The data center hustle

Data centers becoming dominant force in Mesa," reads the headline on a recent East Valley Tribune story. The lede: "It may never rival Silicon Valley, but Mesa is fast becoming Data Center Alley." 

This "Alley" isn't transforming struggling west Mesa and it's nowhere near the light-rail line. Instead, it's centered on the "Elliott Avenue Technology Corridor" in far southeast Mesa, the location of agriculture, desert, and the former Williams Air Force Base. Now, with abundant concrete, gravel, and asphalt, it will expand the increasingly dangerous Phoenix urban heat island. The "Corridor" is entirely car dependent.

Data centers are lowest on the ladder of the tech economy: necessary, but bringing few jobs — much less high-end jobs — and several headaches. This is why they are usually found in rural areas desperate to replace their lost millwork, manufacturing, or railroad jobs. States and localities shell out huge incentives and disappointment follows.

But to see the proliferation of data centers in a city the size of Mesa (518,000 in 2019), in the 10th most populous metropolitan area in the nation, is curious.

A Google data center for Mesa announced in 2019, lured with tax breaks, would create few permanent jobs. Even the much-hyped Apple "global command center" is merely a big data center, promising only 150 full-time positions.

By comparison, Amazon's headquarters in downtown Seattle holds more than 50,000 high-paid executive and software engineer jobs. At nearby Redmond, Microsoft has 54,000 employees at its headquarters. Every major Big Tech firm from Silicon Valley has major operations there (no data centers). This is the headwaters of high tech.

Another problem with Data Center Alley: These massive server farms are water hogs. Elsewhere, they contribute to climate change because of their enormous appetite for electricity. Maybe Palo Verde Nuclear Generating Station helps Mesa here. It's only built upwind of the nation's fifth most populous city.

And no evidence has emerged that data centers are a gateway to more advanced tech work. Metro Phoenix got nowhere in its bid for Amazon HQ2. Any "exodus" from the Bay Area has benefited an established center of quality, Austin. Google is building a transformative new campus in downtown San Jose, close to light rail and commuter trains to San Francisco. The best talent digs great cities.

Read more closely and it's clear that Mesa's "technology corridor" is yet another Arizona real-estate hustle, dependent on cheap farmland and tilt-up buildings, plus a heapin' helping of tax breaks — in a state that ranks second from last in per-student funding.

"It may never rival Silicon Valley...."  It couldn't. Silicon Valley is sui generis, with no rival in the world. The former Valley of Heart's Delight became the world leader in high tech because of proximity to world-class universities and talent, the emergence of top companies, serial entrepreneurs, the greatest concentration of angel and venture capital on the planet, and a history of innovation that dates back to "the traitorous eight" who founded such pillars as Intel.

Sunshine, the real-estate Ponzi scheme, and a flat tax leaves you in a blind alley.

 

 

 

 

 

 

Comments

[nobody]

Another issue with data centers is that upwards of half the electrical power used by a DC goes to cooling systems that are needed to keep the racks from melting down and catching fire. Naturally, the cooling needed is proportional to the outdoor temperature.

All else being equal, a datacenter in Arizona will use more energy than one located in a cooler climate.

From energy efficiency and emissions perspectives, governments should not be encouraging the tech sector to build these facilities in hot climates.

It's astounding that the 'datacenters create local jobs, give us tax breaks' scam keeps working. It's not a secret that most IT work on this scale is done remotely, by workers living in cities where being of the wrong ethnicity isn't grounds for getting lynched.

[Dave Parish]

Traditionally the South Bay has been spun on the riches created by successive waves of innovation. Chips, computers, software, bio as clean technology, electric cars to smart sciences. The HP dual and William Shockly leading the 1956 hierarchy created an unshakable foundation.

When I abandoned the region 22 years ago the motto of real estate was drive further out of town, until you qualify. That 90 minute commute, for my skill level, wasn't reasonable. Besides, traffic was like a drain, even then. Clogged.

[Cal Lash]

Now you know why Mesa spent 90 million on a new water pipe line.
Arizona is again the fastest growing state.
Years ago i seem to recall
Floating icebergs?
"Manunkind" is of no benefit to earth.

[Stephanie Oliver]

Not to tout my alma mater but Stanford can be credited with the origins of HP and the growth of Silicon Valley.

[Cal Lash]

Growth is a postive?
I bought a new Earth flag.

[Bobson Dugnutt]

Mesa might then follow data centers up with being a haven for bitcoin mining.

It's an environmental catastrophe in the making. Iran and China had tolerated the activity, but are taking moves to stamp out bitcoin mining.

If you don't understand cryptocurrencies or their logic, a Twitter user named @Theophite explains it pithily: "imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin."

It was copied from a longform essay by Ketan Joshi, a writer and journalist.

https://ketanjoshi.co/2021/03/11/bitcoin-is-a-mouth-hungry-for-fossil-fuels/

The piece shows how bitcoin mining is kneecapping goals to reduce climate change by a dark triad of laser-eyed prospectors, fossil fuel traders and outlaw libertarians.

[DoggieCombover]

The most succinct, spot on explanation ever...

[Cal Lash]

Bobdug, your post confirms my suspicions that humans are the gods worse mistakes.

[Chuck Albertson]

The "water hog" piece you linked to also notes that "Redale [whoever that is] will not use the Colorado river [water], instead it will have to acquire water rights and transfer them to the City of Mesa."

Good luck with that.

[Rich Weinroth]

Nothing is going to change in Arizona, or the United States for that matter, until we have a crisis. After the real estate collapse in 2008, I thought Arizona might finally pursue a path of sustainable development with more focus on high paying jobs instead of the usual build real estate stuff so more people can move here to build real estate stuff and create more low paying jobs. But even after almost 40 years in Phoenix, I still had a bit of naivety. What a sucker I am. We are back at it again and nothing is going to change until we literally run out of water or a major power failure kills a few thousand people in the heat of the summer. I'm waiting for the City of Phoenix Urban Heat Island/Tree and Shade Subcommittee to issue another worthless press release regarding actions that should have been taken decades ago and which will never occur.

[Cal Lash]

The Math:
https://passyworldofmathematics.com/exponential-population-growth/#:~:text=Exponential%20growth%20involves%20increases%20starting%20off%20as%20reasonably,plus%20people%20who%20currently%20live%20in%20our%20world.
and just keep ridiculing this old fool:
https://en.wikipedia.org/wiki/Thomas_Robert_Malthus

[Cal Lash]

But I think Passy is wrong.
I'm sticking with Thomas
and advocating a return to
Hunter/gathering nomadic ways

[Cal Lash]

And the just keep coming to the
"Valley of the Sun."
From Michigan and Minnesota and Mexico and California...............
"however they get around, all animals move for the same reasons: to eat, mate, and escape from predators. That’s the evolutionary function of mobility."
https://www.newyorker.com/magazine/2021/04/05/why-animals-dont-get-lost?utm_source=onsite-share&utm_medium=email&utm_campaign=onsite-share&utm_brand=the-new-yorker

[Cal Lash]

Why you should fear sink holes.
If you read the buissnes journals and city development plans and the dreams of developers of master planned subdivisions you will know that Arizona in less than 10 years will likely add 4 million more folks to the diminishing water table.
Earths revenge will be to swallow your houses.

[Cal Lash]

Float your boat?
https://apnews.com/article/california-droughts-government-and-politics-science-business-76709d5854394905e0f46880ed6dab9c?utm_source=Sailthru&utm_medium=email&utm_campaign=June3_MorningWire&utm_term=Morning%20Wire%20Subscribers

[AZ Independent]

Data Centers follow cheap electricity. So they proliferate along the Columbia or Colorado river watersheds where cheap federal hydropower exists. PV nuclear is icing during drought. Remember back in 90s & oughts when Congress wanted to privatize federal power marketing entities? Cheap power fuels the real estate growth as well.

[Cal Lash]

Regarding Arizona putsch column

https://flux.community/matthew-sheffield/2021/05/liz-cheney-epistemic-collapse-conservatism

[Roger]

Arizona is now flat out mining groundwater and will lie cheat and steal to keep the game going.

The state was always an extractive state and now we get to see our most precious resource given away for almost nothing when it is beyond obvious that we are in serious trouble going forward.

I confronted Phoenix water department head over this a few years ago and she rebuffed me by saying 'maybe we shouldn't have so many data centers here then' as a backhanded comment to my suggestion of a complete change in our culture here in the desert. I agreed. And was ignored. lol

[Bobson Dugnutt]

One for the Front Page: Will Wilkinson's Model Citizen Substack newsletter addresses the external costs of nondevelopment.

https://modelcitizen.substack.com/p/nimbyism-and-the-externalities-of

Zoning is not a local issue. It has macroeconomic consequences.

Wilkinson: Crazy regional variation in housing costs undermines the effectiveness of federal monetary and fiscal policy, compounding the massive macroeconomic cost of our systemic, zoning-driven misallocation of labor. Moreover, restrictive zoning in America’s superstar cities effectively subsidizes the growth of hotter, more sprawling (but less productive) runner-up cities, such as Phoenix and Austin, increasing greenhouse gas emissions and climate risk thanks to their heavy reliance on air conditioners and cars.