”
City council was due to conduct its first review of the proposed host municipality fee agreement at its committee of the whole meeting on Tuesday. The board had not yet begun its review by the print deadline and was discussing other issues on the agenda.
Burt said the board should continue to discuss the deal at its March 1 meeting and digest information from the public meeting; there will also be an opportunity for the public to comment at the March 1 meeting.
He said the council could vote on March 8, but is taking it step by step and will see where to go from its discussions on March 1.
Groton Conservation Advocates co-chairs Elizabeth Raisbeck and Eugenia Villagra wrote a letter to city council raising questions and concerns about the proposal, including calling for an annual economic analysis and environmental impact study to assess the potential impact of the data center on waterways and wetlands and the impact of noise and air pollution.
They asked that the council postpone a vote until the city has more information about the project, its leader and site-specific plans. They said the proposal would have to go through planning and zoning and inland wetlands first, and if permits are received, then to city council.
Melendez said the board is still gathering information and feedback and expects to learn a lot during this week’s presentation. “After that we will be in a better position to assess how to move forward,” he said.
Asked at the City Council’s Committee of the Whole meeting on February 8 about the environmental concerns people have raised, Quinn said it would be a power plant with efficient cooling and efficient backup diesel generators. Burt said language relating to environmental protection and noise has been added to the proposed agreement.
Burt said the water resources district touches the corner of the land, but not where the development would be, although no specific plans have yet been filed.
The agreement calls for NE Edge to donate at least 50 acres of the properties to the city, “with at least one driveway to and from Hazelnut Hill Road. A portion of the donated land will directly abut the conservation land south” of the Properties.
The developer plans to pursue the purchase of a 17-acre city-owned parcel along Flanders Road, east of 351 Flanders Road, although this is not considered part of the deal, said said Burt.
Burt said details, such as number of data centers, size, specific location on properties and value, are not yet available.
At the February 8 meeting, Quinn said that NE Edge would bring a build entity and an operations entity for the data center, but NE Edge would remain as a joint venture partner throughout the project.
The Groton Conservation Commission and the Groton Economic Development Commission will host the public presentation of the proposed agreement, followed by a question or comment period, at 5:30 p.m. Thursday at the Thrive 55+ Active Living Center, formerly known as the Groton Senior Center, at 102 Newtown Road. People can also view the meeting via Zoom, with a link available on the city’s website or on Groton City Television.
Other projects in the region
Burt said the proposed deal for properties south of I-95 is similar to a data center host municipality fee agreement with Gotspace Data Partners LLC the city approved last year for properties. properties off Route 117. Quinn was a former Gotspace partner, according to the city. .
At the Feb. 8 meeting, Quinn told the board that an investor “committed to fund, partially funded, defaulted, and when we called default, attempted a hostile takeover.” He said it took a while to “recover”.
“We recovered,” he said. “We have our whole team with us.”
When asked to comment on Tuesday, Gotspace Data Partners COO Mike Grella, who spent seven years at Amazon, said in an emailed statement that “Gotspace Data Partners is on the well on its way to becoming one of Connecticut’s leading data center/high-tech corridor developers.
He added that “Gotspace was ahead of the market seeing the potential for big data in Connecticut before the state enacted one of the most aggressive tax incentive programs in the nation and is well positioned to seize momentum created by the proliferation of 5G, Internet of Things, streaming, AI and cloud computing. The partners and customers we speak with every day share our enthusiasm and are aligned with the company’s strategy to develop a data infrastructure throughout Connecticut.”
“I fully support Gotspace’s ownership and management team and the steps taken to safeguard the company’s business interests,” Grella said.
In 2019, Quinn was quoted by The Day as CEO of Verde Group LLC in an article about the company’s plans for a data center campus in Montville.
Joel Greene, the company’s founder, who died last summer, and Verde Group have been embroiled in litigation over the proposed data center, The Day reported.
A lawsuit, filed in June 2020 by Vineyard Meadows Investment and Bruno Blanchet and scheduled for trial in July, against Greene, Verde JG LLC and Verde Group LLC, accuses the defendants of breach of fiduciary duty, breach of contract, of dereliction of duty of good faith and trafficking, and unjust enrichment, among other counts. Blanchet was working on the data center project, the lawsuit said.
There was also litigation filed in September 2020 by All of Us at North LLC against Mohegan Hill Montville LLC, Kleeman Farms, LLC, Verde Group LLC and Joel and Donna Greene, according to court documents.
Quinn, who has not been named in the litigation, could not immediately be reached for comment.
Burt said the city had done a background check and due diligence on Quinn and found no issues, but would continue to investigate.