About Phil Santer
Phil Santer is the Chief Operating Officer for Ann Arbor SPARK, overseeing day-to-day operations and leading execution of the organization’s strategic plan. Phil has more than 15 years of experience in economic development at both the practitioner and policy levels. Before joining SPARK, he held roles at the Michigan Economic Development Corporation and at a research center at George Mason University in Washington, DC.
He is a graduate of James Madison College at Michigan State University and holds an MBA from Wayne State University. Phil is an Economic Development Financial Professional certified by the National Development Council and was named to DCI’s “40 Under 40” in economic development. He serves on the Boards of Lake Trust Credit Union, Michigan Works! Southeast, and Destination Ann Arbor.
Resources
Related Digital Saline Township Data Center (The Barn)
Transcription
David Fair: This is 89.1 WEMU, and today, we return to the controversial and sometimes polarizing matter of data centers. I'm David Fair, and this is Issues of the Environment. We have, over the last year, spent a good deal of time looking at the real and the potential environmental impacts of data centers. Today, we're going to look at that in context of the planned and potential economic impacts in our community. And here to help us gain a better understanding of that is Phil Santer. He is the Chief Operating Officer for Ann Arbor SPARK, and thank you for making time for us! I appreciate it!
Phil Santer: Thank you for having me!
David Fair: I was reading the mission of Ann Arbor SPARK, and I quote here. It says, "Ann Arbor SPARK will advance the economy of the Ann Arbor region by establishing it as a desired place for innovation, business, location and growth and for talented people to live and work. The Ann Arbor region will be recognized for its academic, business and community resources and its collaborative culture." So, I can feel it in there, but how does that described mission incorporate responsible environmental stewardship in its service outlook?
Phil Santer: I think that's a pretty core part of the work actually. So, we went through a couple of years ago and really tried to refine kind of what our strategic plan and purpose was going to be as an economic development organization trying to serve all of Washtenaw County and came up with this idea of prosperity in service of everyone, basically. So, we want to ensure that we're a prosperous community, and it's in service with us all. And a key part of that is ensuring that we were focused on sustainability for the entire community. I think as it relates to the broader piece of what we're trying to do here is ensure that Washtenaw County is a home for essentially 21st century infrastructure and being able to ensure that we have the access to resources that we need to ensure the future of what our community has been known for, which, for the most part over the past couple decades, has really been focused around professional services, around technology-based jobs, and what that could mean for the future.
David Fair: The project in Saline Township is massive. A $7 billion hyperscale data center that Governor Gretchen Whitmer has characterized as the single largest, one-time investment in state history. The project is being built out by Related Digital for Oracle, its customer OpenAI, and Related Digital calls the project "The Barn." Phil, was your reaction when this project was first announced by Governor Whitmer one of positivity or hesitation?
Phil Santer: I think of it as being a pretty significant announcement to have the largest investment in the state of Michigan in our backyard. And I think about this not only in terms of what the actual opportunity is from the planned use, but what can we sort of build off the backs of the opportunities that we have here. So, when I think about this, in particular from the economic benefits, and I think about this particular project, certainly, there's investments that have been announced around the fire department and around the investments that are going to be made for farmland preservation and just for overall community impact fund. But I think about it. What are the lasting impacts that we can have from the property taxes that are going to be driven as part of this investment? And it's not an insignificant number that is going to be put back into public coffers to allow us to continue to make other investments that are going to allow us to make improvements in other parts of our community that we think are important from the goals that we're trying to have, whether that's around sustainability, whether that's health and human services, whether that is around other infrastructure. It's a huge opportunity for us to be able to leverage that in our backyard. So, that was my initial reaction. So, I think about it pragmatically, in terms of saying how can we leverage the investments that are being made in this particular technology to the benefit of our community.
David Fair: This is Issues of the Environment on 89.1 WEMU, and today, we're talking data center impacts with Phil Santer from Ann Arbor SPARK. And as we talk about community impacts, there is the economic component, which we will come back to, but there is the environmental component. And as you well know, there are people that have concerns. A data center of this magnitude can sometimes use up to 5 million gallons of water per day. But there are different kinds of cooling systems in the industry, and Related Digital says it intends to employ what's called a closed-loop, air cooling technology. They say that once the facility is operational, daily water consumption would actually be comparable to a standard office building. Now, I'm sure you're aware of the public skepticism on that point. Do you have confirmation? And are you comfortable with where Related Digital is on this?
Phil Santer: So, that's the stated plan for the project is to use a closed-loop water system. I think if the plan were to shift and change and there were needs to be access to something that hasn't been presented as part of the project, I think that would be publicly available and something that we would all know. I don't have any reason to doubt the current plan as presented in terms of what they're trying to build with the closed-loop water system.
David Fair: The energy drain--that's another point of contention. And Related Digital says it will fund 100% of the energy it takes to run the facility based on Michigan law and in agreement with the Michigan Public Service Commission. The Public Service Commission continues to grant DTE and Consumers Energy significant rate hikes to residential and business customers, and once again, that has led to some public skepticism over who's really going to pay for the additional energy. What do you say to people who bring that point of view to you?
Phil Santer: You know, I think about this in the terms of the broader changes that we've seen in pricing really over the past, however many years that we've seen inflationary adjustments and pricing increases. And to be fair, we haven't had a data center that's been included in our community to date, and energy prices have gone up. So, I think it's really a matter of trying to understand what are the economics of all these things and how do they impact this. You know, I have heard and understand that as a result of having a larger investment in our network, there are fixed costs that need to be applied across the entire service area. And it's important and helpful to have a large customer or a large user that can help spread out or take advantage of some of the economics of scale, if you will, in terms of how that infrastructure is going to actually be applied. I mean, I think the reality is we need to ensure that we have a reliable grid, especially in our background, in our community, present storms included, as it relates to reliable energy infrastructure. And if there are greater ways to be able to apply the cost of those fixed cost improvements across the entire service area, that's something that we should be open to. I also think about the importance that we have in place the ability that our utility partners are going to be moving towards renewable energy by 2040. I think we need to ensure that we're on track with that particular focus, regardless of what happens sort of in the meantime. So, ensuring that we're gonna get to that renewable standard by 2040, I think is a really important thing that we need to be focused on.
David Fair: Well, you mentioned the kinds of investments that will be made in Saline Township and the kind of tax revenue that will be generated. Beyond that, let's talk employment. During this construction phase, we know a good number of jobs are going to be created. But once fully operational, some of those in many of those jobs are going to go away. Typically, data centers do not require a ton of on-site employees to operate. What kind of employment benefit do anticipate from what Related Digital is calling "The Barn?"
Phil Santer: I think we're looking at a few hundred people. I think this is not something that intends to be a major employment driver. I actually think that sort of aligns well with sort of the rural component of this as well, right? This is intended to be in the background infrastructure that is allowing the computational power to happen. And it's not supposed to be a very active employment site. That's the purpose. So, I really see this as sort of an infrastructure opportunity tied in with some really significant public economic benefits that we need to be thinking about, but not necessarily as much of a huge employment driver.
David Fair: Do you have concerns about the impacts on the agricultural part of our economy in Washtenaw County?
Phil Santer: I think from the perspective of looking at it just from the agricultural piece of this particular parcel is not a really big chunk, even of the agricultural use even within Saline Township, for example. So, I think the focus on this being a big shift away from agricultural uses. Certainly, it will be for the parcels that are under development, but I don't see it having a significant impact on the other agricultural uses that are nearby.
David Fair: So, while this is going to be located in Saline Township, we are told that the positive economic impacts will go well beyond the township borders. Where do you expect to see those results to the benefit of the county as a whole?
Phil Santer: It really comes down to a matter of the millages that all of us are paying, in terms of property taxes, are going to be the same things that are applied for this particular project as well. So, I think about this from a county perspective. So recently, we had the State of the County Address, and we were talking about the importance that county government is providing to our community, whether or not that's assisting people that are unhoused or going through health and human services issues, and also sort of the federal funding cliff that we may be facing as it relates to potential investments for that. We need to ensure that we're trying to build our tax base, so that we can try and fill the coffers for those important avenues as well. And this is an avenue. This is a way to do this. We're talking a pretty significant amount of money that's going to go to the county, for example. Another avenue I think about this is from the things like the ISD. So, we recently passed a career and technical education millage. It's trying to ensure that we have a sort of cohesive ecosystem, if you will, from a workforce training perspective. This tax base that we're going to have is now going to be able to fund that particular effort in a really significant way, ensure that we building that pipeline from our students, from our youth, tying them into employment opportunities. So, I think about it where there's opportunities to leverage the economic impact of this into other public places. And we haven't seen an opportunity that's been of this size and scale to be able to do that in our backyard.
David Fair: Well, I really appreciate you taking the time to offer your perspective and add more context to what will be an ongoing community dialog. Thank you so much, Phil!
Phil Santer: I appreciate it! Thank you!
David Fair: That is Phil Santer. He is Chief Operating Officer at Ann Arbor SPARK and has been our guest on Issues of the Environment. For more information on today's conversation, stop by our website at WEMU.org. Issues of the Environment is brought to you every Wednesday in partnership with the Office of the Washtenaw County Water Resources Commissioner. I'm David Fair, and this is your community NPR station, 89.1 WEMU, Ypsilanti.
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