Tuesday, October 21, 2014
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Democrats try to force university to accept controversial project

Dover leans on UD, withholds $3M

Democrats try to force university to accept controversial project

File photo: Two people leave the Chrysler plant in Newark, Delaware in 2008. A thousand employees lost their jobs when the cash-starved company closed the complex.
File photo: Two people leave the Chrysler plant in Newark, Delaware in 2008. A thousand employees lost their jobs when the cash-starved company closed the complex.

The budget committee of Delaware's Democratic-controlled General Assembly "voted Thursday to withhold $3 million from the University of Delaware in an attempt to force the university's hand on a controversial plan to build a power plant and data center on the former Chrysler site in Newark," reports the Wilmington News Journal here. 

"The money, earmarked for UD operations, was suddenly removed and parked in a contingency fund at the end of budget hearings on Thursday. Lawmakers on the Joint Finance Committee voted unanimously in favor of the move. 'When people get bogged down in the mud, sometimes you need to get a mule to pull them out," JFC co-chair Sen. Harris McDowell, D-Wilmington, told the paper. 'We want them to get off the dime and decide what they want to do. What we want is to see that Delaware has a chance at 5,000 construction jobs and 900 very high paying jobs.'"

900 jobs, really? Delaware Gov. Jack Markell's office was saying 300 jobs (plus maybe 1,000 short-term construction jobs, not "5,000"), just last winter. I sent Sen. McDowell a note asking him to tell where he's getting these job numbers. So far, zero reply. More on data center employment, from opponents, at the bottom of this item.

Back in 2011, the administration of University of Delaware President Patrick Harker approved the data center proposal. But opposition has grown, and there's now what looks like a full-fledged faculty rebellion -- unusual in a place like UD where a vocal minority, at least, of engineering and business profs can usually be counted on to support the state's key industries.

From a Chronicle of Higher Education report on May 12:

"After residents in the college town of Newark, Del., learned last year that the facility would come with its own 279-megawatt natural-gas power plant, the $1.1-billion project began drawing opposition. Professors at Delaware formally joined the battle last week when the Faculty Senate voted 43 to 0 to recommend against building the data center if it is accompanied by a fossil-fuel power plant of any size...

"A 75-year lease that university leaders have signed with the Data Centers could make the power plant the proverbial done deal... Administrators find themselves in the middle of a standoff between economic-development goals and a faculty that sees the deal as a betrayal...  The university's wholly owned subsidiary 1743 Holdings LLC, which oversees the STAR Campus, signed the ground-lease agreement in December 2012 with the company, known as TDC, for a 43-acre plot on which to build a 900,000-square-foot high-density data center."

In the faculty vote, there were 8 abstentions, the Chronicle reported, including Charles G. Riordan, "vice provost for research and chairman of a working group that university administrators appointed last fall to review the data-center project in the wake of the public criticism. The working group plans to complete its review in less than a month (and make) a recommendation to Delaware's provost, Domenico Grasso, and its executive vice president, Scott R. Douglass," boss of 1743 Holdings.

The working group remains "very enthusiastic about a data center on the STAR Campus because that is consistent with our vision for that campus," Mr. Riordan told the Chronicle. Riordan and Prof. Michael Chajes, the ex-engineering school dean who wrote the faculty's resolution against the data center, added that they "would not mind seeing the data center proceed without the cogeneration plant." 

But that sounds like wishful thinking: "The Data Center's Mr. Kern rejected that proposal outright... Mr. Kern said TDC's lease with 1743 Holdings does not allow officials to block construction of the power plant. Assuming his company gets its air-quality permit from the Delaware Department of Natural Resources and Environmental Control, he said, it plans to proceed... 'I have invested millions'," he told the Chronicle. "If they're willing to repay my money, then sure, I'd move on if they wanted me to." He wouldn't say how many millions. 

More on how-many-jobs: Kathryn Gifford, one of the Newark locals who have mobilized against the project, tells me Sen. McDowell's job projections for the proposed 279 MW natural gas power plant and data center are "phenomenally inflated" compared to these other data centers:

  Google - 110 at their 84MW Lenoir site:
https://www.google.com/about/datacenters/inside/locations/lenoir/index.html
  Google - 130 jobs at their 110 MW Council Bluffs site:
https://www.google.com/about/datacenters/inside/locations/council-bluffs/index.html
  Apple ~35 full time jobs and 500 construction jobs for their 270-acre Reno site:
https://gigaom.com/2013/12/17/apple-makes-progress-on-its-solar-powered-data-center-in-reno-but-of-course-its-controversial/

Gifford and other data center opponents say state and local approval of the proposed center's gas-fired power plants are the investors' real objective. She notes those power plants aren't necessarily large employers either:

   Calpine, in Dover Delaware, 309 MW power plant, "250 construction jobs and 16 permanent operating positions at the site" http://delaware.newszap.com/centraldelaware/123537-70/calpine-breaks-ground-eyes-efficient-energy-future

But Data Center supporters insist the project will be less disruptive than the former Chrysler car assembly plant that filled the surrounding site from around 1948-2010.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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