PhillyDeals: Plans for corporate data center fall through in Del.

Posted: July 14, 2014

Eugene Kern, a Marine-turned-corporate computing consultant based in West Chester, has spent years promoting a billion-dollar scheme to build a giant corporate data center with its own big, clean natural gas power plant.

Rejected at a New Jersey site, Kern found fans in Gov. Jack Markell's Delaware. The Democrats who run the state have backed a string of big industrial projects, hoping for jobs. Some worked, some didn't: The revived PBF Energy refinery in Delaware City is turning trainloads of oil into fuel. But Fisker Automotive burned up $19 million of state funds without reopening the ex- General Motors plant outside Wilmington.

State leaders thought Kern's proposal sounded like a fit for the partly state-backed University of Delaware's "Science, Technology and Advanced Research (STAR) Campus," a past Chrysler assembly site now home to UD health-professional classrooms, an electric-car lab, and a Bloom Energy Corp. fuel-cell plant funded by a surcharge on Delaware electric bills.

With Markell's blessing, Kern won bipartisan support in the state capital. Ex-state Republican chairman Tom Ross, Laborers leader Brian McGlinchey, and other union and business groups joined the campaign. UD president Patrick Harker signed a long-term contract.

The site's Newark neighbors weren't so sure. Their environmental and traffic questions turned to sign-waving protests; their state rep, John Kowalko (D., Newark), joined them.

Backers brushed this off: Hadn't people lived next to an auto plant in peace over there for 50 years? Don't college towns protest everything?

These were educated, tenacious protesters. They questioned the project's financing, job projections, and business model. They especially questioned its reliance on a big 279- megawatt natural gas-fired electric plant - at a college that had pledged to burn less carbon.

When the UD faculty senate voted unanimously against the project in the spring, State Sen. Harris McDowell (D., North Wilmington) and his allies retaliated by stalling money earmarked for UD.

Harker named a "Working Group" to review the proposal. On Thursday it released its unanimous report: "Not a good fit." Other data centers, it noted, don't need power plants. Other power plants that recycle heat aren't this big. So Harker terminated Kern's lease.

Kern didn't return calls. Markell declined to second-guess Harker. Sen. McDowell told me he's "extremely disappointed. It is the most promising economic development project we've had in decades." And why, McDowell asked, should a college town have tougher standards than anyone else? He noted Calpine Corp. recently opened a gas power plant larger than Kern's proposal, in Dover, and a federal Environmental Protection Agency official stopped by to praise it.

I asked Harker if he'd do anything different next time. "It's a standard process that, when you sign a lease, you have a right to review the plan to make sure it is consistent with the vision," he told me. "Until you roll up your sleeves and start to work together, you don't know what it's going to be."

"It's disappointing. But Amy Roe and her army, they outworked us," Martin Willis, a union boilermaker who hoped to work on the project, told me, citing a Newark resident who led protests.

"The Delaware Chamber of Commerce, the unions kept telling us, 'This project is going to happen.' We went to [Newark city] hearings to say things positive. But there was a lot of pressure against us in that community of Newark," Willis added.

So he gets why UD said no. "But I still don't see how they're going to make power for this country without fossil fuels."



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