U.S. Developer Offers $10,000 per Household to Win Data Center Approval

U.S. real estate developer NorthPoint Development has offered to pay about 13.6 million won ($10,000) to each household in a Pennsylvania township to quell opposition to a planned data center campus. Many residents remain opposed.

NorthPoint Development has been sending letters to every household in Hazle Township, Pennsylvania, since June to notify them of the $10,000 payment plan, according to The Wall Street Journal. The payments are conditional on residents consenting to the data center project. The company said the offer is intended to ease concerns over water, the environment and noise.

NorthPoint plans to build a 15-building data center complex on a 1,300-acre (about 5.3 square kilometers) site at the foot of the Pocono Mountains. Once the first building receives an occupancy approval, about 4,500 households in Hazle Township would each receive $10,000, for a total of $45 million (about 61.16 billion won). The company originally named the program the $45 Million Direct Resident Grant Fund.

Median household income in Hazle Township is about $60,000 (about 81.6 million won). After taxes, $10,000 is equivalent to roughly six months of rent for a two-person household, but most residents contacted by the Journal said they still oppose the data center. They cited noise from construction and operations, the possibility of falling home prices and the risk that local politicians could be swayed by a large developer. Distrust over what residents see as insufficient disclosure by the local government and the developer was also cited as a reason for opposition.

One resident living nearby said $10,000 would not be enough to offset a decline in home values. Ed Negra, a resident who has taken part in the campaign against the data center, said the cash offer could backfire by reinforcing the perception that the company is trying to buy people off.

Brent Miles, NorthPoint's chief marketing officer, said at a community briefing last year that the offer was devised as an answer to the question of what residents would get out of the project. Separately from the direct payments, NorthPoint said it would invest $120 million (about 163.1 billion won) in the area over the next 15 years, including building a police station.

Whether the project goes ahead remains unclear. Hazle Township authorities rejected the application in November last year, citing zoning rules. NorthPoint sued to challenge the decision, and a Luzerne County court recently dismissed the company's appeal. The township has temporarily halted data center permitting while it overhauls its zoning rules.

Attempts to use money to defuse local resistance to the spread of data centers are emerging across the United States. In Richland Parish, Louisiana, Meta paid $50,000 bonuses to teachers, and in Ellis County, Texas, Compass Datacenters put up $15 million to build a new animal shelter. Maryland is collecting county-by-county proposals on terms for hosting data centers, and Vivek Ramaswamy, a candidate for Ohio governor, has pledged to provide free electricity to local governments that attract data centers. Direct cash payments to residents, however, are considered unusual.

NorthPoint has said it holds 37 sites totaling 15,600 acres across 17 states, with potential development capacity of 4.8 gigawatts. The industry is watching whether the cash payment approach spreads to other developers.