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 bought by means of a three way partnership by JGT2 Redevelopment and various different holding and capital firms. The mission is led by developer Tony McDonald. Over the following three years, McDonald and his workforce broke down the mill’s equipment and shipped it to Pakistan, and labored to scrub up the commercial web site for resale. That resale settlement was finalized earlier this 12 months, in response to McDonald — turning Jay into the most recent flashpoint over large knowledge facilities in America.
Maine is especially interesting for knowledge heart builders for its comparatively cool year-round temperatures, lax land-use statutes, and 54 % renewable vitality combine, the eighth highest within the nation. There’s a handful of deliberate knowledge facilities across the state, which lately prompted the state legislature to cross a invoice ordering an 18-month moratorium on permits and constructing of any proposed knowledge heart that consumes greater than 20 megawatts of energy. Lawmakers needed to pause building to be able to research knowledge facilities’ impression on native economies, the facility grid, and the setting.
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 purpose: 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 abandon plots exterior Abilene, Texas, knowledge heart builders are telling native governments: Convey us in, give us what we want, add some tax breaks, and the roles will observe. Greater than 35 states have responded by providing incentives and extra to draw the business.
There’s little analysis into whether or not huge industrial websites really ship the long-term financial good points they promise, however early experiences recommend in any other case. Consultants say that rural communities usually lack the governmental experience to correctly assess how knowledge facilities may impression an space. In accordance with current Pew Analysis Heart knowledge, 67 % of deliberate knowledge facilities within the US are headed to rural areas, and 39 % are going to counties that at the moment have none. As knowledge heart growth scales quickly, it’s changing 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 heart combat 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 mission, McDonald pivoted to an thought he’d been getting pitches about.
“The general public that have been contacting us, you already know, they have been all hat and no cattle,” McDonald mentioned. He fielded a number of calls from what he phrases “knowledge heart cowboys” who claimed to have one of many seven massive tech firms as a shopper and have been on the lookout for a spot to construct a brand new knowledge heart. When he’d dig deeper on the caller, he’d discover that they didn’t even have the backing they claimed.
After just a few conversations, he started pursuing an information heart partnership with Sentinel Information Facilities, a New York-based firm that focuses on knowledge facilities serving the healthcare, monetary, and hyperscale industries, in response to 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 mission in Jay can be a neocloud knowledge heart, a specialised facility constructed to ship high-performance GPU computing for AI and machine studying workloads. If a neocloud knowledge heart goes into the outdated mill, it is going to require greater than 100kW of vitality per rack, in response to business requirements, and can want both direct-to-chip or immersion cooling, each of which require ample area and water assets.
“The general public that have been contacting us, you already know, they have been all hat and no cattle.”
— Tony McDonald, JGT2 Redevelopment
Whereas McDonald has repeatedly mentioned that he’s not eager about tax breaks for the mission, he did need to depart the door open for potential tax advantages down the street if the city determines that it’s value it. Simply earlier than Mills vetoed the moratorium, the Maine state legislature handed a regulation that excludes knowledge facilities from a few of Maine’s tax breaks for companies, but it surely leaves the door open for native municipalities to supply tax break agreements and different municipal incentives. That might spell bother for small communities like Jay, hoping for a tax windfall to assist them spend money on colleges, group 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 an information heart 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 response to 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 purpose.
Sachs, who chairs Maine’s Home Power, 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 have been advised, ‘Don’t fear your fairly little heads about it, knowledge facilities will not be coming to Maine anytime quickly.’ They got here anyway, and with out a framework in place, cities haven’t any mechanism to guage the claims builders are making.”
“Even when it’s 30 jobs, meaning quite a bit to Jay, then, okay, however you’ve swept away protections for 1.4 million Mainers for 30 jobs,” Sachs mentioned.
The economics of knowledge 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 printed one of many first causal analyses of knowledge heart employment results in america. He studied knowledge heart 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 have been being offset by losses elsewhere in the identical sector.
”As you drive by an information heart, you see individuals engaged on it,” Hicks mentioned. “You see building employees. The lodges domestically are packed. However there’s no web pulse of that. Quite a lot 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 isn’t any.”
“Quite a lot 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 great check mattress due to its remoted grid and a mixture of massive, 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 realized in Texas could be extensively utilized throughout the nation.
Rural cities are sometimes “outgunned” when attempting to barter offers with massive knowledge heart builders, mentioned Anthony Elmo, public training funding defender at Good Jobs First, a nonprofit analysis heart 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, they usually 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. Enterprise Insider lately reported that the nationwide subsidy for knowledge facilities exceeded $2 million in prices per everlasting job, and in some circumstances, like one in New York, firms obtained almost $77 million in tax breaks for a facility that created precisely one everlasting place.
Microsoft’s Quincy, Washington, facility, which is roughly akin to the preliminary plan in Jay, employed as many as 500 employees throughout building however now operates with simply 50 full-time workers. The kind of knowledge heart being constructed determines the place on that spectrum of long-term employment a group lands. Neocloud knowledge facilities, just like the one coming to Jay, can require 30 to 50 full-time workers, relying on measurement.
“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 perhaps 10 % of the power,” Elmo factors out. And lots of occasions, knowledge heart firms will depend distant employees in different states as workers of the state wherein the info heart is situated. “We might get somewhat little bit of an financial impact from that, but it surely isn’t almost as a lot as if it have been a bodily particular person in Maine shopping for items and including to the native economic system,” he mentioned.
A lot of the lobbying round knowledge facilities focuses on job creation and “upskilling,” or coaching employees for brand new or better-paying jobs. However in response to researchers, even the retraining argument holds little water.
Just below 30 % of Jay’s inhabitants has a bachelor’s diploma or greater, whereas 90 % have a highschool diploma, in response to current census knowledge. And, as Ball State College’s Hicks says, training issues for upskilling.
Within the 1800s, when farm laborers have been despatched into the workforce within the Midwest, that they had a primary training that made them trainable for manufacturing facility work. Following World Battle II, women and men returned from the factories and the battlefield having realized many new abilities, and within the post-Civil Rights South, extra Black women and men turned 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 workers, relying on measurement
As Hicks factors out, every of those three industrial revolutions solely labored due to the large, new provide of educated individuals prepared to maneuver into these jobs. In contrast, the US at the moment has detrimental web immigration, low delivery charges, and persistently underfunded training; there isn’t a equal human-capital “wave” to help the same jobs growth in knowledge facilities and AI, he says.
“The waves of industrialization accompanied waves of human capital into america,” 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 firms are investing in upskilling the development trades,” Elmo factors out, citing OpenAI’s current settlement with NABTU and noting that in absolutely developed knowledge heart markets, electricians and HVAC upkeep employees float from mission to mission as contractors. “For states that don’t have developed knowledge heart 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 an information heart can reliably present to a rural group: tax income.
Utilizing the Jay knowledge heart for example, Hicks says {that a} $550 million knowledge heart in a city of 4,620 individuals, the place the median dwelling worth is round $215,000, would carry an assessed worth exceeding the mixed value of each dwelling 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, in response to the Livermore Falls Advertiser. Taxed on the similar charge as another business property, that income might fund colleges, rebuild infrastructure, and entice residents for generations.
”You might make that city right into a Hallmark Channel city with these kinds of tax {dollars}, after which jobs would observe,” Hicks mentioned. However that each one is determined by whether or not or not the city decides to grant the longer term mission particular tax breaks.
Rural cities are sometimes “outgunned” when attempting to barter offers with massive knowledge heart builders
It’s not clear exactly how a lot tax income the info heart might generate, as of this reporting, as a result of there are nonetheless many unknowns in regards to the mission, together with who Sentinel’s shoppers is perhaps, the kind of knowledge heart that can be constructed, what sort of tax incentives the city Choose Board may provide, and even what number of jobs the info heart may deliver to Jay.
McDonald’s job estimates have been everywhere in the map, starting from 100 to 150 because the mission has progressed. He says the numbers he gave the Choose Board and the state legislature are primarily based on what Sentinel has advised him, however warned that he’s “not an information heart man.”
What knowledge facilities really imply for jobs
In the end, this can be a tech ouroboros. The identical knowledge heart infrastructure, sponsored as a jobs program, is purpose-built to cut 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 business whose core product is labor alternative.
“It’s the largest capital expenditure because the Manhattan Challenge, 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 means of AI. Sooner or later, individuals must ask extra essential 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 prior to now,” and framing these knowledge heart offers within the outdated industrial-boom mindset with out the academic and demographic circumstances that made earlier booms attainable.
The mill didn’t save rural cities, nor did the manufacturing heart, the decision heart, 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 power’s tax base as a group windfall somewhat than a negotiating chip — is exactly what most states are legislating away.
