Digital Campus Would Be a Lottery Win for Taxpayers

By Tony Farina

The real measure of the economic benefits that would accrue to the city of Niagara Falls across the board with the development of a nine-building, $1.5 billion South End digital campus as proposed by Niagara Falls Redevelopment is now becoming much clearer and even beyond the wildest expectations one could imagine.  The numbers are staggering and the benefits mind boggling.

According to a former National Grid expert, as reported in the Niagara Gazette, the tax gains for the hard-pressed taxpayers of Niagara Falls, and that includes the school district, are just almost overwhelming in every respect.  We’ll attempt here to give it meaning so that people can understand what benefits would be accrued if the project comes to life.  Taxpayers would be the real winners.

And we should note that NFR’s application to establish a Negotiated Planned Development District for the digital campus has been presented to the city for the South End parcel that Mayor Restaino has targeted for his presently unfunded events center and which has been the subject of eminent domain proceedings that even if totally successful would cost the city millions to acquire with the benefits, to put it kindly, unrecognizable and certainly quite pale in comparison with the digital campus windfall.  NFR’s application, according to the mayor, is in the hands of city planners and is being “reviewed.”

That review, according to a very recent guest view article in the Gazette by former National Grid executive Dennis Eisenbeck, should reveal the entire scope of benefits the digital campus would bring like more than $3 – $5 million annually to Niagara Falls before increases in property taxes, new jobs, and other economic development benefits.  That includes 500 jobs when fully operational with expected annual wages to exceed $29 million,

And the overall economic spinoff benefits, according to Eisenbeck, are estimated to exceed $850 million during phased construction, and $250 million annually, with more than 1,700 permanent jobs created in support and ancillary businesses.

As reported in many places, the need for data centers due to artificial intelligence revolutions (AI), particularly in cooler climates with access to water and power, is incredibly high and Niagara Falls fits the bill perfectly.  The cataract city has what is needed to make it work.

And in addition to the property taxes and all the economic benefits that would be created when the digital campus is completed, according to Eisenbeck you can add sales tax revenue from the sale of electricity to Niagara Digital campus.  That will amount to millions more each year in revenues to the City of Niagara Falls and millions more to New York State and other local government bodies.  Just staggering and yes, mind-boggling numbers.

Eisenbeck, a consultant to the project, says according to his analysis, “a fully built-out Digital Campus will have an electric capacity of 140 megawatts, running 24 hours a day, seven days a week.  In New York State, energy bills are taxed at the state, county and city levels.  Based on the data center’s expected power usage, the Niagara Digital Campus will pay energy bills of approximately $5 to $7 million each month–$60 million to $84 million every year.”

At that level, according to expert Eisenbeck, “the total calculated sales tax to New York State, Niagara County, and City of Niagara Falls can be estimated at $400,000 to $600,000 monthly—or $4.8 million to more than $7 million annually. Of that total, the city will receive approximately $250,000 to $400,000 per month, or from $3 million to $5 million annually.  This assumes a 4% pre-emptive tax, plus 1% Gross Receipts (GRT) under the current Utitility Tariff and Tax Law (all of these number are as of 2024, with no knowns subsidies).

Eisenbeck says you can assume at least $3 million in annual sales tax revenue to the City of Niagara Falls before a single dollar in increased property taxes hits city coffers, and before a single employee is paid or a single additional product or service is bought from local business.

Beyond the sales tax, there is more.  Other revenue would come in like additional utility regulatory recovery and subsidies to New York State as well as subsidies under state agency climate change programs and incentives.  These additional charges, according to Eisenbeck, would bring more revenue from electricity use to New York State—and revenues that arguably should remain in Niagara Falls to facilitate the development of the city’s own Climate Change Master Plan—an effort to move business to electric use, integrate EV charging in all city-owned parking facilities, and to develop an affordable home strategy for low-to-moderate income residents.   In total, under current estimates that could arguably bring more than $9 million more under city control annually.

The new sales tax revenues and the huge spinoff economic benefits when the digital campus is completed are an incredible opportunity for a city that has long missed the boat on other golden opportunities and this one is right there for the taking.  And it won’t cost taxpayers to build.  NFR and its Toronto-based partner Urbacon are paying the tab to deliver and almost overwhelming benefit to the city, school district, New York State, and all the taxpayers in that group.

One can only hope that city planners and Mayor Restaino take a close look at the numbers that are projected for the Niagara Digital Campus and get on board with a project with almost incredible promise for all.  The opportunity is there, and a better future for all is at hand.