Joint Planning Commission and City Council Work Session

AGENDA Special Work Session Meeting 4:00 PM - Tuesday, June 4, 2024 Farmington City Hall, Council Chambers Page 1. CALL TO ORDER 2. APPROVE AGENDA 3. DISCUSSION ITEMS Introduction - Tract, Data Center Development Team 2 - 40 No action requested. This is for informational purposes only. Agenda Item: Introduction - Tract, Data Center Development Team - Pdf 4. CITY COUNCIL COMMITTEE UPDATE 5. CITY ADMINISTRATOR UPDATE 6. ADJOURN Page 1 of 40  SPECIAL WORK SESSION AGENDA MEMO To: Mayor, Councilmembers and City Administrator From: Deanna Kuennen, Community Dev Director Department: Community Development Subject: Introduction - Tract, Data Center Development Team Meeting: Joint Planning Commission and City Council Work Session - Jun 04 2024 INTRODUCTION: A recent rezoning application has generated interest and questions about a proposed development on the south side of Farmington. The developers, Tract, is a data center and land acquisition company specializing in master planned data center and technology parks. The Tract team will attend the meeting to introduce their company, their planned approach to data center development, and address concerns expressed at the recent Planning Commission public hearing. DISCUSSION: Following the Planning Commission public hearing held on May 14th, Staff and the Tract team recognized it would be beneficial for the Planning Commision and City Council to have the opportunity to discuss the proposed development planned in Farmington. The purpose of this meeting is to provide information about Tract, why this site in Farmington, and address concerns that have been expressed. The intent is to provide factual information and answer questions that the City Council and Planning Commission have regarding the proposed development and identify a process moving forward that includes public access to more detailed site development information and provides more opportunities to engage with the development team. The topics that will be addressed include: 1. Introduction of the Tract Team 2. Data Center Overview 3. Why Farmington 4. Infrastructure Needs 5. Noise and Traffic 6. Job Creation 7. Economic and Community Benefits 8. Sustainability 9. Next Steps This is not a public hearing - but rather an information session to address questions raised by Planning Commission and City Council. Staff will also be available to provide information on City processes, public infrastructure, and overall development opportunities. BUDGET IMPACT: Page 2 of 40 Not applicable ACTION REQUESTED: No action requested. This is for informational purposes only. ATTACHMENTS: 240604 Joint Worksession Presentation Page 3 of 40  Farmington, MN Joint Work Session with Planning Commission & City Council June 4, 2024 Page 4 of 40  Who We Are What We Do Tract is the trusted partner for planning Tract Business Model: Acquire raw land, create shovel- responsible technology infrastructure. ready data center sites via, zoning, horizontal investment and infrastructure positioning We create opportunities that bring economic development to communities We are reliant upon positive and cooperative relationships within the communities where we work. We are committed to developing these relationships and accountable to maintaining them for the long term. Access to Capital: We are well positioned to make capital commitments to our project sites and the communities where we develop. Value Proposition (Communities): Thoughtful Master Planned approach Page 5 of 40 Blenheim Project – Hanover County, VA Value Proposition (End User): Speed and Certainty  Leadership Heidi Grant van Rooyen Graham Williams Diemar Todd Stockard Chief Executive Officer Chief Investment Officer Chief Business Officer Chief Financial Officer L5 Be Well Matt Jeff Jessica Bennett Spencer Cox Nat Sahlstrom Chief Legal Officer Chief Technical Officer Chief Innovation Officer Chief Energy Officer Page 6 of 40 3  Community Impact When part of a thoughtful land use plan, data centers are good neighbors. 01 02 03 04 Proper Planning Good Neighbors Community Partner Stewardship When cities master New data center builds with Positive Major data center plan growth, data are aesthestically pleasing, and generate minimal Economic Benefits operators have among the most aggressive climate centers, along with other critical traffic, noise, or light targets globally. Data center companies are infrastructure (i.e., pollution. actively engaged in the local airports), are best community, investing millions located away from in education, parks, and residential centers. critical infrastructure. Net Zero by 2030 Page 7 of 40 7  Farmington Tract Team Local Consultant Team Alan Catchpool, PE Ashley Payne Page 8 of 40 5  What We Do Site Power Construction Entitlements Acquisition Procurement Development  Deep experience  Advance generation and  Master plan and  Site grading and architecting / siting transmission planning appropriate zoning preparation networks and data approvals are achieved center platforms  Contract transmission through partnership with  Power, fiber, water upgrades and substation local jurisdiction extensions where  Long-term orientation builds  Development needed and focus to masterplan agreements and other scale and efficiency  Exclusive renewable  Public and private access necessary approvals are energy PPAs and behind- and easement master- finalized that set the  Secure water rights and the-meter solutions planning course for continued infrastructure development of the site. Page 9 of 40 6  What We Have Accomplished Active Markets  Currently in over 10 markets across the US Entitlements  Successful approvals in multiple jurisdictions Construction Development  Breaking ground on Page 10 of 40 multiple projects  Why We’re in Farmington, MN Power Site Connectivity Local Economy - Emerging data - Existing 345kV on - Adequate Site - Important Site center market in property Access that fits Minnesota - Positive - Availability of architecturally - Excited to bring relationship with water into overall data economic GRE and Dakota - Positive network benefits to Energy environmental Farmington qualities Page 11 of 40  Why are we Here Tonight  Following City’s Rezoning Process  Heard concerns and questions expressed at the May 14 PC Hearing  Re-assessed process with Staff  PUD process allows us to present more information up front and have more robust engagement with the community Page 12 of 40 7  Farmington Site Location  Two Sites (348 ac):  Fountain Valley Golf Club & Farmington Public Schools  Total Developable Area: 205 ac (59%)  Access from 220th / MN 50, 225th St. & Biscayne Ave.  Existing power line south of the site Page 13 of 40 7  Processes Rezoning + PUD Overlay Preliminary and Final Plat Alternative Urban Areawide Review (AUAR) • Development Standards • Establishes lot boundaries • Environmental review process • Building Setbacks • Location and types of streets • Fish, wildlife, and ecologically sensitive • Height • Location and size of sewer lines resources • Parking and water mains • Physical impacts on water resources Tract • Landscaping • ROW dedication • Water Use • Development Areas • Easements • Water Quality-Wastewater • General Access locations • Traffic • Impact on infrastructure and public services • General Utility Layout • Erosion and sedimentation • Street Standards • Geologic hazards and soil conditions • Identification of • Traffic Environmental Features • Archeological, historic, and architectural resources. • Mitigation Plans Page 14 of 40 11  What we have heard  Concerns & Questions about:  Location  Noise  Traffic  Water use Tract  Power  Tax Generation  Sustainability  Alternative uses  Broader community benefits  Need more information Page 15 of 40 12  Power  Site is ideally suited with the 345kV line + planned infrastructure upgrades. Tract  Tract is engaged with Great River Energy & Dakota Electric Association (“Utilities”)  Proceeding with Service Application and engineering studies to interconnect to the grid.  Site is located at the eastern and southern edges of Farmington. Page 16 of 40 13  Traffic  Traffic Impact Study Completed April 2024 Average Daily Trips  At full build-out, campus will generate 273 Employees Tract  2,498 Average Daily Trips projected Road Improvements  MN 50 – Eastbound right and Westbound left turn lanes.  MN 3 & 225th St. – Northbound right and Southbound left turn lanes.  Optimize signal timing at adjacent intersections. Page 17 of 40 14  Water and Wastewater Water and Wastewater Use System Infrastructure Impact  Taking advantage of Minnesota’s  Capital Improvement Plan (CIP) to temperate climate, Tract is support Comp Plan Update assuming that future DC developers will utilize Direct Evaporative  Campus water and sewer Tract Cooling (DEC) capacity to be included in CIP  By using outside air that is pulled  DC industry is motivated to utilize through a water saturated medium, reclaimed water DEC is the most cost-efficient way to cool a DC while using minimal water Page 18 of 40 15  Noise  Noise is regulated by the Minnesota Pollution Control Agency (MPCA) Tract  Residential (NAC 1): 60 -65 dBA daytime / 50-55 dBA nighttime  Data Centers are categorized as NAC – 3  Noise from data centers cannot create noise that exceeds the dBA on adjacent residential property.  Noise Studies Page 19 of 40 16  On-Site Generators  Noise Attenuation  Generator Enclosures  Exhaust Mufflers/Bellows  Noise Deadening Material  Louvers  Air Permitting / Emissions  Strict emissions standards per the Clean Air Act must be met  All diesel generators require an EPA certified engine  Permit limitations on generator run time  EPA limits the following constituents as part of its emissions standards:  Non-methane hydrocarbons  Volatile Organic Compounds  Nitrogen Oxides (NOx)  Particulate Matter Page 20 of 40  Carbon Monoxide 17  Sustainability  Hyperscalers have Environmental, Social, & Governance (“ESG”) goals to meet based on corporate policies which encourage companies to act responsibly.  The data center industry is a major buyer of “Power Purchase Tract Agreements” for renewable energy.  2021: Amazon and Microsoft were the two largest corporate buyers of renewable energy in the world through PPA.  Meta : Operations for their DCs have already reached net zero emissions and are supported by 100% renewable energy  Google has a goal to run on 24/7 carbon-free energy on every grid where they operate by 2030. Tract: ESG policy / Collaboration Agreement with Silicon  Microsoft, Google & Meta have a goal to replenish more Ranch align advanced renewable projects with future Data Page 21 of 40 water than they consume by 2030. Center development in Nevada and Utah 18  Job Creation 1. Data Center Operations (277 permanent jobs): U.S Bureau of Labor Statistics Entry Level Education 2022 Median Annual Wage • Network Engineers Computer and information research Computer & Information scientists design innovative uses for new Masters Degree $137,000 • Computer Programmers Research Scientist and existing computing technology. • Computer Support Specialists Computer network architects design and • Database Administrators Computer Network implement data communication networks, including local area networks (LANs), wide Bachlor's Degree $127,000 • Computer Research Scientists Architects area networks (WANs), and intranets. • Security Computer programmers write, modify, and • HVAC test code and scripts that allow computer Computer Programmers Bachlor's Degree $97,800 software and applications to function 2. Construction Jobs: properly. Computer support specialists maintain • Electricians Computer Support computer networks and provide technical $59,660 • Mechanical Engineers Specialists help to computer users. • Utility Contractors Computer systems analysts study an • Plumbers Computer Systems Analysts organization’s current computer systems Bachlor's Degree $102,240 and design ways to improve efficiency. • Steel Workers • Grading Contractor Database administrators and architects Database Administrators & create or organize systems to store and Bachlor's Degree $112,120 Architiects secure data. 3. Indirect Jobs : “For every job inside a Virginia Information security analysts plan and data center, there are 3.5 additional jobs that carry out security measures to protect an Information Security Analysts Bachlor's Degree $112,000 organization’s computer networks and are supported in the rest of the Virginia systems. Page 22 of 40 economy, not counting construction jobs.”* Network and computer systems Network & Computer administrators install, configure, and Bachelor's Degree $91,000 Systems Administrators maintain organizations’ computer networks and systems. *The Impact of Data Centers on Virginia’s State and Local Economies 5th Biennial Report (April 2024)– Northern Virginia Technology Council 19  Positive Economic Impacts to City of Farmington Total 20 Year Estimated Tax Receipts $ 325,000,000 Real Property Tax Forecast for City of Farmington Average Annual Estimated $35M Tax Receipts $ 16,000,000 Max Annual Estimate Tax $30M Receipts $ 29,000,000 $25M $20M Examples for how funds can be allocated: $15M • Schools, • Emergency services & First Responders $10M • Increased salaries and benefits for $5M employees $0M • New parks & upgrades to existing parks • Upgrades to water and sewer infrastructure. Page 23 of 40 20  Community Benefits Hyperscalers are recognized as providing significant contributions towards communities beyond tax generation:  AWS: STEAM learning opportunities and pathways, partners with local educational organizations to connect the workforce with careers in data centers and technology  Meta: Community Action Grants, STEM contributions, small business trainings  Google: STEM grants, Skilled Trades and Readiness Program (STAR)  Microsoft: $1.9B given to nonprofit organizations last year  Tract • Storey County, NV: Exploring opportunities for community involvement such as sponsoring the County Middle and High School robotics team.  Henrico County, VA: $60M Housing Trust Fund created from data center taxes. Page 24 of 40  Louden County, VA: Reduced property taxes due to significant tax collection on data centers (2020 = $333M) Designed by Freepik: www.freepik.com 21  Smart Development, Without Disruptive Growth High Fiscal Impact Low Infrastructure Impact Traffic Impact  Expecting to grow to well over  Transmission lines adjacent to the  Low traffic impact $16M annually of property tax site on the south side. receipts over 20 years  Traffic for data center use at full  Water use will be less than build-out will be less than what  Creating ~277 high quality medium density residential on would be generated for permanent jobs over 20 years the site commercial development, low-  Variety of positions accessible density or high-density residential to Farmington residents  Partnering with City on area-wide development.  E.g. Electricians, HVAC techs, infrastructure improvements IT techs, engineers, security guards This project presents a unique mix of high fiscal impact and low infrastructure and Page 25 of 40 The Takeaway: public services impact. 22  Schedule Feb Feb March March April April May May 2024 June July June July Aug. Aug Sept. Oct. Sept Nov. Oct Dec. Today Application and Review Process Annexation of FPS Property City Council Hearing / Approval 4/15 Application & Review Process Planning Commission Public Hearing 5/14 Joint PC / CC Worksession + Initiate PUD Process 6/4 Prelim PUD Submittal TBD Rezoning Rezoning Community Meeting TBD Prelim PUD Planning Commission Hearing TBD Prelim PUD City Council Meeting TBD Final PUD Planning Commission Meeting TBD Final PUD City Council Meeting TBD Application & Review Process Prelim Plat Planning Commission Hearing TBD Preliminary & Final Plat Prelim Plat City Council Meeting TBD Final Plat Planning Commission Meeting TBD Final Plat City Council Meeting TBD Application & Review Process Page 26 of 40 AUAR & City Council Meeting to Adopt AUAR TBD Mitigation Plan Opportunity for Public Comment 23  Project Website • Launch Date: TBD • Project Information Tract • Project Updates • Timeline • FAQs • Contact Information Page 27 of 40 24 Thank you Page 28 of 40  26 Page 29 of 40  Potential Economic Benefits Data Centers are economic drivers. Tier 3: Job Creation  Each direct job associated with the project could see ~3 indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others.  Hundreds of additional construction jobs through the life of the project. Tier 2: Indirect Tax Impact  Taxes on sales / property with the data center supply chain  Income tax on construction workers, data center operations staff, and individuals in the supply chain Tier 1 Tax Generation  Taxes paid directly by data center operators on investment including real estate, personal property, business license, utility, and sales tax on equipment Page 30 of 40  Other Questions • Impact on property values • Impact on parkland • How is this different from other industrial development • Impact on livelihoods • Difference b/t private vs. commercial DCs. • What happens if DCs not built? PUD will control that. Page 31 of 40 28  On-Site Generators  Generators are used for back-up power  3MW generators are industry standard  Fuel Storage  Fuel is stored in individual “Belly-Tanks” which are double-walled and monitored for leaks  Generators are protected on site through use of bollards and other traffic deconflicting measures  Re-Fueling  Overfill Protection Valves  Fill port containment boxes  Spill Prevention, Control and Countermeasure (SPCC) plan must be in place at each facility  Generator Testing  Industry Standard: 30 min/month @ 30% load  Industry is moving towards: 10 min/month unloaded with annual 30 min test at full load. Page 32 of 40 29  On-Site Generators Fuel Fill Overflow Box Fuel Level Sensor and Overfill Cluster Prevention Valve Fuel Vents Engine Fluid (Coolant and Oil) Containment Primary Tank Leak Support Structure Alarm Switch (Typical) Typical Belly Tank Design Secondary Containment Structure (Monitored for leaks) Protected Fuel Storage Page 33 of 40 Typical Belly Tank Section 30  Why are data centers important? Data centers house critical infrastructure in our modern economy with customers across every industry and supply technologies we use everyday. FIRST RESPONDERS MEDICAL RECORDS ONLINE BANKING STREAMING SPORTS NEWS Page 34 of 40 PHONE USE / SOCIAL MEDIA SMALL BUSINESS REMOTE WORK February 2024 Hanover Public Hearing 31  Cooling Systems Indirect Evaporative Cooling (IDEC) • Fluid-cooler utilizes water evaporation to cool air flowing through an external dan-driven air-to-water heat exchanger to remove heat from the data center Tract and return chilled cooling to it. This is a “closed-loop” system that circulates cool air within and does not require potable water. • When outside air is cool enough, the fluid cooler will switch to dry mode, using no water at all. Direct Evaporative Cooling (IDEC) • Utilizes the direct evaporation of water to produce significant cooling and humidification with low energy consumption. Outside air is drawn through a wet medium. Water evaporates and delivers cool air Page 35 of 40 into the data center. Image by Freepik.com: <a href="https://www.freepik.com/free-ai-image/n-server-room-you-ll-notice-green-lights-signaling-energyefficient-operations_77714031.htm#fromView=search&page=1&position=1&uuid=83f3a093-c3b5-46c7-bc0a- 0edb9a919799">Image by rorozoa on Freepik</a> 32  Cooling Systems •Direct-to-chip cooling: Direct-to-chip cooling systems are among the most effective methods for cooling an entire server room because they cool the processors directly. This technique uses flexible tubes containing fluid that absorbs the heat Tract and carries it away from the equipment. •Evaporative cooling: Because evaporative cooling relies on the natural evaporation of water to cool an area, it is one of the most economical and environmentally friendly cooling processes. This method draws warm air across a wet filter or pad to absorb the heat, then redistributes the remaining cool air. Some evaporative cooling methods use water distributed from a misting system, which works well for data centers with humidity controls. Page 36 of 40 33  Water and Wastewater Water and Wastewater Use System Infrastructure Impact  Taking advantage of Minnesota’s  City is undertaking system-wide temperate climate, Tract is utility improvements and Estimated Yearly Water Usage on Site Tract assuming that future DC developers finalizing a Capital Improvement will utilize Direct Evaporative Plan (CIP) to support the 2040 High Density Residential Cooling (DEC) Comp Plan Update Development Type  By using outside air that is pulled  Campus water and wastewater Low Density Residential through a water saturated medium, usage will be included in CIP and DEC is the most cost-efficient way to additional infrastructure will be Data Center cool a DC while using minimal water constructed to support campus development - 50,000,000 100,000,000 150,000,000  Estimates show that the water use Gallons/Year to support DEC cooling on this site  City considering creating a are below the water usage if the site reclaimed water system – was development as medium reducing the need for domestic Page 37 of 40 density residential water to cool the DCs 34 Potential Economic Impact Data Centers are economic drivers. Tier 4: Community Contributions  Each direct job associated with the project could see as many as 3.5indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others.  Hundreds of additional construction jobs through the life of the project. Tier 3: Job Creation  Each direct job associated with the project could see as many as 3.5indirect jobs in the community. Supporting jobs like HVAC, maintenance, and others.  Hundreds of additional construction jobs through the life of the project. Tier 2: Indirect Tax Impact  Taxes on sales / property with the data center supplychain  Income tax on construction workers, datacenter operations staff, and individuals in the supplychain Tier 1 Tax Generation  Taxes paid directly by data center operators on investment including real estate,tangible property, business license, utility, and sales tax Page 38 of 40 on equipment 5  Noise  Noise is regulated by the Minnesota Pollution Control Agency (MPCA)  For residential locations (NAC 1), the limits are L10 = 65 dBA and L50 = 60 dBA during the daytime (7:00 a.m. – 10:00 p.m.) and L10 = 55 dBA and L50 = 50 dBA during the nighttime Tract (10:00 p.m. – 7:00 a.m.)  Data Centers are categorized as NAC – 3  Noise from data centers cannot create noise that exceeds the dBA on adjacent residential property.  A noise study is underway.  Noise generated from on-site equipment can be mitigated via:  Building, equipment and generator orientation  Shielding of equipment with walls, berms, and landscaping  Silencers, mufflers, and enclosures  Vibration isolators Page 39 of 40  Equipment selection Designed by Freepik: www.freepik.com 36 Economic Impacts to Farmington Public Schools if Residential Built  Medium density residential development would cost the FPS district $3M to $5M /year.  Data Center development will add 0 students and pose no impacts to the school district.  The school district and the City will benefit from a positive tax contribution from data center development. 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