A Charlotte suburb had embraced data centers. Now, it’s rethinking that growth
As data center construction concerns continue to rise nationally and locally, Catawba County leaders want its residents to see the economic benefits they can produce. However, while the county is touting its existing investments, data center growth isn’t part of its economic future.
In a Tuesday letter to residents, the county explained why it’s still moving forward with its $1 billion investment agreement with Microsoft to build four data centers in the Hickory region, which is about an hour north of Charlotte.
Catawba County, along with other parts of North Carolina, have become a mecca for data center construction as demand for AI tools has increased.
But the rapid surge in construction has created conflict around the Charlotte region, as many residents have opposed the data centers. They cited concerns about noise, water usage and the significant power needs of the centers, which often appear in communities with limited public disclosure.
A number of local cities have enacted moratoriums on data center development, including Charlotte which just approved a 150-day moratorium on data center construction and rezoning this month.
Construction on the Microsoft centers began this year in Conover, Hickory, Maiden and Newton, after the projects were delayed for about 10 months.
That construction, along with concerns surrounding water usage, prompted the county to write the letter, according to Scott Millar, president of that Catawba County Economic Development Corp.
It gave the county a chance to try to further sell the deal to residents and explain why the agreement is vital to the area’s economic development. The letter was a joint statement from the county, the EDC, the cities of Conover and Hickory and the town of Maiden.
Microsoft’s billion-dollar investment commitment has the chance to increase as it did with the county’s agreement with Apple, which built its largest data center in Maiden in 2010. That was also one of the first centers in the county.
Catawba County noted that the Microsoft data centers will pay property taxes based on the value of the buildings, equipment and infrastructure.
Data center tax benefits have been substantial, with Maiden seeing its tax rate drop from 40 cents to 38 cents, while funding a community center, town hall and emergency services, Millar previously said.
And since the centers generally have low employee numbers, the centers don’t add to commuter traffic or place demand for other municipal services.
As for water concerns, the county said the city Hickory provides water service to all the data centers in the region. Once all the centers under construction are completed, they will use about 1% of Hickory’s daily water production capacity.
Data centers in Catawba County
In the early 2000s, Catawba County was reliant on the textile and furniture industries, as was most of the Piedmont area.
But those industries were beginning to wane at that time and continue to do so. For example, Kroehler Furniture Co. had a plant in Conover for over 40 years. In December, the company laid off 275 workers with only a two-day notice.
To stay afloat, Catawba County sought to diversify its economic gains and began looking into data centers.
Apple opened its center in Maiden, which is about 40 miles northwest of Charlotte. Apple said it would invest $1 billion into the region. That’s grown to $6 billion, Millar said.
In 2013, Bed Bath & Beyond opened a data center in Claremont, which was worth $36.8 million. That site was sold to Data Journey, a co-location center, last year, Business North Carolina previously reported.
And Microsoft arrived in the county in 2022. It said it would invest $1 billion to build four data centers in Conover, Hickory, Maiden and Newton. Those communities are about 40 to 60 miles north of Charlotte.
The project would create at least 50 jobs. Microsoft has until 2032 to fulfill its investment agreement. The four data centers will cost Microsoft a combined $909 million, according to the construction permits.
More data centers in store for Catawba County?
Perhaps residents’ biggest concern is whether Catawba County will continue to seek out data center investments for the region.
The answer is no, Millar said.
Catawba County was considered the catalyst for the modern data center boom in North Carolina, establishing a “Data Center Corridor” in the early 2000s, which includes Caldwell, Rutherford, and Cleveland counties.
And in 2006, the county began pursuing data center investments to replace the downturn of its textile, furniture and coaxial cable industries. The county even hosted data center information exchanges, where it would invite investors to look at Apple’s complex and see whether they could build similar centers, Millar said.
But that hasn’t occurred for the past several years, Millar added.
While Catawba has agreements with Apple and Microsoft on data center development, and it will continue to support both companies, the county isn’t pursuing more investments from that sector, according to Millar.
If another data center developer is looking to build in Catawba, the county would look into it as it does with all proposals, but it wouldn’t be a strong contender as it was in the past, Millar said.
“(Data centers) are an important part of our industrial stack,” Millar said. “We’re not actively chasing that sector for new investment.
“We’ve had other opportunities and other people seek us out because of the name recognition. We’re a known marketplace, but we’re choosing to go in a different direction,” he added. “We’re going to go off and pursue other sectors.”
