The following are the answers received this afternoon to questions rrspin submitted to county administration Tuesday ahead of that evening’s public information session on the Quiet Data Centers Halifax proposal.
The questions, concerning the economic development agreement with the company, are posted below with rrspin’s questions in bold and only minor editing for typos — Lance Martin
Given that the penalty for failing to create the 50 promised jobs is only $2,500 per job per year — totaling just $125,000 annually against a $250 million project and a $1.7 million land transfer—what economic deterrent actually exists to prevent the developer from operating with little to no local workforce?
First of all, contrary to what you may believe, the County is not able to prevent a company from operating “with little to no local workforce.” The County can only require a company to create and retain a certain number of new full-time jobs in Halifax County. That being said, penalties are generally identified in economic development agreements when incentives (such as incentive grant payments) are actually being provided to the company. Indeed, the law requires those penalties (See G.S. 158-7.1(h)). Here, however, the County is not providing incentives to Project Q. The penalty you have asked about was added as a way to enforce the company’s job creation commitment. The basis for the $2,500 is not calculated as reimbursement for the economic value of a job or lost wages resulting from a shortfall in job creation, retention or wage levels. It is an additional contractual remedy in a transaction where the County did not subsidize the company. The $2,500 figure is higher than some other NC counties impose in a per job penalty.
Why was a flat fee chosen instead of a clawback provision on the land conveyance or infrastructure investments if employment thresholds are not met?
When land is conveyed at less than fair market value, GS 158.7.1(d)(2) requires the County to bind the company to construct the project within a certain time and include clawback provisions if that timeline is not met. Because the company will purchase the land at fair market value (full consideration) – there is nothing to claw back.
Why did the County not require an escrow deposit or earnest money to hold this 251-acre parcel, especially when paired with an unqualified right for the buyer to terminate for any or no reason?
Ongoing discussions with the company continued to move toward purchase of the land.
The company spent considerable funds for electrical load studies to validate the site’s stated electrical power capabilities. In our view, this further substantiated the likelihood of the company’s eventual purchase of the property at the end of its investigations during the review period allowed under the Land Purchase Agreement.
Has the County calculated the opportunity cost of locking up public land for over nine months with zero out-of-pocket holding cost or capital at risk for the buyer?
There was no competing purchaser that the County was required to turn away during that period. Without a credible alternative transaction, any calculation would be hypothetical.
The contract permits both 'mobile and fixed' data center operations. Can officials clarify whether modular container units—such as high-density crypto-mining or containerized GPU clusters—are being considered for this site?
Waiting for an answer from the company.
