Beyond the Tax Check: How Data Centers Can Actually Benefit Communities

With the right governance and community engagement, data centers can deliver real value beyond property taxes—but the industry needs to change its approach.

The narrative around data centers has become predictably negative: they consume massive amounts of power and water, create minimal jobs, strain local infrastructure, and offer nothing beyond tax revenue. Communities hear these concerns and increasingly respond with moratoriums and rejections.

But that narrative isn't inevitable. With proper governance, proactive planning, and genuine community partnership, data centers can contribute meaningfully to local well-being without burdening residents.

The keyword is "can." Right now, most don't. But a handful of operators are demonstrating what's possible when data centers are designed to benefit communities rather than just extract resources and write tax checks.

At the infra/STRUCTURE Summit in Las Vegas last week, Structure Research brought together data center operators, utilities, economic development officials, and investors specifically to address these challenges. The conversations revealed a path forward—if the industry is willing to take it.

What Communities Actually Need

Bill Thomson, VP of Product Management at DC BLOX, has learned through direct experience what communities want from data center projects. It's not complicated, but it requires more than standard economic development pitches.

"Communities want to understand what's in this for them beyond tax revenue," Thomson said. "They want infrastructure improvements, connectivity benefits, and assurance that their power and water won't be compromised."

DC BLOX addressed these concerns in Rockdale County, Georgia, by building something most data center operators never consider: a dark fiber network that benefits the entire region.

The 26-county fiber route from Myrtle Beach, South Carolina, to Atlanta passes through mostly rural areas. Local internet service providers can connect to the network at access points approximately every 2,000 feet, instantly gaining high-capacity connectivity to major hubs.

"We put that superhighway in place, which can be used for local businesses and ISPs to connect these communities," Thomson explained. "When we say we're building this data center, it's going to be connected to very high-capacity fiber that benefits the entire region."

That's tangible community benefit. Businesses can operate more effectively. Students can access educational resources. Telemedicine becomes viable. The data center becomes an enabler of broader economic development, rather than an isolated facility extracting resources.

This is what proper governance should incentivize: data center projects that deliver community infrastructure alongside their own operations.

The Power Grid Opportunity

The power consumption concern is legitimate. Data centers require enormous amounts of electricity—Meta just announced a gigawatt facility in El Paso, and OpenAI is planning 100 gigawatts globally.

But that demand can drive grid improvements that benefit everyone, if structured properly.

David Dorman, Director of Commercial Operations at APR Energy, explained during a briefing at the Structure Research conference that utilities face two to seven-year delays delivering power to data center sites. The infrastructure simply isn't there.

Data center operators are increasingly willing to pay for substations and transmission line upgrades themselves. Georgia Power already requires this. Duke Energy in Florida is developing a rate framework that shifts infrastructure costs to data centers rather than residential ratepayers.

That's the right direction. But governance can go further.

Regulations could require that infrastructure built for data centers include capacity for future community growth. If a data center needs a new substation, design it with 150% of the required capacity. The excess becomes available for residential and commercial development.

If transmission lines must be upgraded to handle data center load, route them to serve underserved areas along the way. Use data center infrastructure investment as an opportunity to modernize regional grids that haven't seen significant upgrades in decades.

Thomson noted that Georgia Power committed to ensuring data center expansion doesn't burden residential ratepayers. "They're saying data centers will pay for their own infrastructure," he said.

That protects residents from rate increases. But forward-thinking governance will ensure those infrastructure investments also create community benefits—improved grid reliability, capacity for future growth, and resilience against outages.

The power demand is real. The question is whether governance channels demand investments that strengthen regional infrastructure for everyone.

Water Stewardship as Standard Practice

Water consumption concerns often dominate community opposition to data centers. The perception that facilities drain local water resources persists even as the industry adopts more efficient cooling technologies.

Governance should make water stewardship non-negotiable.

Thomson addresses water concerns directly in community meetings: "We use recycled water systems, utility water. We're not straining municipal supplies."

But that shouldn't be voluntary best practice—it should be a regulatory requirement. Data centers in water-stressed regions should be required to demonstrate closed-loop cooling systems, the use of reclaimed water, or on-site water treatment that returns clean water to local systems.

Some operators are already moving in this direction. New facilities increasingly incorporate advanced cooling that dramatically reduces water consumption. Air cooling, immersion cooling, and other technologies can eliminate water usage entirely for certain applications.

Regulation should accelerate this transition. Communities shouldn't have to trust that operators will make responsible water choices. Requirements should ensure data centers improve or at least don't harm local water availability.

In some cases, data center investments could fund water infrastructure improvements. If a facility needs water infrastructure upgrades, governance could require those upgrades to include capacity for municipal needs—new treatment facilities, distribution systems, or conservation technologies that benefit the entire community.

The goal isn't to prevent data centers from using water. It's to ensure their water usage doesn't compromise community needs and ideally contributes to improved water infrastructure.

The Employment Reality

Data centers will never create as many jobs as manufacturing facilities of equivalent capital investment. That's the nature of the business. A $6 billion data center might employ a few hundred people. A $6 billion factory might employ thousands.

But governance can ensure the jobs that do exist deliver real community benefit.

Regulations could require local hiring preferences for operations and maintenance positions. They could mandate partnerships with community colleges to train residents for data center careers. They could set standards for wage levels and benefits that ensure data center jobs are genuinely good jobs, not just minimal employment.

Thomson described DC BLOX facilities as employing "20 to 25 people, 24/7." Those aren't huge numbers, but if those positions offer strong wages, benefits, and career development opportunities, they represent quality employment.

The industry often touts "high-paying technical jobs" in economic development pitches. Governance should hold them to that promise through enforceable standards.

Additionally, construction creates temporary employment. A 120-megawatt facility might require hundreds of construction workers over 12 to 18 months. Local hiring requirements for construction can deliver short-term economic impact, even if permanent employment is limited.

The employment gap is real, but governance can ensure the jobs that exist deliver maximum community benefit.

Tax Revenue That Actually Benefits Residents

Property tax revenue is the primary economic argument for data centers. Hundreds of millions of dollars over 10 to 15 years sounds attractive on paper. But residents don't see direct benefit unless governance ensures it.

Regulations could require that a portion of data center tax revenue fund specific community improvements: schools, parks, healthcare facilities, workforce development programs, or infrastructure maintenance.

Some jurisdictions already do this through development agreements. They negotiate specific community investments as conditions of approval. But this should be standard practice, not ad hoc negotiation.

Thomson noted that DC BLOX makes "sizable charitable donations" and engages proactively with communities. "We volunteer, make donations, and engage with business communities. We're trying to be good corporate citizens."

That's commendable, but it shouldn't be voluntary. Governance should ensure every data center project includes enforceable commitments to community investment beyond tax payments.

The tax revenue is real money. Governance should ensure it translates into visible community improvements that residents can see and appreciate.

Transparency as Regulatory Requirement

Much of the opposition to data centers stems from misinformation and a lack of understanding. Thomson described situations where "there's so much disinformation spreading" about what data centers actually do.

Governance can address this through transparency requirements.

Regulations could mandate regular public reporting on:

• Actual power consumption versus projections

• Water usage and conservation measures

• Local employment numbers and wage levels

• Tax contributions and how they're allocated

• Environmental impact and mitigation efforts

• Community investments and infrastructure improvements

This data should be accessible, understandable, and regularly updated. When communities can see actual performance rather than relying on projections and promises, trust builds.

Thomson takes students on digital infrastructure tours, explaining how their cell phones connect through fiber networks to data centers running applications. "How long did that take? Less than a second. We just need to educate the world about how they depend on this digital infrastructure."

Regulatory transparency requirements would scale that education. Instead of occasional community meetings, residents would have ongoing access to clear information about data center operations and impacts.

The Role of Economic Development Officials

Economic development officials often find themselves caught between industry promises and community concerns. Governance should give them tools to ensure data center projects deliver genuine value.

Scott Millar, economic development director for Catawba County in North Carolina, framed the challenge plainly: "Yes, it is important to create higher-wage, higher-skilled jobs, but it's also important to pay the bills."

Data centers pay bills through property taxes. But governance should ensure they also contribute to broader community wellbeing through enforceable development agreements.

Craig J. Richard, president and CEO of the Tampa Bay Economic Development Council, stated: "Data centers play a vital role in our future economic competitiveness."

That's true, but economic competitiveness should mean more than attracting investment. It should mean building infrastructure and capacity that enables broader economic development.

Governance should empower economic development officials to negotiate comprehensive agreements that include:

• Infrastructure improvements beyond facility needs

• Local hiring and workforce development commitments

• Water and energy stewardship standards

• Community investment requirements

• Transparency and reporting obligations

These shouldn't be optional. They should be standard components of data center approvals.

What Good Governance Looks Like

Phil Shih, Managing Director at Structure Research, noted in his opening remarks that the industry faces "so many different things happening at once" and emphasized the need for coordination across stakeholders.

The infra/STRUCTURE Summit exists specifically to facilitate that coordination. But industry events aren't enough. Governance must create frameworks that ensure coordination and community benefit.

Good governance for data centers includes:

• Infrastructure requirements: Data center projects must include investments that benefit the broader community—grid improvements, water systems, fiber connectivity—designed with excess capacity for future regional needs.

• Environmental standards: Mandatory water conservation, energy efficiency, and renewable energy commitments with regular reporting and verification.

• Economic commitments: Local hiring preferences, workforce development partnerships, and living wage standards for operations and construction.

• Community investment: Binding agreements allocating portions of tax revenue or requiring direct investments in schools, healthcare, workforce programs, or infrastructure.

• Transparency obligations: Regular public reporting on power usage, water consumption, employment, tax contributions, and community impacts.

• Approval processes: Comprehensive review that includes community input, environmental assessment, and infrastructure planning before approvals are granted.

Thomson believes community resistance will eventually ebb as people recognize the value of digital infrastructure. "I think this wave of 'we don't really know what a data center is, but we think it's bad'—that wave will ebb when people see the actual benefits."

But seeing actual benefits requires governance that ensures benefits exist. Without proper regulation and enforceable standards, data centers remain extractive facilities offering tax revenue and little else.

The Path Forward

The data center industry is at a crossroads. Communities are pushing back, utilities struggle to keep pace, and the current model of promising tax revenue while minimizing local impact isn't working.

Thomson frames it as a question of winners and losers: "States that have proactive policies that say, 'Let's excel, let's adapt and accelerate'—those are going to be the economic winners. If you don't, you're going to get left behind."

But "proactive policies" shouldn't mean rubber-stamping projects. It should mean creating governance frameworks that ensure data centers contribute meaningfully to communities.

The industry has the resources to do this. Data center operators are willing to invest billions in facilities. They can invest in community infrastructure, workforce development, and environmental stewardship as well.

The question is whether governance will require it.

Right now, most jurisdictions treat data centers like any other industrial facility—review the project, collect taxes, move on. That approach is failing. Communities want more, and they're increasingly willing to reject projects that don't deliver it.

The alternative is governance that treats data centers as critical infrastructure requiring comprehensive community benefit agreements. Not as obstacles to development, but as frameworks ensuring development actually benefits the communities where it occurs.

Thomson describes DC BLOX's approach: "We're not just a data center operator. We are a digital infrastructure provider with a lot of the pieces that are lifting the Southeast in terms of the infrastructure they're going to need for the future economy."

That vision—data centers as enablers of regional digital infrastructure rather than isolated facilities—should be the standard, not the exception.

With proper governance, it can be. The technology exists. The capital exists. The industry expertise exists. What's needed is a regulatory framework ensuring data center development includes genuine community partnership and benefit.

The current wave of rejections and moratoriums sends a message: communities won't accept data centers that extract resources and offer nothing beyond tax checks. They want facilities that improve their infrastructure, protect their environment, provide quality employment, and contribute visibly to community wellbeing.

The industry can deliver that. Governance should ensure it does.