(The Center Square) – A naturally silent stretch of fields and woods, set between two nuclear plant cooling towers and a bustling mall, caused Limerick Township to get a request for another kind of silence: a non-disclosure agreement.
A data center was being pitched for the 191-acre patch in Montgomery County, near Pottstown. People associated with the idea wanted Limerick to do an “NDA,” according to Daniel Kerr, longtime township manager. He said the municipality’s supervisors and solicitor discussed the pitch and decided not to sign.
“We just didn’t think it was the right thing to do,” Kerr said. “We want all the discussions to be public.”
Not every municipal government thinks that way. In Virginia, a hotbed of data center activity, 25 out of 31 local- and county-level governments that were surveyed by university researchers said they had signed NDA’s tied to data center work.
And last week, a U.S. senator wrote to utility regulators in every state – including Pennsylvania Public Utility Commission Chairman Stephen DeFrank – looking for information on data center-related NDA’s.
“They typically call for governments to share as little information as possible,” said Eric Bonds, the sociology professor at Mary Washington University in Virginia who carried out the study there using Freedom of Information requests. But when word of NDA’s gets out, he said, “People don’t like the idea of secret deals being made or information being withheld from them.”
Data center dealmaking is happening all over the place.
In Pennsylvania, at least 60 separate unfinished data center concepts have been identified, their status running the gamut from “proposed” or “preliminary activity” to “under construction” or “withdrawn,” according to Data Center Proposal Tracker. The website, which describes itself as being “citizen-run” and created by a software developer from northeastern Pennsylvania, lists 70-plus others as already “active.”
“This is the hottest topic I have ever seen in my 10-plus years of public service,” said Bill Gaughan, a Lackawanna County commissioner who previously served eight years on Scranton City Council.
Massive power demands, water use, and potential noise have combined to put the proposals under a spotlight. Now, secrecy has joined that list.
The Limerick data center proposal in Montgomery County would involve eight two-story data center buildings with about 2.8 million square feet of space, three substations and support buildings.
The Limerick planning commission is scheduled to once again take up a “conditional use” request from applicant MCD 7 LLC on Thursday at 6:30 p.m. Anticipation of a big crowd has prompted moving the meeting to a high school auditorium.
According to media coverage, an attorney who spoke publicly about the proposal in January would not disclose the identity of the end user because of a non-disclosure agreement – one that apparently did not involve the township. Reached by phone recently, the attorney, Ed Campbell, said he “was not at liberty to discuss who the end user” of the project would be.
The notion of secrecy riled state Rep. Joe Ciresi, a Democrat who represents the area. On Monday, he filed a bill in Harrisburg that would prohibit state and local agencies, among others, from getting into NDAs about data centers.
The Republican senator for the area, Sen. Tracy Pennycuick, can’t understand why the potential ultimate owner of any proposed major development should not be made public.
“I don’t know why anybody would want to do that,” she said.
Meanwhile, U.S. Sen. Richard Blumenthal, a Connecticut Democrat, said last week that data center operators are attempting to use NDA’s to “limit state and local officials’ ability to share information” on the proposals. Ranking member of the Senate Permanent Subcommittee on Investigations, Blumenthal sought from Pennsylvania’s DeFrank “documents and information regarding non-disclosure agreements or other restrictions” on public disclosure of potential data center impacts.
Asked about that letter, a PUC spokesman on Friday said he would “circle back with any relevant information” but as of Monday had not supplied any.
A Wilkes-Barre attorney, Frank Hoegen, said a “hysteria” has developed around data centers because they are little known or understood. Meanwhile, he said, NDA use is nearly universal in certain business arenas.
When two parties start to feel out a business transaction, he said, information that is swapped could be confidential or involve proprietary information or trade secrets. NDAs give necessary protections, according to Hoegen.
“Any responsible business owner is going to start off that way,” he said.
Those who demand to know the “end user” for a particular data center proposal may not understand that in a land investors-developer-end user sequence of involvement, the actual “end user” may not be known during an early phase, according to Hoegen.
Beyond that, Hoegen said, he only works on projects that are “positive” for land use, like re-purposing mine-scarred or contaminated locations, or former quarries.
“This whole hyper-vigilance on data centers, in my whole 36 years of projects, I think is misplaced,” he said.
Another attorney, Clint Barkdoll, has done municipal- and county-level government legal work in Franklin and Adams counties. NDAs signed by government, he said, would be cause for “real concerns.” The very nature of NDAs, he said, creates a challenge to easily learning whether they exist.
The proposed site in Limerick Township is near the Philadelphia Premium Outlets and a nuclear power plant. Close-by neighbors include 77-year-old Phillip Marks, who has lived in Lower Pottsgrove Township just across the municipal line for more than 70 years.
“I really don’t want it here,” he said. Sheepishly, he added, “I wasn’t for the nuclear power plant, either.”
Seventy-year-old John Platchek runs an auto business adjacent to the site where the data center is being proposed. He has no real objections.
“I cut cars apart and that makes noise. So the noise they make won’t bother me,” he said.
Kerr noted that a previous proposal for the land was a trucking center that could have seen 1,200 trucks a day going in and out. The use, he said, was allowed in that zone.
Some time ago – before the data center boom was well known – the proposal changed.
“The developer walked in one day and said, ‘What about a data center?'” Kerr recalled. “We said, ‘What’s a data center?'”
