EDITORIAL: Data center shows downside to federal land ownership

If Nevada controlled more of the land within its own boundaries, state and local officials would have more input over how that land was used.

The Bureau of Land Management recently announced that it had approved the Townsite Data Center project near Boulder City. The news came as a surprise to Boulder City residents. Many had been fighting efforts to allow a data center on city-owned land.

Data centers are warehouses that house the computer servers used for things such as artificial intelligence and cloud storage. Switch is probably the best-known data center company in Southern Nevada. It has buildings near Interstate 215 and Decatur. Switch has operated for years without much public consternation, but data centers have recently generated fierce opposition throughout the United States. A July poll from Public First found 41 percent of Americans would oppose a data center being built within three miles of their home. Just 24 percent would approve.

Much of this reflects fears about the disruptive effects of AI on employment. Somehow tech executives working with artificial intelligence didn’t foresee the obvious outcome of promising their technological breakthrough would produce mass layoffs.

There are real debates to be had on this issue. Boulder City residents expressed concerns about pollution and other unknowns. Data centers demand an enormous amount of power. Nevada ratepayers must be protected from increased costs. Perhaps data centers could actually help defray some of the costs from Nevada’s foolhardy 50 percent by 2030 renewable portfolio standard. The Southern Nevada Water Authority’s prohibition on evaporative cooling does help alleviate concerns about excessive water use.

On the other hand, Boulder City would have received $2.3 million in taxes and lease payments from a data center built on city land. That money could have funded new services for residents or lowered taxes.

Those are real trade-offs, and it would have been positive for local elected officials to discuss them with potential businesses and local residents. But you lose your leverage when companies can obtain the land they seek from Uncle Sam, as happened here. The feds gave the green light to the project through an unusual process intended to cut red tape during environmental reviews.

In Nevada, the federal government owns more than 80 percent of the state. In Clark County, the federal government controls a staggering 88 percent of the land. While Boulder City would have received millions from a signed lease and property taxes, Clark County receives only peanuts from the federal government. Instead of paying property taxes, the feds sent Clark County just $4.6 million last year for the millions of acres it controls. This rip-off is called “payment in lieu of taxes.”

Perhaps the example of the Boulder City data center on federal land will help convince Nevada Democrats that the state needs to control more of the property within its borders, particularly in developed areas such as Clark County.