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Despite the controversy, data centers could be attractive to struggling rural towns

MARY LOUISE KELLY, HOST:

All right, if there is one thing liberal Democrats, MAGA Republicans and most Americans in between might agree on, it's data centers. Cities and counties across the country are blocking them over water and power usage, noise pollution, AI concerns. But as Frank Morris of member station KCUR reports, data center development can look pretty attractive in a struggling rural town.

FRANK MORRIS, BYLINE: A weedy soybean field on a brick road 2 miles from the half-empty downtown of tiny Osawatomie, Kansas, has long been a headache for city manager Bret Glendening. It's an unused business park, one of many scattered across rural America.

BRET GLENDENING: The two parcels that are in question that the city owns have been zoned industrial for well over 20 years. It's always been planned and hoped that this would eventually happen - not necessarily a data center, but any sort of commercial development.

MORRIS: It's not easy drawing any sort of commercial development to a place like Osawatomie, a working-class town of about 4,000, just a little too far from Kansas City. But now, developers have targeted this field for a mid-sized data center, one they say could bring as much as $10 billion worth of new buildings and equipment. That's enough to buy every bit of taxable real estate in Osawatomie 239 times. Glendening says it would dwarf any other investment here.

GLENDENING: It's like comparing the Earth to the Milky Way galaxy. I mean, it's huge. I mean, it is massive.

MORRIS: Glendening says the data center plan that developers are pitching could spin off some $40 million a year in taxes and fees, more than doubling the city's budget. It might even replace Osawatomie's long-lost financial base, the railroad. John Fletcher, who volunteers at the Osawatomie History and Railroad Museum, says the Missouri Pacific pulled up stakes almost 50 years ago, taking hundreds of jobs and much of the town's economic lifeblood with it.

JOHN FLETCHER: We've never recovered from that, and it's just hard to replace.

MORRIS: Now, with scant industry and not so much as a grocery store, Osawatomie leans on homeowners for almost 80% of its property tax revenue. Fletcher says the city desperately needs to expand its tax base, but he's not sure about the data center proposal.

FLETCHER: I'm neither for or against it. There's just not enough information for me yet. But this town has to do something or it's probably going to go under.

MORRIS: Still, data center is a hard sell here.

LEE BREWER: It's going to be used to trample on our liberties and our freedom.

MORRIS: Lee Brewer also worries that the data center will leave Osawatomie short of water and electricity. Michael Hursey, a retired Walmart manager, wants to use the site for diversified organic farming. He's worried about the AI boom going bust, and he doesn't trust the people bankrolling the industry.

MICHAEL HURSEY: The billionaires know how to play these country towns, and it's like the Dodgers playing a Little League team. The people around here don't know how to play that game, or they don't know the level they're playing at.

MORRIS: The town's not dealing with big corporations yet, just developers trying to line up the land, power, water and permits for a future builder. Charles Tinsley is with MDH Partners in Atlanta, the money behind the Osawatomie proposal. He says the data center would use less water than a golf course and contract for its own electricity, all the while spinning off millions in fees and taxes.

CHARLES TINSLEY: They're just going to be sitting on the edge of town printing cash for the city. That's all that they're going to do. They're not going to be asking for tons of tax breaks. They're not going to be consuming a bunch of municipal services. They're not going to be adding more students to the classroom.

MORRIS: Tinsley says data centers are a lot like the railroads that built towns like Osawatomie in the 1800s. They're fundamental to commerce and bound to be built somewhere. Be that as it may, 19-year-old Makayla Bowers just doesn't care.

MAKAYLA BOWERS: The pros and cons don't really matter to me in a way because I'm not sticking around. So I plan to leave the town, not because of the data center, but personally because there's not much in the town for me.

MORRIS: So places like Osawatomie have to balance the potential downsides of data centers against the need to do something to keep their young people and their economic vitality from ebbing away. For NPR News, I'm Frank Morris in Kansas City. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Frank Morris
Frank Morris