Mar 6
2025
Mega-subsidy deal for data center
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With subsidies totaling $3.9 million per job, the Genesee County Economic Development Center gave the green light Thursday to a massive data center project to locate at its STAMP industrial park.
The industrial development agency’s board of directors unanimously approved a proposal by STREAM U.S. Data Centers to construct a 1.2 million square foot data center at the rural business park north of Batavia. The firm will purchase nearly 60 acres of STAMP’s more than 1,200 acre footprint and build a server farm the size of 21 football fields.
The subsidy package totals $472 million, primarily sales tax exemptions on computer equipment. The package also includes an abatement on mortgage taxes.
The project stands to reap additional subsidies, including state tax credits and low-cost hydropower from the New York Power Authority, although it has yet to apply for those benefits.
STREAM said the data center would create 122 jobs that pay between $73,000 and $140,000 annually.
The company will pay $128 million over 20 years to Genesee County, the Town of Alabama and the Alabama-Oakfield Central School District. In addition, STREAM will pay $2 million per year — or around $40 million total — to the local fire district and municipalities. The payments will help offset the cost of a $150 million county water project.
Mark Masse, president and CEO of the IDA, said the payments “could go a long way towards covering substantial amounts of the shortfall” for the county’s water project.
The IDA stands to earn a substantial fee from the deal — between $47 million and $79 million. IDA spokesperson Jim Krencik said the agency hadn’t yet agreed to a final fee with STREAM. The agency’s projects generated $10.3 million in fees last year.
In a statement, Krencik argued that the project was a “win-win” for Genesee County because STREAM wouldn’t locate at STAMP without the subsidies.
“There are no lost revenues as projects of this scale would not happen without incentives,” he said. “Without a project, there are no revenues, there are no jobs and there is no investment.”
The fee and large subsidy package has caused some watchdogs to question the wisdom of the deal.
“This cuts to the basic question in all these deals which is: Whose interest is the IDA serving?,” said John Kaehny, executive director of the good government group Reinvent Albany.
“Are they serving the interest of the taxpayers of Genesee County or are they serving themselves?”
Donate to support our nonprofit newsroomSTREAM has said it will lease most or all of the data center to a single company and is “currently engaged” with a Fortune 50 firm. STREAM would not name the company, but the list includes some of the largest technology companies in the world, including Amazon, Apple, Alphabet and Microsoft. A company spokesperson did not respond to a request for comment.
The project is slated to cost STREAM $6.32 billion. Additional costs include $17.8 million to purchase the 59 acres of land for the project and $50 million to complete construction of the industrial park’s electric substation.
The approval of the data center came in the face of staunch opposition to the project by residents, environmental advocates and members of the Tonawanda Seneca Nation, whose territory borders the STAMP site.
IDA officials Wednesday morning said they knew the Nation opposed the project and had attempted to meet with them but were unable to do so. An attorney for the Nation said leaders wanted a full set of documentation about the project’s environmental impact before meeting and that the IDA didn’t share that information until Wednesday afternoon.
The Nation cited that concern in a letter to IDA’s board of directors on Thursday and asked the agency to hold off on a vote on STREAM’s project. It did not.
“We cannot begin to understand the potential impacts of [the data center] without detailed project information and we did not receive this information until yesterday,” Chief Roger Hill wrote in the letter. “In the information previously provided to the Nation, we see no analysis of impacts of noise, odors, light and traffic from [the project] on our treaty-protected cultural activities.”
At Thursday’s meeting, Masse said the letter did not “raise any new issues.”
Alex Page, one of the Nation’s lawyers, said noise and vibrations from the data center could disturb the neighboring forest, called the Big Woods. Nation members have said they view an industrial park on the border of their territory as an existential threat to their rural, traditional way of life.
“The Nation is really concerned there could be significant impacts on subsistence hunting and on hunting and gathering for cultural purposes, particularly in the nation’s Big Woods, which are right up next to the stamp site,” Page said.
Residents, advocates and Tonawanda Seneca Nation members all voiced opposition to any data center project at an hours-long hearing last month.
“This will not be beneficial to anyone in the town,” Katie Rivers, who lives near the STAMP site, said. She said she worried about “constant ringing, 24/7” from a data center.
“It’s just very harmful to everyone and the wildlife. It’s like you’ve all been bamboozled.”
Masse, the IDA president, said Wednesday that noise will be limited to 65 decibels, roughly equivalent to the noise of an office. Page questioned whether that would prove true.
STREAM will be the third company to locate at STAMP.
The first, Plug Power, has paused construction on its hydrogen production plant due to the firm’s rocky finances. The company, drawn to STAMP with subsidies totaling $4 million per job, has been late two years in a row paying its property taxes.
Town of Alabama Supervisor Robert Crossen told Investigative Post the town board issued the company a letter of default last month but that Plug Power paid the town the following day.
Subsidies for STAMP’s other tenant, Edwards Vacuum, were more modest.
The IDA’s deal with STREAM ties back to Plug Power’s struggles.
The company was supposed to pay to construct an electric substation to serve the industrial park. Plug Power would then use the electricity to turn water into hydrogen gas and lease the balance of the power to STAMP’s other tenants. The company’s financial struggles — it issued a “going concern” to investors at the end of 2023 — put that work on hold.
The IDA began entertaining data center companies who offered to complete the substation work. Three submitted proposals.
Data centers use large amounts of electricity and water and require few workers, making them less attractive than manufacturing tenants. Masse on Wednesday said the IDA selected STREAM’s proposal in part because it had the smallest environmental impact. It would use far less water and involve the storage of less diesel fuel than the other competing projects.
Choosing a company that minimized its fuel storage was “directly responsive to the public comment we received expressing concern over spill concerns and fire safety,” Masse said at the IDA’s committee meeting Wednesday.
“Initially I was skeptical of the data center,” IDA board member Marianne Clattenburg said Wednesday. “I like the fact we’re choosing the one that has the least environmental impact. The benefits to the community are substantial.”
