$7.5 million for data center approved
The controversial proposal to build a data center and natural gas power plant in Middletown moved one step closer to breaking ground Wednesday, after the state approved a $7.5 million public grant.
At the Delaware Economic Development Office headquarters in Dover, the state Infrastructure Investment Committee heard from officials from Cirrus Delaware LLC Wednesday, as well as members of the public who voiced concern about taxpayer funds flowing to a company whose financiers are unknown. But the money comes with conditions.
Cirrus wants to build an estimated $350 million facility in Middletown's Westown development for a data center, which would house massive amounts of computer information, and a natural gas electricity generator.
The committee voted in favor of transferring taxpayer dollars to Cirrus, but the money will be released only after the company receives an approved environmental permit from the Delaware Department of Natural Resources and Environmental Control and provides information to the state about who will be behind the funding and ultimate operation of the facility.
“It’s reasonable to have heartburn about something when there appears to be a little bit of secrecy,” said Sen. Dave Sokola, D-Newark, a committee member who voted to approve the grant. “I think the public has a right to know. It’s public funds that’s going into a project.”
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In addition to Sokola, the Infrastructure Investment Committee is made up DEDO Director Bernice Whaley, Jennifer Cohan, secretary of the Delaware Department of Transportation, Michael Ratchford director of government relations at W.L. Gore & Associates, and Rep. Quinton Johnson, D-Middletown. The committee is charged with reviewing grants that are passed by state lawmakers to "provide economic assistance for renovation, construction or any other type of improvements to roads, utilities and related infrastructure."
All members voted to approve the state grant money – which would fund the construction of electrical and fiber-optic upgrades for the facility – except for Johnson, who abstained. The Middletown Democrat publicly backed the multi-million dollar proposal when it was passed by lawmakers in June of last year.
DNREC is currently reviewing the proposal for the 228,000-square-foot complex's 52.5 megawatt natural gas generator. Officials from Cirrus say the power plant is necessary for the facility as a backup power supply in case the electrical grid goes down, and also to make the project economically viable.
The project would provide 117 jobs after its third year of existence and could create 750 immediate construction jobs, officials said.
Opponents of the projects, mostly Middletown residents, argue the natural gas plant will emit an unhealthy amount of carbon dioxide and lower property values.
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Dennis Silicato, a partner at Cirrus Delaware, said the $7.5 million is a safe investment for the public because even if the company were to fail, the $6.5 million in electrical power line and substation upgrades and $1 million in fiber-optic cables that lead to the facility would remain in place.
“Whether this project actually happens or not, if the infrastructure is put in the ground, it benefits the town of Middletown and the entire state,” he said in an interview after the meeting.
Silicato declined to offer details about possible investors, except to say he has someone in mind. The state funds, while helpful, are not critical to the project, he said.
“At this point the people that we’re dealing with do not wish us to divulge (information). They’re major corporations,” Silicato said.
Silicato and other company officials also stressed to committee members that Cirrus is a separate entity from the group that attempted to build a data center and power plant in Newark three years ago.
The University of Delaware terminated a lease with The Data Center LLC in 2014, after its plans for a data-center complex in Newark sparked a debate over green energy and economic development. After months of study, an internal working group unanimously recommended that university leaders not approve the facility and its 279-megawatt power plant for construction at the former Chrysler site, now UD's Science Technology & Advanced Research Campus.
At Wednesday's meeting, Nick Wasileski, president for the Delaware Coalition for Open Government, said the Newark experience should raise a red flag for other major projects.
“Like (The Data Center LLC), the investors and the sources of funding for this project are presently proprietary,” he said. “This is all well and good except for one issue: When our tax dollars help fund private enterprise (we) believe taxpayers have a right to know who is receiving their money.”
Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.