Data Center Wants Subsidies of $6.4 Million per Job
The developers of the STAMP industrial park in Genesee County are dangling one of the biggest subsidy packages in state history in an effort to land a data center as a tenant.
The industrial development agency for Genesee County has proposed $801 million in sales and mortgage tax breaks for Stream Data Centers in exchange for the creation of 125 jobs.
That works out to $6.4 million per job.
By contrast, the $959 million in state funding for Tesla’s plant in South Buffalo worked out to $586,000 per job. The $6.6 billion in subsidies granted to Micron’s planned chip-fab in Syracuse amount to $736,000 per job.
Other comparables include the subsidies the Genesee County IDA — called the Genesee County Economic Development Center — awarded to Plug Power in 2021. Those amounted to $4 million per job, though that project is all but dead. Tax breaks awarded to a data center in Lockport totaled $2.4 million per job.
The subsidies for Stream Data likely won’t end with sales tax abatements, as the company is expected to seek discounted hydropower from the New York Power Authority.
Stream Data — a speciality developer that constructs data centers for Fortune 100 companies like Apple and AT&T — has proposed building an $11.2 billion, 130-acre server farm at STAMP. It’s the company’s second attempt at the Western New York site after it nixed a smaller project last year.
According to information compiled by the subsidy watchdog group Good Jobs First, Stream Data’s proposed subsidy package ranks among the largest ever for a data center in the United States. Of the data center subsidies Good Jobs First has tracked, only three are larger than those proposed for Stream Data: two for Amazon, each worth $1 billion or more, and one for Apple, valued at nearly $900 million.
The Stream Data proposal ranks in the top 10 among the largest subsidy packages ever granted in New York.
Pat Garofolo, director of state and local policy at the American Economic Liberties Project, said such massive subsidies for data centers aren’t necessary. He likened them to tax breaks for an Amazon warehouse: The company needs the structure to operate its business, meaning it would get built with or without a subsidy.
“It’s the same thing here. They’re going to build data centers. They need data centers,” he said. “You are subsidizing the necessary business infrastructure and getting nothing out of it.”
The proposed subsidy package for Stream Data breaks down like so:
- Sales tax exemptions (state and local) worth $769 million.
- Mortgage recording tax exemptions (state and local) worth $31 million.
The sales tax exemption means the state would lose out on $385 million. Another $385 million would otherwise flow to Genesee County and its 21 municipalities. Sales tax exemptions generally expire after initial construction of a project is completed.
County Treasurer Kevin Andrews explained that the City of Batavia gets 14 percent of all sales tax collected while the 20 towns and villages split $10 million annually. School districts in Genesee County receive no sales tax revenue.
Without the subsidies:
- Genesee County would receive $321 million.
- The City of Batavia would receive nearly $54 million.
- The 20 towns and villages would still split the remaining $10 million.
As of NYPA’s Tuesday board meeting, Stream Data had not submitted an application for low-cost power. Once the agency rescinds its hydropower award to Plug Power, NYPA will have about 170 megawatts of power available to Western New York businesses, a spokesperson said.
Hydropower awards, the spokesperson noted, are based on a company’s capital investment and the number of jobs it creates. Plug Power, for example, received 60 megawatts for an investment of $387 million and 68 jobs.
In a December filing with the IDA, Stream Data stated its data center would need 500 megawatts of electricity, the majority of the 600 megawatts available at STAMP.
The Stream Data project includes a 30-year payments-in-lieu-of-taxes agreement (PILOT), too, meaning it would result in no reduction to county, municipal or school property tax revenues. Instead, Stream Data would make annual payments equal to its property tax levy, plus more, depending on the year.
Stream Data, for example, would owe an average of $8.6 million in property taxes each year. It would pay that amount, plus more, to schools and municipalities annually. Over 30 years, its PILOT payments will average $9.5 million annually.
Stream Data would also pay an estimated $18 million in sales tax annually on its electricity usage over 30 years, according to documents released by the IDA.
The subsidy package additionally includes $429 million in “other local municipal revenue,” but that figure represents money that would not necessarily flow to government coffers.
It includes, for example:
- Stream Data’s purchase of land at STAMP.
- Its $50 million commitment to build out the electric substation at STAMP.
- A fee, akin to a commission, paid to the IDA valued between $84 million and $140 million.
- Local sales taxes on electricity.
The “other local municipal revenue” total also includes fees paid for fire service and “incentive zoning revenues” to the Town of Alabama, though amounts of those payments were not immediately available. Earl Wells III, a spokesperson for the IDA, did not provide a further breakdown of those benefits when asked Tuesday.
In a statement, Mark Masse, president and CEO of the IDA, said the agency would require Stream Data to pay $825 million in property and sales taxes to municipalities in order to “access” the $800 million in sales and mortgage recording tax breaks.
As Investigative Post reported in 2024, the IDA has turned to data centers to “save the day” at the struggling industrial park, viewing those projects as able to both fill space and pay to complete the electric substation — infrastructure needed to attract additional tenants.
As it did a year ago, Stream Data’s subsidy package is likely to face pushback from residents. The Tonawanda Seneca Nation, whose territory abuts STAMP, has already voiced its opposition to the project. Nation members worry development at the industrial park — including 24/7 noise from the proposed data center — would harm their ability to hunt deer and other wildlife in the Big Woods.
A public hearing on the project will be scheduled after the IDA’s next meeting on Thursday.
Christian Yunker, chairman of the Genesee County Legislature, said he’s not concerned about the subsidy package. If approved, the county would miss out on some $385 million in sales tax — nearly double its annual budget.
Instead, Yunker said he sees “the big picture of the project.”
“The alternative to a package proposed by [the IDA] is no project, no jobs, no new revenue,” Yunker told Investigative Post. “Another community will offer these benefits and the project will move somewhere else. Whether we like it or not, data centers are going to be built throughout the state as they are necessary for technology infrastructure that we all utilize in today’s society.”
That’s a sentiment Garofalo took issue with: Tech companies need massive data centers, he said, so “they will find a way to make it work.”
“The Buffalo Bills leaving Buffalo is a real harm, you know? Missing out on a manufacturing plant could be a real harm,” he said. “If you don’t get a data center, who gives a [crap]?”
He also noted that data centers can’t be built just anywhere. They need large parcels of seismically stable land near strong electric grids, highways and water. STAMP fits the bill on all counts. Additionally, the IDA has access to millions in state funding to complete needed infrastructure at the industrial park.
In other parts of the country, Garofalo said, data center builders are becoming more focused on covering their costs as opposed to extracting tax subsidies. Microsoft, for example, announced last month it would pay for its own electricity infrastructure and would not accept local property taxes.
Leaders in New York, Garofalo said, ask, “What can we do to get this thing in here?”
“Whereas in a lot of places, the debate is, ‘These guys owe us a lot because they don’t actually give us very much.’”
Among the benefits of a data center touted by the IDA is the creation of thousands of temporary construction jobs — as many as 21,000.
Kasia Tarczynska, senior research analyst at Good Jobs First, said she had serious doubts about that number, calling it “so ridiculous I don’t know what to say.”
“They’re justifying giving away all this tax revenue,” she said, for “an imaginary number.”
Masse, in a statement, said the figure was “based upon the capital investment for the project” and had been “generated by an independent modeling program.” He noted that it may be revised before any subsidy package is approved.
Stream Data’s need for 500 megawatts of electricity has raised additional concerns.
That amount of electricity could power some 400,000 homes, nearly enough for every household in Erie County. Experts previously told Investigative Post such a large draw on the power grid could cause prices to rise for everyday consumers.
In the event that power isn’t available from the grid, Stream Data would employ a dozen diesel generators to supply its electricity.
That prospect, plus potential noise, caused the neighboring Tonawanda Seneca Nation in recent months to lobby the state Department of Environmental Conservation to head up the environmental review for the project. Despite Commissioner Amanda Lefton telling Nation members she had concerns about a data center at STAMP, the agency declined to take the lead on the environmental review. Instead, the IDA will lead it.
In statements published on a website for the STAMP project, Stream Data has said its data center won’t use mass amounts of water or loud fans to cool the computer servers inside. That’s intended to cut down on noise concerns. Instead, the company “selects cooling equipment, enclosures, and acoustic screens to prevent sound from exceeding the regulated levels.”The Nation, along with the Sierra Club, sued the IDA and Stream Data for failing to complete a proper environmental review of the company’s first data center proposal. The company and IDA canceled the project before a judge could rule on the lawsuit, but vowed to return with a new proposal.