City to continue discussions with data center developer

Discussions between the city of Graham and a data center developer will continue as both sides negotiate and continue work toward a project development agreement for future city council consideration.

The Graham City Council met Thursday, Dec. 18 and authorized City Manager Eric Garretty to engage with representatives of Stream Data Centers and Headwaters Site Development regarding  the Project Saltworks data center. 

The data center proposed on 867 acres of land between FM 61 and FM 209. 

The project will support up to 15 data center buildings, substations and on-site infrastructure that the company said will be set back from property lines and local residences.

Stream Data Centers Chief Development Officer and Headwaters Senior VP of Development Oisín Ó Murchú said earlier this month that all available taxing entities should benefit from the added taxable value from the proposed project.

“Everybody out here should benefit from this development,” Murchú said. “We didn’t talk about annexing (with the city of Graham). We talked about a development agreement with impact fees, where they would extend water service and sewer service to the property and we would enter into a development agreement that would have impact fees for municipal services.”

Councilmember Jeff Dickinson said that the city does not have the authority under state law to deny any industry from having a sewer tap, which would be requested for the project. 

Dickinson said the data center is not within the city limits so the city currently has no jurisdiction over negotiations. He said the city needs to meet with the developer to see what they are requesting so they can negotiate to see how the city can benefit.

“We don’t have a proposal from them. The only way we see any of their intent is to authorize (Garretty) to at least continue on the due diligence part, so that we can see some type of proposal so then we know where to negotiate from,” Dickinson said. “But without any information at all, the done deal is going to be done by their own methods and their own standards, and we’re going to have no say at all in it.” 

The project is in the service area of Fort Belknap Water Supply Corporation (FBWSC), which is a wholesale customer of the city of Graham. FBWSC has an agreement with the city to receive 28 million gallons of water per month based on the elevation of Lake Graham.

The city currently draws around one billion gallons of water per year from Lake Graham and Lake Eddleman for its city customers and wholesale customers. Fort Belknap’s annual contract allows for an allocation of 335 million gallons per year.

“We don’t have the right to sell water to them, (that’s) Fort Belknap. Yes, we do have sewer. But, where does it go? What’s the extent of it? They have to get that information from us, and that’s what Eric (Garretty) is basically asking us to give him the authority to continue those conversations on,” Dickinson said.

Before the consideration of the agenda item, several Young County residents spoke out on the data center during the public comment section of the meeting.

Several comments were made regarding the city manager’s opinion on the project and that the city needed additional guidance on negotiations.

“My personal and professional position on the issue of a data center in Young County is necessarily neutral. I am neither for nor against the data center project, and it’s not my role to be for or against the data center project,” Garretty said. “The ultimate decision regarding any agreement with the data center is the responsibility of the council.”

The city manager said both him and Assistant City Manager Melinda Brown have discussions regarding economic development projects and draft economic development agreements.

“I think it would be in the best interest of the city to formally authorize me to continue these due diligence activities and enable city staff to potentially draft a proposed development agreement,” Garretty said.

He clarified that “due diligence” included receiving questions about information publicly available such as water and sewer availability and capacity and potential economic development programs available from the city.

The city manager said he wanted council approval to continue his efforts with the developers after seeing concern with opposition to the proposed development.

“This item does not give Eric (Garretty) the ability to negotiate any contract or development agreement with the data center, it is simply allowing him to continue to exchange back and forth with them to get information to them that they request is publicly available, and to receive from them what they are wanting from the city of Graham,” Mayor Alex Heartfield said. “Anything that is decided in the development agreement will come before the city council.”

Councilmember Jack Little echoed these sentiments and said a decision would not be made without council approval, especially for a project of this scale.

“This is big business, and this is serious business. From where I’m at, I will be pushing for... (finding out) what’s going to happen now, what’s going to be happening in five years and what’s going to happen in 10 years, because we don’t know,” Little said. “…We will be reaching out trying to find somebody that can help us with that matter.”

Graham resident Phil Denny, who lives at the Graham Country Club, said he wants safeguards in place for those that live at Spivey Hill, the Graham Country Club and Lake Graham. 

“I’m worried about the construction part. We already have rock trucks coming from the Graford Highway... (and) most of them are county trucks, some of them are private. They haul those rock loads as far as Seymour,” Denny said. “The amount of traffic that I think is going to increase is going to be tremendous coming down Elm Street, FM 209 and FM 61.”

In the previous meeting of the city council, the developers of the project referred to the project as a “done deal” after being asked by Little. Young County resident Gabe Pratt said that is why the city needs to do what it can to benefit the community.

“When (they) said it was a done deal from their perspective, that means that they are willing to go ahead with this no matter what. So put the screws to them. ...Take them for everything they’ve got,” Pratt said. “If the county isn’t going to do anything, y’all step up and make them pay for it. Make them pay for all of this. Make us get a good deal out of this.”