Bill aims to incentivize data centers as residents plug their ears

Residents of several communities in Chandler have been plugging their ears due to the hum of a nearby data center as their state senator is pushing a tax cut that would incentivize more companies to build data centers in Arizona.

Senate Bill 1366, sponsored by Sen. JD Mesnard, R-Chandler, would expand an already existing tax exemption put in place in 2013 that gives data centers a tax break for certain software. The original intent of the 2013 bill was to incentivize companies looking to build data centers in the Grand Canyon State.

The bill would allow those companies to add additional software to the exemption. For companies that have operated since 2013, the expanded exemption is retroactive, allowing them to apply it to software used up to six years ago.

Legislative budget analysts estimate the expanded exemption will cost the state $8.5 million a year. Counties are expected to see a 16.2-percent loss in tax collections as well.

Robert Diepenbrock, a member of Chandler’s Dobson Noise community, lives near one of the largest data centers in Arizona.

The CyrusOne facility in Chandler was built in 2012, and has been continually expanding ever since.

Diepenbrock and other members of the community were all unaware of Mesnard’s bill. Not everyone agreed on the philosophy behind tax breaks but they could all agree on one thing: They don’t want more data centers in their area.

“It’s overwhelming, its huge,” Diepenbrock said of the 57-acre CyrusOne campus that sits next to his community. The hum of its air conditioner units has been driving him and others crazy for years, Diepenbrock said.

Mesnard did not respond to a request for comment.

‘Additional angst among our residents’

Back in 2018, media attention on the noise complaints brought CyrusOne to the table with city leaders and community leaders. The company promised to install sound attenuation packages, but residents said they have yet to hear any changes in the sound.

In an emailed statement to the Arizona Mirror, CyrusOne spokesman David M. Baum said the company is “committed to being a good neighbor.”

“While we continue to be in compliance with the City of Chandler’s ordinances, we speak with the City of Chandler regularly to discuss ways to attenuate the issue,” the statement said, adding that the company is still in the process of installing the sound attenuation packages.

However, letters obtained by the Mirror from the City Manager to CyrusOne’s CEO tell a different story.

Last year, City Manager Marsha Reed sent a letter to the CEO of Texas based CyrusOne asking him to update her on the status of their attempts to remedy the situation and also stated that the company was likely in violation of local sound ordinances.

After getting no reply, she sent another letter.

At the time, the company had said it would have the sound attenuation packages installed by Oct. 2018.

“Timely completion of this noise elimination work is a serious matter to the City of Chandler,” Reed says in her second letter.

She got no response.

“I understand from your staff that sound attenuation has been completed but the noise has not been reduced according to our residents,” Reed says in her third certified letter. “This is evident as my Police Department has continued to log complaints from residents over the past year. To make matters worse, your company began doing repairs that created additional noise from the site from your generators in January 2019 without anyone from your company notifying the surrounding residents.”

Late last month, residents gathered to discuss their concerns with the mayor and council, and when CyrusOne was asked by the city if it would like to send a representative to address the concerns, the company declined.

“Please understand that this action by CyrusOne has continued to create additional angst among our residents,” Reed said.

Reed also again reiterated that CyrusOne is likely in violation of local sound ordinances.

A continual whine

The noise that has so many residents upset which in turn is causing tension between the city and CyrusOne comes from the center’s cooling structures.

The giant AC units that cool the servers, which hold mostly financial data from Fortune 1000 companies, creates a loud whine which can be heard for miles.

The noise isn’t always constant, but Diepenbrock said the sound is at its peak between 4 p.m. and 10 p.m.

During the summer months, the sound is even worse, residents say.

The whine has even caused some residents to consider moving, Diepenbrock said, but now they’re concerned they’ll have to disclose the issue when trying to sell, which will likely hurt their home values.

Diepenbrock, who has lived in the area for 25 years, said when the facility first came, he was excited because it was proof that the city he loves was growing. But now he looks at the buildings with disdain.

“That’s not to say that every data center that goes in is going to egregiously impact the population,” Diepenbrock said, referencing another data center nearby that has high sound walls that block any issues. “The question is, is this CyrusOne data center an exception to the rule, and what safeguards are in place to stop that?”

CyrusOne is not the only company to run into the issue of its data centers creating too much noise.

A data center for bitcoin in Montana has received numerous complaints about the sounds it creates, and some locals even accused the sound of causing local hummingbirds to leave the area.

In North Carolina, a Facebook data center near a small rural community riled local residents.

Data centers have also become controversial due to their use of water.

A Google data center in California has admitted to using 4 million gallons of surface water every day and has been petitioning to be able to use more.

Mesnard’s bill barely made it out of the Senate on a 16-14 vote, and later was approved on a party-line vote by the House Ways and Means Committee.

If the bill is approved by the Rules Committee, it will be considered by the full House.