When the Smithfield Town Council approved an ordinance banning data centers earlier this month, it was hailed as a win for local control in the northern Rhode Island town over what critics describe as the negative effects of big data.
“This would keep control of this issue with the Town Council, the elected officials of the town,” Smithfield Town Council Vice President Michael Iannotti said after the vote, “so it’s very important.”
But a data center project proposed for the town is not actually dead.
The entity seeking to build a business complex in Smithfield that would include a data center, Hanton City Investments LLC, filed its application with the town on May 4 – one day before the town council voted 4-1 on its ordinance. (The ordinance takes 30 days to take effect.)
The timing “muddies the waters” about Hanton City Investments’ ability to pursue its project, even in the face of broad local opposition, Town Council President John Tassoni told Ocean State Media Wednesday.
According to the project’s application to the town planning board, “The Project proposes various industrial and warehousing uses, including data centers, digital/data processing facilities and/or data storage/processing facility.”
Smithfield Planning Director Gregory Guertin said it’s not clear whether the business complex plan should be reviewed under the ordinances in place before the data center ban.
Generally, Guertin said, when a proposal is submitted before an ordinance amendment, “there’s precedents for it being heard and reviewed under the ordinance as it existed prior to the amendment.”
However, Guertin added, the use sought by the developer “is already not allowed per our zoning ordinance, because it is not listed in our zoning ordinance.”
Nick Nybo, lawyer for the company behind the proposal, said, “the fact that the application was filed before the effective date of the moratorium is an important factor.”
Nybo said Hanton City believes its proposal is allowed by right in the envisioned location.
Guertin said his view is that Hanton City’s development would require a use variance, “which is a form of relief that could be asked for, but which has a pretty high bar, a high threshold.”
In other words, Rhode Island’s first major data center proposal faces multiple hurdles to move ahead, but the outcome is far from clear.
Outcry over data center plan
Town residents packed the May 5 Smithfield Town Council meeting to urge local officials to stop a data center from being built on an undeveloped site near the campus of Fidelity Investments.
Residents expressed concern that a data center will worsen the town’s quality of life and degrade its environment while producing noise and a relatively small number of full-time jobs.
“This type of development is not the right fit for Smithfield,” Smithfield resident Matthew Sala said at the meeting. “This isn’t about being anti-growth or anti-business. It’s about being thoughtful about what we allow into our town and what kind of future we are building here.”
This isn’t about being anti-growth or anti-business. It’s about being thoughtful about what we allow into our town and what kind of future we are building here.
The large turnout reflected growing public opposition nationwide to the networked computer and storage systems that consume large amounts of electricity and water while fueling the growth of artificial intelligence and boosting the internet.
Resident Kellie Tolley told the council that more than a dozen states are considering bans on data centers.
With residents being asked to limit their comments to three minutes, Tolley convinced the Town Council to let her speak longer by pointing to the fact that the data center proponent previously had about two hours to make a presentation.
“Your duty is to protect our public health, our public resources and the long-term welfare of Smithfield,” she said, “especially our water systems, conservation lands and neighborhoods’ quality of life and businesses.”
According to the Valley Breeze, Hanton City is a partnership between developers Ryan Polumbo, part of energy company Revity Energy, and John Branca.
Tassoni, the Town Council president, said he expects Hanton City Investments to sue the town in an attempt to move forward with its development plan.
Nybo, the lawyer for the partnership, said the Smithfield Planning Department now has a prescribed amount of time to certify the application and schedule hearings on it. If the proposal is not considered under the relevant ordinances at the time it was filed, “obviously the judicial process is an avenue available to any applicant” in similar circumstances.
Grappling with a business decision
According to Hanton City’s application, the company projects its business complex to generate about $59 million in revenue for Smithfield over a 30-year period, with a net gain of almost $42 million.
“These revenues will provide a durable, non-residential tax base that materially supports the Town’s ability to stabilize its overall property tax rate,” according to the application.
Lawmakers have introduced a series of bills related to data centers at the General Assembly, and the company behind the proposed Smithfield data center is seeking tax benefits to pursue its project.
“The legislation is under review,” House Speaker Chris Blazejewski and Senate President Val Lawson said in a joint statement following an inquiry from Ocean State Media. “However, it is our understanding that the Town of Smithfield has enacted a moratorium prohibiting data centers from being constructed in their community.”
State Sen. Louis DiPalma (D-Middletown), chairman of the Senate Finance Committee, is the sponsor of two bills related to data centers.
One is enabling legislation that would allow communities to make data centers a permissible use under planning guidelines. DiPalma describes the other as a guardrail on how a data center could affect electricity costs and water supplies.
Legislation filed by Sen. Pam Lauria (D-Barrington) and June Speakman (D-Warren) would create a special electricity rate for all large-scale electricity users, according to The Providence Journal.
While some people don’t want data centers built in their town, DiPalma said they are an important part of today’s commerce and Rhode Island risks missing out on potential revenue if the state enacts burdensome regulations or fails to provide incentives.
“People say ‘Well, why are we giving away sales and use tax we could be collecting?’ Well, we’re not collecting it now,” he said.
“The data centers are needed,” DiPalma added. “Whether it’s AI, whether it’s companies’ need for data centers for the work that’s being done for a whole host of reasons, (data centers) are going to be put up. And Rhode Island can choose not to do it. And they can put it up in Mass. and Connecticut, and they’ll benefit.”
