Borough assembly overrides mayor’s veto of land for data center and joint-marketing with company

The Matanuska-Susitna Borough assembly overrode Mayor Edna DeVries’ veto Tuesday, March 17, of a resolution supporting the borough joining forces with a private company to market the Mat-Su as a location for a large data processing center. Assembly person Stephanie Nowers was the only vote against the override.

DeVries had vetoed the measure, RS 26-019 because not enough is known about the local impacts of a large data center and it was inappropriate for the borough to partner with a private company in promoting it with a number of borough residents opposed to the project. Assembly members Fonov and Bernier sponsored the original resolution, which was passed and vetoed, and is now passed again with the veto override.

The assembly also heard more about proposed school closures Tuesday evening. While this is a decision the Matanuska-Susitna Borough School District school board will make, the borough could help the district deal with a $20 million-plus budget deficit, several local residents told the assembly. Larson Elementary and Meadow Lakes Elementary two schools targeted for possible closure. Children in both schools in special needs programs would be displaced to nearby schools, which are already crowded, the assembly was told. The effect of this may draw federal scrutiny of the school district’s use of special needs funds, which total $63 million per year.

While Mat-Su has the highest population growth of any of the state’s large municipalities but the borough makes the lowest local contribution to support schools, it was said. The Mat-Su borough pays 73% of the maximum allowable local contribution to its school district compared with 83% in Fairbanks, 96% in Anchorage and 100% in both Kenai and Juneau, the assembly was told. If the assembly were to pay the same local contribution as Anchorage there would likely be enough money to keep the two elementary schools open, local residents said.

On the data center proposal, Terra Energy System Corp. said it plans to begin a marketing program in April to promote Mat-Su as a location for a data center. The availability of land, access to transportation infrastructure such as the borough’s Port MacKenzie, and the cool climate of Southcentral Alaska, which would help cool a data center, are key advantages for Mat-Su in the marketing, according to the resolution passed by the assembly.

Power could also be made available form a large coal-fired power plant also proposed by Terra Energy. An affiliated company, Flatlands Energy, is exploring coal resources in the western part of the Mat-Su borough, and Terra Energy proposes to build a power plant at the site along with transmission lines to bring the power to population centers in the borough as well as the Port Mackenzie industrial area.

Under the plan Terra Energy would promote available lands in Mat-Su as an attractive location, and the resolution authorizes borough manager Mike Brown to negotiate with the company for leases of borough land. Several tracts have been identified as possible sites for a data center or other facilities. The company is particularly interested in a tract with 1,058 acres near Lake Lorraine and parcels near Goose Creek that total 2,645 acres, and the assembly resolution authorizes Brown to begin negotiations for leases on these with Terra Energy.

However, the borough’s land management division has also identified several other tracts that could be included in the joint-marketing program, according to the resolution. These include parcels near Fish Creek that total 3,435 acres; parcels identified as Ayrshire North that involve 2,560 acres, and lands near Hollywood Road that include about 1,230 acres.

The idea has gotten a sharp negative reaction from some local residents, however. The high energy and water use of data centers have created problems in Lower 48 locations where the centers are being built. In some areas the heavy energy demand has upset operations of local power grids and increased electricity prices for consumer, critics of the idea told the assembly last Tuesday.

Also, a data center will not create a large number of permanent jobs although there will be temporary construction jobs, the assembly was told. Other criticism is that nothing is known about the owners of Terra Energy and whether foreign companies might be involved. The financing for the coal plant, a which would supply power, appears to be coming from federal tax credits. “This is public money in and private profits out,” said one resident.

In her veto message DeVries said: “Location of data centers within our borough has not been vetted by our assembly and the recent testimony at our public meetings is that some of our citizens have concerns regarding data centers. As elected officials, we owe it to our citizens,” to maintain a reputation for transparency,” she said.

Forming a partnership for marketing, which the resolution endorses, “has not been discussed with our citizens or at assembly meetings,” the mayor said. A data center, with its high energy use, noise and need for security would require a conditional (land) use permit, which the assembly has not discussed,” DeVries said.