Editor’s Note: There has been considerable misinformation spread over the past several months about the proposed Niagara Digital Campus, a state-of-the-art, innovative, $1.48 billion facility planned for downtown Niagara Falls. Urbacon, one of the premier developers of commercial and industrial properties in Canada and the northern United States, has teamed up with Niagara Falls Redevelopment (NFR) to develop a data center and technology hub that will bring thousands of jobs and cutting-edge technological infrastructure to the City of Niagara Falls.
To clear up some of these misconceptions, we recently spoke with Urbacon’s Vice President of Properties and Development, Peter Russell.
Urbacon has over 30 years of experience in the design and construction of data centers and they are a leading wholesale colocation provider, with multiple next generation data centers in a variety of locations.
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Thank you for joining us. What is a Data Center? Some would say, “Well, it’s just a warehouse for computers.” Or that it doesn’t bring many jobs or value to a community. Is this true?
That understates the technology completely, as well as the jobs and vibrancy it brings to a local community.
Yes, there are rows of computer servers that reside in the space, but the facility is incredibly advanced and incredibly robust. It has to be. You need an electrical grid with redundant systems and backup to ensure these servers operate on a 24-hour basis, 365 days of the year. You need networking engineers and technicians to maintain equipment that needs maintenance, and upgrades and replacement. And you need security protocols and management to coordinate the entire operation.
There’s also a misconception that this is somehow similar to bitcoin mining.
Bitcoin mining and data centers share some similarities, but they are very different. Both rely heavily on electrical and mechanical systems, but a major difference is that bitcoin mining is more focused on the input cost vs the output of bitcoin, while data centers are focused on providing reliable and secure services to their customers.
We are offering a mission-critical service for the modern information economy. We need a state-of-the-art facility. Our clients need assurance that the facility is available at all times. The type of facilities we build are, at a minimum, Tier 3 facilities, which means that they’re running 99.9995% of the time. They are always on. And to be always on, you need to have the best of everything. The best design. The best primary power and backup power. The best cooling and humidification, all to meet the service-level agreement you have with your clients. Whatever equipment or infrastructure you put in place, you’ve got another ready for back-up. You need all of these things on a 24-hour basis, 365 days a year.
You appear to have beautiful facilities in Toronto, Montreal, and Richmond Hill. How do you integrate these so well into the community?
Our design has to be of the highest quality, and several of the data centers we’ve built are considered iconic architectural structures. It is all driven by our desire to do good work and also what our clients want. Globally recognized tech companies want prestigious locations. So in each location, we work hard to create facilities that blend in seamlessly – driven by the highest standards in urban planning. Here in Toronto, the TR-1 facility we built for Equinix—a four-story urban data center—is award-winning. In Montreal, the same thing.
But are these facilities noisy?
From the street, you would be hard pressed to hear any noise above the ambient street noise. We aim for a lower level than is mandated by many governments, about 55 decibels. This is about the sound of an electric toothbrush or a dishwasher in someone’s home.
You must understand that noise is another design element for us. We work very hard to eliminate noise at the property line. We model the noise, project what the influence might be, then we adapt the design to mitigate any noise to ensure we’re exceeding mitigation standards. As a result, we’ve never had a complaint and I certainly wouldn’t expect one.
Let’s shift to jobs. There’s a concern that a facility like this just lies there, empty. Tell us about job creation and what to expect.
The projections we put forth last summer at the City’s public hearings were well-documented and real. We estimated about 550 permanent jobs and 5,600 jobs during construction. We didn’t just make these numbers up. They were based on some very prominent studies on job creation and economic development, including those put out by the U.S. Chamber of Commerce Technology Engagement Center and the Northern Virginia Technology Council. These studies are on the Niagara Digital Campus website (niagaradigitalcampus.com). Anyone who has any questions should visit the website and see for themselves.
From Urbacon’s standpoint, we’ll provide the base employment for the facility. For what we’re planning in Niagara Falls, we expect three shifts with dozens of engineers, managers, security and maintenance. We make sure the lights are on, power and cooling are functioning, humidification is at the right level, network and other infrastructure equipment and software is up to date and functioning—all of that is handled by Urbacon—and, again, in shifts, 24/7. We have very complicated lease agreements with our tenants that specify exactly what is needed.
As to the clients, it varies based on the type of user that’s in the facility. It may be a one-tenant facility, or it may be multi-tenant, which means even more employees at the facility. Each tenant has their own offices and secure server area. At our facilities in Richmond Hill, for example, hundreds of people are coming and going each day.
Tell me more about the types of jobs.
Data centers create jobs in several different ways, depending on the size, location, and type of the facility. They create direct jobs for data center staff—such as engineers, technicians, managers, and security personnel. These jobs tend to be high-paying and require specialized skills. But data centers also create indirect jobs for contractors, suppliers, and service providers that support the data center operations. These jobs can include construction workers, electricians, plumbers, landscapers, cleaners, caterers, etc.
Finally, there’s what we call “induced jobs” for local businesses. Local businesses benefit from the increased spending of data center employees and visitors. These jobs can include retailers, restaurants, hotels, entertainment venues, these sorts of things. Given the high number of local colleges and universities—including the State University at Buffalo, Niagara University, and others—and an intelligent local workforce, these numbers suggest a lot of opportunity for residents and the college graduates every region hopes to retain.
So these are jobs for all levels of education and training. But one of the things that brought us to Niagara Falls is that you have an educated, intelligent workforce. Something like 40% of residents in your area have, at a minimum, a college education. And I forget the exact number, but I believe it was about 20% with advanced degrees.
All industries right now are confronting the same issue: a labor shortage in skilled trades, right? Having access to that kind of workforce is an enormously positive thing for us.
But the Mayor of Niagara Falls said he visited an Urbacon facility and it felt empty.
For security reasons, we showed the Mayor a new facility that hadn’t been commissioned yet. We were simulating operations and testing equipment, but the facility wasn’t operational. And there is a reason for that. We can’t be running tours through highly secure, operating data centers. The security for an advanced, state-of-the-art facility like this is considerable. There’s gated entry into tenant areas, retina scanners to ensure that anyone entering certain areas is supposed to be there, and many other measures to ensure the security of data. It is highly restricted. This was all explained to the Mayor at the time.
And as I’ve said, in addition to the jobs on-site, there are vendors, outside contractors, engineering companies and others. This is how you create that hub of activity. People are in and out all day. This is where the impact really is felt. There are engineers to assist our OPS team with maintenance of the equipment, helping tenants with racking or replacing servers—all this activity is happening all the time.
But you need tenants, right? What’s the guarantee that these buildings aren’t going to sit empty?
There are no guarantees, but I can tell you that, right now, all of our facilities are 100% occupied. We’ve never had an issue—in fact, demand is vastly outstripping supply. In other words, with all of the data we’re creating and storing right now as a society, we can’t build these data centers fast enough to accommodate the need.
But we can’t start selling the Niagara Digital Campus to tenants unless there is some evidence that this is real. Nobody builds a $150 million, or $300 million or $1.5 billion facility based on spec. That would be completely foolish. It needs to be real. And respectfully, if the local community spends all its time squabbling, it will never be real.
Will the demand for advanced data centers only grow?
It is highly likely to outstrip supply for the foreseeable future. The artificial intelligence (AI) you are reading about now will increase demand. The Internet of things will increase demand. This is just the beginning. Think about the changes in technology just over the past few decades. Digital photography is one example. Or consider streaming audio and video data, which virtually exploded with remote employment and hybrid employment spurred by the pandemic. All of this requires data that needs to be stored somewhere.
Let’s talk about diversity and the ways centers like these provide quality jobs for entire communities. Is that true?
Yes, there is remarkable diversity at all of our facilities, and there are jobs at all skill levels. I should point out that this occurs naturally—we’re not just checking boxes. We ensure we create the conditions that will foster this diversity, of course, but we believe it is a feature of these types of facilities and the incredible range of jobs and opportunities we bring at all levels, starting with the array of construction jobs even before the first shovel is in the ground.
And how do facilities like this enhance broadband access for local communities?
That is a really important aspect of these types of projects. Part of it is locational. The criteria we’re looking at when building a facility like this is available land, available power, and available fiber. We need what’s called the “trunk” fiber coming into the community. Once you have that, you’ll have the ability to create multiple, diverse sources of fiber for everyone in the local community. Companies come in and compete with each other—not just to serve the tenants in our facility, but all of the businesses and residents in the community. Since they’re already there for Niagara Digital Campus business, they have a pool of additional potential companies and homes they can go after. Quality and speed go up, prices come down. And that benefits everyone.
Some people in Niagara Falls don’t believe this project is real. Is this project real?
It is absolutely real. We’re ready to start selling this to tenants today, but we can’t sell some vague concept. We can’t sell spec. We need permits. We need to be moving dirt around. We have to show it’s coming so that we’re able to attract the attention of prospective tenants.
As I’ve said before, this is a unique situation for us. Usually, local communities welcome us and work with us to get the job done: confirming infrastructure, acquiring land, doing what is necessary so that we can show this is real to our tenants. And some communities even provide incentives. Niagara Falls doesn’t have to do that here. The risk is all with Urbacon and Niagara Falls Redevelopment.
And you’ve never gone into a local community where the community wound up disappointed. Is that correct?
Given all of this, would Niagara Falls be foolish to turn their back on such an opportunity?
Personally, I think so. Niagara Falls is missing an opportunity if they turn their back on this. Look around you—look at Pennsylvania, Ohio, other areas, and what they are doing. They are saying “Let’s do this.” Why not here? It’s mystifying to me.
Having said that, while we can’t wait forever, Urbacon remains committed to Niagara Falls and committed to this project.