At its peak, the Androscoggin paper mill in Jay, Maine, a rural city about 67 miles northwest of Portland, employed about 1,500 individuals — till a pulp digester exploded in 2020, forcing the mill to shut completely.
In 2023, the 1.4 million-square-foot facility was purchased through a joint venture by JGT2 Redevelopment and various different holding and capital corporations. The undertaking is led by developer Tony McDonald. Over the following three years, McDonald and his staff broke down the mill’s equipment and shipped it to Pakistan, and labored to scrub up the economic web site for resale. That resale settlement was finalized earlier this 12 months, in line with McDonald — turning Jay into the newest flashpoint over large knowledge facilities in America.
Maine is especially interesting for knowledge middle builders for its comparatively cool year-round temperatures, lax land-use statutes, and 54 percent renewable energy mix, the eighth highest within the nation. There’s a handful of deliberate knowledge facilities across the state, which not too long ago prompted the state legislature to move a invoice ordering an 18-month moratorium on permits and constructing of any proposed knowledge middle that consumes greater than 20 megawatts of energy. Lawmakers wished to pause development with a purpose to research knowledge facilities’ affect on native economies, the facility grid, and the surroundings.
However that invoice, which might have been the nation’s first, was vetoed by Maine Gov. Janet Mills final month. In her veto, she cited one overriding cause: jobs. A $550 million facility proposed for the shuttered paper mill in Jay, she argued, would create 125 to 150 everlasting, high-paying positions in a city that had watched its largest employer shut.
From mill cities in Maine to farm counties in Indiana to desert plots outside Abilene, Texas, knowledge middle builders are telling native governments: Carry us in, give us what we’d like, add some tax breaks, and the roles will comply with. More than 35 states have responded by providing incentives and extra to draw the trade.
There’s little research into whether or not large industrial websites truly ship the long-term financial positive aspects they promise, however early reports counsel in any other case. Specialists say that rural communities usually lack the governmental experience to correctly assess how knowledge facilities would possibly affect an space. In accordance with current Pew Research Center data, 67 % of deliberate knowledge facilities within the US are headed to rural areas, and 39 % are going to counties that presently have none. As knowledge middle growth scales quickly, it’s turning into clear that what rural communities across the nation are literally getting isn’t jobs, however a power- and water-hungry industrial facility that quickly employs about as many individuals as a midsize restaurant.
The information middle struggle in Maine
Initially, Tony McDonald had deliberate to promote the mill to an oriented strand board firm referred to as Godfrey Forest Merchandise, which might have employed roughly 150 individuals, he mentioned. When federal tariffs killed the monetary backing for that undertaking, McDonald pivoted to an concept he’d been getting pitches about.
“Most people that had been contacting us, you realize, they had been all hat and no cattle,” McDonald mentioned. He fielded a number of calls from what he phrases “knowledge middle cowboys” who claimed to have one of many seven massive tech corporations as a shopper and had been on the lookout for a spot to construct a brand new knowledge middle. When he’d dig deeper on the caller, he’d discover that they didn’t even have the backing they claimed.
After a number of conversations, he started pursuing a knowledge middle partnership with Sentinel Data Centers, a New York-based firm that focuses on knowledge facilities serving the healthcare, monetary, and hyperscale industries, in line with its web site. Sentinel didn’t reply to a number of requests for remark for this story.
McDonald says that, as he understands it, the undertaking in Jay will probably be a neocloud knowledge middle, a specialised facility constructed to ship high-performance GPU computing for AI and machine studying workloads. If a neocloud knowledge middle goes into the outdated mill, it is going to require greater than 100kW of energy per rack, in line with trade requirements, and can want both direct-to-chip or immersion cooling, each of which require ample area and water assets.
“Most people that had been contacting us, you realize, they had been all hat and no cattle.”
— Tony McDonald, JGT2 Redevelopment
Whereas McDonald has repeatedly mentioned that he’s not all in favour of tax breaks for the undertaking, he did wish to go away the door open for potential tax advantages down the highway if the city determines that it’s price it. Simply earlier than Mills vetoed the moratorium, the Maine state legislature passed a law that excludes data centers from a few of Maine’s tax breaks for companies, however it leaves the door open for native municipalities to supply tax break agreements and different municipal incentives. That might spell hassle for small communities like Jay, hoping for a tax windfall to assist them put money into faculties, neighborhood buildings, and roadworks.
Maine state Rep. Melanie Sachs, the sponsor of the Maine moratorium invoice, claims that McDonald didn’t inform the Jay Choose Board of the brand new plan to show the mill into a knowledge middle till late February 2026, simply days earlier than her moratorium invoice was scheduled for a ground vote. Her invoice was first launched to committee on January thirtieth.
The Choose Board heard McDonald’s presentation in March and voted 4-0 in help, in line with The Maine Monitor. The moratorium invoice handed each the state Home of Representatives and Senate on April 14th, and Mills vetoed it on April twenty fourth, citing the job creation in Jay as her cause.
Sachs, who chairs Maine’s Home Vitality, Utilities and Know-how Committee, mentioned her laws was by no means about banning knowledge facilities. “This invoice was about creating the playbook,” she mentioned. “And we had been informed, ‘Don’t fear your fairly little heads about it, knowledge facilities usually are not coming to Maine anytime quickly.’ They got here anyway, and and not using a framework in place, cities don’t have any mechanism to judge the claims builders are making.”
“Even when it’s 30 jobs, which means rather a lot to Jay, then, okay, however you’ve swept away protections for 1.4 million Mainers for 30 jobs,” Sachs mentioned.
The economics of information facilities
Michael Hicks, the director of the Heart for Enterprise and Financial Analysis at Ball State College, is an economist and a professor who final November revealed one of many first causal analyses of data center employment effects in the United States. He studied knowledge middle openings throughout 254 Texas counties and measured their precise impact on native long-term employment.
He discovered that web job creation was successfully zero. No matter long-term jobs existed at knowledge facilities had been being offset by losses elsewhere in the identical sector.
”As you drive by a knowledge middle, you see individuals engaged on it,” Hicks mentioned. “You see development employees. The motels domestically are packed. However there’s no web pulse of that. A number of these employees are there for 3 weeks to do their a part of it, after which they’re gone … The actual query is whether or not there are everlasting jobs related to knowledge facilities, and in Texas, the reply is not any.”
“A number of these employees are there for 3 weeks to do their a part of it, after which they’re gone.”
— Michael Hicks, Ball State College
Texas serves as a really perfect check mattress due to its remoted grid and a mixture of giant, fast-growing metros and tech hubs alongside rural, distant cities, which mirrors the remainder of the nation. As Hicks places it, it’s primarily a mini-United States with its number of areas, and the financial classes discovered in Texas will be broadly utilized throughout the nation.
Rural cities are sometimes “outgunned” when making an attempt to barter offers with giant knowledge middle builders, mentioned Anthony Elmo, public schooling funding defender at Good Jobs First, a nonprofit analysis middle centered on company and authorities accountability in financial growth.
“They don’t have the assets to barter,” mentioned Elmo. “They don’t know what to ask for. They don’t have the authorized experience, and so they don’t really feel like they’ve the leverage, which I feel is a part of the difficulty.”
On the nationwide stage, the maths isn’t a lot better, both. Business Insider not too long ago reported that the nationwide subsidy for knowledge facilities exceeded $2 million in prices per everlasting job, and in some instances, like one in New York, corporations received nearly $77 million in tax breaks for a facility that created exactly one permanent position.
Microsoft’s Quincy, Washington, facility, which is roughly similar to the preliminary plan in Jay, employed as many as 500 employees throughout development however now operates with simply 50 full-time staff. The kind of knowledge middle being constructed determines the place on that spectrum of long-term employment a neighborhood lands. Neocloud knowledge facilities, just like the one coming to Jay, can require 30 to 50 full-time employees, relying on dimension.
“Of these, say, 50 jobs, a piece of them are upkeep, a piece of them are technicians answerable for backup mills. The high-tech jobs make up possibly 10 % of the ability,” Elmo factors out. And plenty of instances, knowledge middle corporations will rely distant employees in different states as staff of the state by which the info middle is situated. “We could get a bit little bit of an financial impact from that, however it isn’t practically as a lot as if it had been a bodily individual in Maine shopping for items and including to the native financial system,” he mentioned.
Many of the lobbying round knowledge facilities focuses on job creation and “upskilling,” or coaching employees for brand new or better-paying jobs. However in line with researchers, even the retraining argument holds little water.
Slightly below 30 % of Jay’s inhabitants has a bachelor’s diploma or increased, whereas 90 % have a highschool diploma, according to recent census data. And, as Ball State College’s Hicks says, schooling issues for upskilling.
Within the 1800s, when farm laborers had been despatched into the workforce within the Midwest, that they had a fundamental schooling that made them trainable for manufacturing unit work. Following World Struggle II, women and men returned from the factories and the battlefield having discovered many new expertise, and within the post-Civil Rights South, extra Black women and men grew to become educated and entered the workforce in methods that they had been unable to earlier than.
Neocloud knowledge facilities, just like the one coming to Jay, can require 30 to 50 full-time employees, relying on dimension
As Hicks factors out, every of those three industrial revolutions solely labored due to the massive, new provide of educated individuals prepared to maneuver into these jobs. In contrast, the US presently has negative net immigration, low birth rates, and persistently underfunded education; there isn’t a equal human-capital “wave” to help an analogous jobs growth in knowledge facilities and AI, he says.
“The waves of industrialization accompanied waves of human capital into the USA,” Hicks mentioned. “So, the place do we expect there’s this surge of employment surrounding knowledge facilities that may mimic these three occasions?”
”The massive tech corporations are investing in upskilling the development trades,” Elmo factors out, citing OpenAI’s recent agreement with NABTU and noting that in absolutely developed knowledge middle markets, electricians and HVAC upkeep employees float from undertaking to undertaking as contractors. “For states that don’t have developed knowledge middle infrastructure, like Maine, it’s not a everlasting job. It’s an 18-month job. That’s it.”
The roles promise, Hicks argues, distracts from the one profit a knowledge middle can reliably present to a rural neighborhood: tax income.
Utilizing the Jay knowledge middle for example, Hicks says {that a} $550 million knowledge middle in a city of 4,620 individuals, the place the median home value is around $215,000, would carry an assessed worth exceeding the mixed price of each residence and each enterprise within the city. The previous mill had a tax abatement however generated roughly $1.8 million in tax income for Jay in its final 12 months of operation, according to the Livermore Falls Advertiser. Taxed on the identical charge as another industrial property, that income might fund faculties, rebuild infrastructure, and appeal to residents for generations.
”You could possibly make that city right into a Hallmark Channel city with these kinds of tax {dollars}, after which jobs would comply with,” Hicks mentioned. However that every one is dependent upon whether or not or not the city decides to grant the long run undertaking particular tax breaks.
Rural cities are sometimes “outgunned” when making an attempt to barter offers with giant knowledge middle builders
It’s not clear exactly how a lot tax income the info middle might generate, as of this reporting, as a result of there are nonetheless many unknowns concerning the undertaking, together with who Sentinel’s shoppers is perhaps, the kind of knowledge middle that will probably be constructed, what sort of tax incentives the city Choose Board would possibly provide, and even what number of jobs the info middle would possibly carry to Jay.
McDonald’s job estimates have been everywhere in the map, starting from 100 to 150 because the undertaking has progressed. He says the numbers he gave the Choose Board and the state legislature are based mostly on what Sentinel has informed him, however warned that he’s “not a knowledge middle man.”
What knowledge facilities truly imply for jobs
Finally, it is a tech ouroboros. The identical knowledge middle infrastructure, sponsored as a jobs program, is purpose-built to scale back human labor, and the AI it powers is explicitly designed to automate work. Communities are being requested to commerce tax income and grid capability for jobs in an trade whose core product is labor alternative.
“It’s the most important capital expenditure for the reason that Manhattan Venture, and it isn’t going to create tens of 1000’s of jobs in the long run,” Elmo mentioned. “It’s not some financial growth. Meta, Amazon, OpenAI, Oracle, they’re shedding jobs in actual time whereas spending billions on knowledge facilities in order that different organizations can shed extra jobs by AI. In some unspecified time in the future, individuals must ask extra crucial questions on this.”
As Hicks factors out, rural America is being bought the identical invoice of products it has been bought for 50 years. “Civic leaders reside 75 to 150 years previously,” and framing these knowledge middle offers within the outdated industrial-boom mindset with out the tutorial and demographic situations that made earlier booms potential.
The mill didn’t save rural cities, nor did the manufacturing middle, the decision middle, or the Amazon warehouse. Based mostly on the financial knowledge, knowledge facilities won’t save them both, and the one factor that would genuinely assist — treating the ability’s tax base as a neighborhood windfall reasonably than a negotiating chip — is exactly what most states are legislating away.
