Niagara Falls is Perfectly Positioned To Become a Tech Hub for a Better Future

By Tony Farina

This may come as no surprise to local residents, but the average salary in Niagara Falls, N. Y., is roughly $41,430 per year or less than $20 per hour, placing the city in the lower half of U. S. cities when ranked by average salary. Local government workers make much more but things could change for the less fortunate if the leadership of the strong mayoral-form of government decides to move forward by embracing data center technology and all that it can bring to boost the local economy and help workers earn more.

For now, with eight months of winter to offset tourism growth, tourism is still the big money generator, attracting more than 8 million tourists from around the world spending over $2 billion annually in the region which has a significant impact on the local economy. But even with the tourism attraction, Niagara Falls has still lost 50,000 of population in the last half-century and the city seems on the verge of more economic decline with little private investment in sight, contributing to any kind of city resurgence and relief for those in low-paying jobs.

But there is a way for all that to change for the better. So how can things change after years of a downward spiral that makes the city a poor home for what’s left of the population? Well, perhaps the most appealing change agent for the city, which is uniquely positioned to become a hub for data centers and AI technology, is to take up the proposal from Niagara Falls Redevelopment and Toronto-based partner Urbacon, to build a $1.5 billion Niagara Digital Campus on South End land it owns, and take advantage of its dream location to construct a nine-building data center at no cost to the taxpayers and bring in the high-paying jobs and economic benefits it would create, again all with private investment dollars.

A new report released by NFR by MRB Group, a leading engineering, architecture, and municipal planning company, highlights tax revenue, job creation, and economic spin-off benefits that will be generated by the Niagara Digital Campus data center, including property and sales tax revenues that will accrue to Niagara County, the City of Niagara Falls, and the Niagara Falls City School District, and the State of New York.

20 Years of Tax Revenue by EntityNew property, gross receipts and sales tax revenues including property taxes to be paid on improvements to the site, as well as sales and gross receipt taxes associated with the project’s energy use.

Over 20 years, the total additional taxes generated by the project is estimated at more than $414 million. The new MRB study breaks down these tax payments as follows:
–Over a 20-year period, the project will generate approximately $298 million in new property, sales and gross tax receipts to the City of Niagara Fallsmand the Niagara Falls School District.
— Niagara County will receive an estimated $54 million in new property and sales tax revenue.
–New York State will also receive approximately $53 million in sales tax revenues from the project’s usage.

 

What does that impact, as calculated by MRB: property tax savings to a “typical” owner of an average-priced single-family home will be approximately $14,503 over 20 years, or approximately $730 per year defined as revenues that the city and the school district otherwise would have to collect via their respective tax levies.

 

As to employment, according to the report, over the course of 20 years the Niagara Digital Data Center Campus will support 19,238 job-years (which is inclusive of construction jobs, permanent jobs, and indirect jobs), $166 billion in earnings. This equates to average of 962 jobs with $83 million in earnings each year.

 

“This report confirms everything that we have said since the beginning: the Data Center at the Niagara Falls Digital Campus is the best investment the city can make, one that will create technology jobs, tax revenues, and prosperity for generations to come, “said Roger Trevino, executive vice president of Niagara Falls Redevelopment (NFR).

 

Trevino states that NFR and their partners at Urbacon “are ready to begin today, and look forward to working with the City to make this project a reality.” The MRB study, according to Michael N’dolo, national director of economic development and services at MRB Group, said of the recently released study:

“The benefits to the community are unquestionable, and we hope our work furthers the understanding of the tax revenues, job creation and other economic benefits that will accrue to the people of Niagara Falls as a result of the Data Center at Niagara Digital Campus. MRB Group has worked on many local projects including the
Comprehensive Economic Development Strategy for Erie County and the Finger Lakes Regional Economic Development Council’s most recent economic development strategy, and an advanced Industry Clusters Study for Empire State Development. A highly respected business in this region.

The other significant source of sales tax revenue for the Project will be the sales taxes generated from the Project’s energy use. MRB Group was provided an estimate prepared by a third-party energy consultant of the annual energy consumption of the Project, which we show on a per building basis.

Each building will consume an estimated 120,960 MWh of electricity that will result in an energy bill of $9.4 million per building per year.

Applying the State sales tax of 4%, the State will receive approximately $375,690 in sales tax for each building. Locally, the City receives an additional 4% in sales tax on utilities and 1% on gross receipts tax. The dollar amounts of these revenues are $375,690 and $93,922 respectively.

The School District also imposes an additional 3% sales tax on utilities which totals $281,767. In total, each building will generate $1.1 million in sales and gross receipts tax revenue for the ATJs due to energy consumption.

Facts support the data center move with abundant, renewable power on tap from Niagara Falls which is one of the most sustainable and cost-effective sources of electricity in North America. Data centers are energy hungry and they require consistent, high capacity power and that makes Niagara Falls a dream location for tech infrastructure. The region’s naturally cooler temperatures reduce the need for mechanical cooling systems, which are a major operating cost for data centers.

Dennis Elsenbeck, formerly of National Grid and now a consultant to the Niagara Digital Campus project, said:

“In addition to the tax revenues generated from sale of electricity to the data center, the 24/7 power use will significantly broaden the base of ratepayers in the city. In addition, NFR and Urbacon will spend tens of millions on a new substation and upgrades to transmission lines. All of this should exert downward pressure on future electrical rates.”

Also, Niagara Falls has lots of underutilized industrial zones and large warehouse-style facilities which are ideal for conversion into data centers. Revitalizing these areas could bring jobs and tax revenue without heavy traffic pollution. Also the city is close to U. S. and Canadian tech corridors and provides access to cross-border fiber networks and redundant connectivity options that makes the region attractive for companies looking for reliable, low-latency communication infrastructure.

With investment, local schools and colleges could train a new generation of tech workers, from data center technicians to AI researchers. This could help reverse brain drain and bring high-paying jobs to the area which badly needs them to provide a better life for residents.

Niagara Falls could rebrand itself from a tourist town to a clean-tech and AI innovation hub in a city where over a century ago, Nikola Tesla and George Westinghouse used the power of the Falls to electrify cities—and change the world. And today’s uniquely positioned hub would be within reach of Buffalo, Toronto, and Rochester, connecting to fiber and international communication routes.

It is all there for Niagara Falls to jump on the tech movement in the perfect location as I have mentioned above. It would provide so much hope for the future where at the current pace, the downward spiral is continuing unabated by local investment and leadership.

In the short term, the gains would be site development and construction jobs, new business partnerships and tax revenue, and public-private investment opportunities.

It is all there for the taking if city leaders would only see it and respond to the proposal from NFR and Ubacon and take a real hard look at how much it would mean to so many who currently live in the slowly dying tourist town that lives for four months a year and shrivels up the rest of the year in the winter cold.

Let me point out that the data center proposal from NFR and Urbacon would be expected to create 500-plus high paying jobs, significantly more than the mayor’s proposed Centennial Park proposal which is unfunded with no major tenant.

The opportunity for a better future for Niagara Falls is there. The city must look at the data center proposal and all it would mean for so many in a city with low-paying jobs and little hope for a better tomorrow.

The time to act is now!