At the heart of the debate over whether Apex should annex and rezone a parcel of land located in New Hill just south of Old U.S. Highway 1 for a proposed data storage facility is a central question: Do town leaders envision that property as a corridor for future industrial growth, or do they want it to remain rural pastureland?
If it’s the former, developer Michael Natelli argues, his company’s proposed New Hill Digital Campus is an ideal use for the site; if it’s the latter, he says, his business here is done.
The town’s long-range planning documents, including its Comprehensive Plan, have identified the site for industrial use for at least the past decade, but it is currently zoned for low-density residential.
On Thursday evening, the Town of Apex’s Environmental Advisory Board (EAB), working on the assumption that Apex leaders are still planning for that industrial use, voted 6–3 to side with Natelli after his company, Natelli Investments LLC, submitted rezoning conditions aimed at addressing the environmental impacts of the project, including sound pollution, water and electricity usage, and the presence of diesel-fueled generators proposed for the site.
The board is composed of volunteers with expertise in conservation, environmental engineering, land use, and related areas. The board’s approval of the rezoning conditions is nonbinding but indicates a favorable recommendation of the proposal to the Apex Town Council based on environmental impacts when the council considers the rezoning, if the conditions are met. The town’s planning board will weigh in on the land use, and the town council will ultimately decide whether to grant the rezoning to industrial use. Continued opposition from residents is expected.
In an interview ahead of the board meeting earlier this week, Natelli told the INDY that he recognizes the proposal would be a major change for the area, but if the town is going to stick with its plan for an industrial use for the site, a data storage facility would be less disruptive than a manufacturing plant, recycling facility, or distribution warehouse, for example. He says the company will go beyond basic requirements for buffers, setbacks, and vegetation to minimize light and noise pollution, and at the board meeting, he committed to regular sound testing and monitoring.
“We’re trying to work in a collaborative way with the town, with the community,” Natelli says.
Still, the impacts of emerging data storage facilities, used to power technology and increasingly powerful AI, are being felt across the country. Large facilities like this one use staggering amounts of electricity and in some cases water, and for many Americans living close to them, the quality-of-life issues are real.
“As a founding member of this board, I don’t think there could possibly be enough zoning conditions to mitigate the negative effects of this proposal,” said EAB member Katie Schaaf, one of the dissenting voters, at Thursday’s meeting.
Natelli acknowledges that there is a lot of negative media coverage about data centers, much of it “rightly so, because there are a lot of projects that, for one reason or another, should be scrutinized for certain reasons.”
But he disagrees with the premise that data centers “are bad all the time.”
“Certain areas like this, I feel, are very compelling for data centers,” he says. “Other areas are not. If we can start looking at things on a project-by-project basis … I do think we can find a way to mitigate a lot of the concerns that are out there, if people are willing to have an open mind about it.”
Here’s a look at the plans for the facility so far, some of the environmental issues under discussion, the community’s concerns, and how the developer has proposed to address those concerns in the rezoning conditions.
Electricity usage
There’s no getting around it—data centers are power intensive, and this one especially so with a request for 300 megawatts from Duke Energy (for context, that’s about a third of the total energy output of the nearby Shearon Harris nuclear plant).
Natelli Investments submitted a load study to Duke Energy this spring, and Natelli says the company “feels comfortable” asking for that much power. Transmission lines already exist that could link the property to Shearon Harris, and the developer would pay for any infrastructure upgrades needed.
But residents worry that the massive electricity usage would cause their power bills to surge.
Natelli says the facility wouldn’t be taking power directly or exclusively from Shearon Harris but from several different power plants that serve Duke Energy’s grid, and the utility would figure out how to supply the 300 megawatts incrementally.
“Duke [Energy] … is evaluating the ability for them to serve our requested load, as well as what impacts that load might have on the transmission system, and any upgrades required to the transmission system—the extension of power, the substation, switching stations—we have to bear the cost of all that,” Natelli says. “It’s a very, very big commitment, but it’s a commitment that we’re making, and we’re not pushing that cost … on to other people in Apex.”
But a recent report from Bloomberg found that wholesale electricity costs up to 267 percent more than it did five years ago in areas located near data centers, especially in Northern Virginia and Maryland (where Natelli Investments is based), where data centers are highly concentrated.
“It’s an increasingly dramatic ripple effect of the AI boom as energy-hungry data centers send power costs to records in much of the US, pulling everyday households into paying for the digital economy,” the report states.
In North Carolina, as Duke Energy evaluates its capacity to provide power for data centers planned statewide, there’s a possibility that the state’s Utilities Commission will have to raise rates on all consumers. But the Town of Apex has its own local distribution and transmission rates.
“And we’re not touching that,” Natelli says. “There’s nothing we’re doing that’s going to influence the retail rates that [the town] is charging Apex residents.”
Water usage
Part of the draw of the New Hill site is its proximity to the Western Wake Regional Water Reclamation Facility, a wastewater treatment plant jointly owned by the towns of Apex and Cary that’s situated just a few hundred feet from the property.
With the plant, an 18 million–gallon-per-day facility with a reclaimed water system already on-site, a prospective client would have the option to use nonpotable treated wastewater —between 0.5 million and 1.5 million gallons per day—for cooling inside the data storage facility.
It’s likely the water would only be used for cooling during the hottest months, representatives for Natelli told the EAB, and the new facility could provide on-site storage for the treated wastewater in the case of an emergency.
It’s also likely that an end user for the site wouldn’t require water at all, as some companies have shifted to using air or fluid cooling systems for their equipment.
“A lot of users are moving away from using water altogether,” said Kraig Walsleben, a consultant for Natelli Investments.
If the site does end up using wastewater, about a third of the water used would evaporate during the cooling process.
“We would have to evaluate ecological impacts,” Walsleben said.
Diesel generators
Natelli’s proposal calls for 80 three-megawatt backup generators to be located on the site. Each would be housed inside a tractor-trailer-sized storage container, with a diesel fuel tank stored underneath.
The diesel generators have been a source of anxiety for residents. Burning diesel, a fossil fuel, releases nitrogen oxide, sulfur oxide, carbon monoxide, and particulate matter into the atmosphere.
“Air pollutants are silent killers,” said Michelle O’Connor, a resident of the neighboring Jordan Pointe community, at Apex’s regularly scheduled town council meeting this week. “These particulates are a unique threat as they not only are capable of penetrating lung and olfactory tissues but are small enough to cross the blood-brain barrier. There is no exposure level that is considered safe, just levels that are considered acceptable.”
In their zoning conditions, Natelli pledges to use Tier 4–equivalent generators, which are designed to meet the U.S. Environmental Protection Agency’s strictest emission standards. They are the most energy efficient and have particulate filters and internal processes to treat emissions, Natelli says.
The generators would all need to be permitted to meet standards set by the EPA and the North Carolina Department of Environmental Quality, and they would be used rarely. The facility would be running on higher-voltage-transmission power lines rather than regular residential distribution lines, Walsleben explained, and transmission power lines are less impacted by weather or other emergencies that tend to knock out power.
Noise pollution
For a few of the EAB members, and for some members of the community, concerns over noise associated with the generators, cooling equipment, and other aspects of the data storage facility are some of the most pressing.
Natelli Investments has sought to address potential noise impacts in its rezoning conditions in several ways.
First of all, the company wants to work with the Town of Apex to create a more robust noise ordinance that will provide an objective way to measure noise output and make sure the facility is in compliance.
In addition to doing its own sound evaluations, the company committed at the board meeting to paying for an independent consultant hired by the town to work on sound attenuation and testing measures. Increased setbacks, the company’s representatives said, will also help, as will buffers with vegetation.
“We’re going to implement design measures like berming and landscaping and noise fencing if required,” Natelli told the INDY. “There are attenuation measures that can be built around the equipment. We’re fully committed to doing whatever we need to to ensure that the sound isn’t causing a problem, and it’s at levels that are deemed acceptable.”
He adds that at the property line, the noise could, at 55 or 60 decibels, sound like a normal conversation. The company plans to study how the sound travels to nearby neighborhoods like Jordan Pointe.
“It’ll hopefully put a number of people at ease,” Natelli says.
While the residents in attendance vocally disagreed, it did seem to put the majority of the EAB members at ease. Board member Bill Jensen said the digital campus could provide an opportunity for more Apex residents to work where they live rather than commuting to Raleigh or elsewhere.
“I’ll be frank, I think this property is a decent area for light industrial,” said Jensen before making a motion to approve the rezoning conditions. “‘I’m sorry, I know that’s probably going against the grain, but if you do these things right, and you make a live-work situation, then everybody can benefit. And that’s the critical thing, and that’s what we’re trying to do, is make this thing right.”
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