Not Your Father’s Data Center - Beyond the Cloud: Data Centers' Economic Impact vs. Policy & Sustainability

Episode Date: December 10, 2024

In this discussion, Raymond Hawkins, Chief Revenue Officer at Compass Datacenters, engages with Dr. Terry Clower, a distinguished professor of public policy at George Mason University, who also serves as the director of the Center for Regional Analysis and the Stephen Fuller Institute.The conversation delves into the strategic considerations for data center siting and land use, contrasting U.S. practices with European models. Dr. Clower provides insights on the essential role of data centers in the data economy and their impact on regional development.The dialogue touches upon critical issues like power consumption and sustainability, highlighting power planning, renewable energy sources, and the potential to revitalize nuclear infrastructure. The significance of data centers in modern economic development strategies is discussed, especially their influence on local tax bases and low infrastructure strain.Overall, the discussion offers valuable perspectives on how municipalities can integrate data centers into their economies, emphasizing long-term planning and the evolving landscape of utility and energy demands.Timestamped Overview:00:00 Intro00:52 Navigated unstable job market, transitioned to logistics.04:49 Recruited to lead Center for Regional Analysis.08:28 Varied localities' attitudes impact economic development approaches.12:20 Buddy Reiser navigates data center challenges locally.15:25 All data centers need careful land allocation.17:59 Renewables insufficient; old infrastructure revived due to demand.19:43 Data centers’ demand reshaping power industry dynamics.22:51 Exploring nuclear solutions to reduce waste.26:18 Data center proximity doesn't affect property value.30:28 Adapt to data economy or face constraints.35:27 Minor adjustments can help economies grow again.37:41 Northern Virginia's electrician apprenticeships thrive, creating jobs.

Of our non-carbon-based energy generation fuel sources, nuclear provides the best opportunity for the power needs we have. I can argue to you without a lot of effort that the revenues to the power companies provided by data centers is providing the capital resources and the ability for them to go to market to borrow the funds to develop this new technology and to install it. It requires billions of dollars. All right. Welcome, everybody. This is Raymond Hawkins, your host for another edition of Not Your Father's Data Center. Today, we have a special guest that will

help us understand how economic development and government and public policy influence what we do. Dr. Terry Clower from George Mason University, professor of public policy. Terry, you got a lot more titles than that, so I'm going to let you do all the rest of them. I got George Mason, a professor of public policy. You take all the other ones. Okay. Well, thanks, Raymond. So in addition to being a professor of public policy, I hold the title of Northern Virginia Chair in Local Government. I am the Director of the Center for Regional Analysis and the Stephen Fuller Institute. All right. That is, I show up with just one title, so you win the title battle. I'm already down 1-0. So, before we get into how data centers and public policy and regional development, all of those things fit together, do you mind giving us a little bit of history about you? I see that, you know, both of us spent some time in Texas, but tell us where you grew up, where you went to school, how you got into what you're doing. Let's get a little bit about you, Terry. Sure. So I was born in Dallas, in Texas, and stayed there for most of my life until I moved up to the D.C. area about 10 years ago.

Went to school. My undergraduate degree is in marine transportation from the Texas Maritime Academy in Galveston. So naturally, I became a professor of public policy. I definitely see the connection. You're right. Yeah, yeah, very much so. Just goes through. No, actually, so there is a connection.

So I learned how to sell ships. And about halfway through my senior year, just before I sat for my license exam as a deck officer, the job market just collapsed. You couldn't get into a job as a third mate of an ocean vessel. So I worked offshore oil industry for a while, took a boat over to the North Sea, that kind of stuff, doing things like that. But that really wasn't what I wanted to do. And it didn't look like the job prospects were getting any better for the ship. So I moved on shore and took a job doing

domestic kind of transportation for a big sugar company. So we were doing trucks and rail and that kind of stuff and got me in that. Moved a couple of jobs and got additional duties in warehousing, which included doing site location work. So where do you put a distribution center? You know, you want to serve the Southeast, where does it go? And I'd help identify those places, negotiate for the spaces, and then run into a startup operation. By this time, I'm late 20s, early 30s, and kind of decided that I wanted to go back and get a master's degree. Although one thing I will add to our conversation today that was a little interesting, My last private sector job before going into academia, returning to academia, I guess I should say, was as the operations manager

for a commercial record center. So I was the analog version of data centers. All right. Commercial records. Keep a track of people's tapes and paper, stuff like that. Yeah. Yeah. Just warehouses full of boxes of paper that you had. Some companies would call and ask for a particular file, so you'd have to know where to go, which box to find it in the warehouse, and the backup tape rotations, those kind of things, right? And so we did that. But I go back to school for a program at the University of North Texas in applied economics that advertised that they had a track in economic development theory. And I kind of thought it'd be kind of cool. I've been practicing this, you know, doing the site location work. What's the theory behind it? Go back to school,

left my job, got offered an assistantship at a center called the Center for Economic Development and Research. Once I got finished with school, I was offered a full-time job. I decided to go ahead and pursue a doctorate while I was working there that turned out to be in information sciences. We were doing a lot of work about telecom infrastructure development. This was in the 90s. You fast forward a number of years, and I got onto a professor track, became the director of that center, and then about six, seven years later- Was that up in Denton? Where was that center? Was that in Denton?

That's what I thought. Yeah, up in North Texas. That was in Denton. Several years later, I got recruited to come up to George Mason by a friend of mine that was a professor here to take over the Center for Regional Analysis, whose director was getting ready to retire. So it was just, there is a connection there. I usually try to do this over about three bears, you know, because it takes, you know,

if you think all those connections. But what it is meant, Raymond, and the fun part of what I get to do is we deal in regional economic competitiveness. My centers are basically like small consulting operations that are housed within a university and we help communities, we help nonprofits, we work with industry, state agencies. And the whole issue is regional economic competitiveness, which means that I talk about labor markets and labor force development. I talk about transportation. I talk about housing. I talk about regulations and rules.

I talk about power and energy infrastructure. So, you know, it's it's kind of all over the place, but it's fun and that's what makes it fun. And you say regional competitiveness. If I'm hearing you're right, Terry, this is, hey, my region, my district, my, you know, authority handling jurisdiction would like to land this kind of customer or this kind of industry or this kind of business and you help advise them on how to be competitive to attract that kind of development? Yeah, a little less of that and more about given the attributes of that community, what industries make sense for them to chase after? I gotcha. Because you can't chase everybody, right?

So it's how do you target your markets? Or if you're in one of those situations where your economy is slowing and that industry is starting to pass you by, what do you need to change? How do you change your trajectory of growth? I gotcha. So I'm going to take another stab at it. So less, hey, it's a competitive market

to land a company in your area. Rather, how do you make your area as attractive and how do you accentuate the things that your area has so that it is appealing to the marketplace, appealing to businesses? That's right. So my friends at Iowa aren't winning a lot of harbors, are they right well well i don't know you do you talk about river porch you know and because of the impact of uh conveyance along the inland waterways that's true the mississippi they could on the other side of the state that's fair fair all right well cool all right so so as we as data center folks and most of the people listen our podcast data center folks we spend time talking to the municipalities the cities the counties the states and the power companies and the fiber companies.

So the things you're helping advise on are all things that we're coming and asking questions about. So I think one of the things we'd love to talk about is how you on the advisory side to these municipalities and areas and regions, how do they think about data centers? Are they there? Where are they in the, you know, I think everyone recognizes, hey, let's hire or let's attract companies that bring in employees and bring in a tax base. And you think of companies that, you know, make consumers are easily aware of, hey, we'd like a big Ford motor plant, or we'd like a big Kia auto plant. Those ones I think you see in the news, but how do they think about data centers impacting their economic development? Yeah, that's almost like those questions that they ask Rodney Dangerfield, you know, in going back to school. I have one question in 72 parts, right?

If we can get permission to play a clip of him and Sam Kennison and back to school, it would be worth playing for sure. Yeah, that would be pretty good. Yeah. Raymond, the thing that that is there is such a wide variety of attitudes about economic development across localities in the country. Your company gets to see the evidence of some of that and we get to see some real differentials. You know, I come, you know, I was raised in a place and did most of my career in a place that one would argue as a general category is very business friendly. The attitude of localities is what can we do to help you, business person, make us your destination of choice. I currently reside in an area that is more about, well, business person, what will you do for me so that I'll allow you to come here? And part of the thing that we have and part of the challenge of what we do

in different communities is, how do you communicate to the local leaders about what their real position is as they're trying to position themselves? Maybe not for the economy that existed 10 years ago, 20 years ago or 40 years ago. And how do they position themselves or why should they even bother to try to position themselves for the economy of the future? It's one of the key challenges.

And I think you've addressed this in other of these podcasts that I've had the opportunity to watch, that I don't know that there are a lot of folks out there. There is not a general agreement about what is it that data centers represent in our economy. I mean, you certainly have places where, hey, this is the tax base. There is a lot of property value that goes inside of that data center. And because there's usually not a huge amount of direct employment at data centers, it's not particularly stressful to add that company to the local school systems and that kind of thing like that. So you get them- We don't mess up traffic patterns. You're right. We don't have parking lots with thousands of cars.

There are things that when you think of a large tax base facility, it's not doing. Like to your point, schools, roads, we're not messing those up when we show up. And the thing is, so you're going to have some that take that view. I am hopeful, though I cannot cite to you a specific example, though maybe you can offer one from the experience that you guys have had recently. Where do you have a locality that truly gets what data centers are representing now and in the future in the terms of the structure of our economy, particularly the economy that is just now emerging and will be the dominant sectors of our industry and economic growth for the next 25 or 30 years. Yeah, boy, if you're asking for an example, certainly I can't talk about economic development without bringing up my good friend, Buddy Reiser.

Buddy understood and embraced and was on the front end. I mean, Loudoun County is Loudoun County, and it's an incredible data center footprint for lots of reasons. But Buddy being on the front end of understanding just what you just said, hey, this is where the economy is headed, right? Whatever wave of the revolution, I know we finished the industrial revolution, and then we had a technology revolution. People talk about having an information revolution. I think Buddy did as good a job, and Loudon Townie did the best job in the world of understanding what was coming. Now, you see areas that are starting to, the switch is gone. I think gone off. Phoenix is in that boat.

The state of Arizona has been very aggressive. There are other places. Ohio's done a great job. There are places that are going, hey, this is the future. And we've got to do things to make our region fertile soil for the data center business. But I got to give props to my friend Buddy on setting the pace in Loudoun County. So the great Buddy Reiser is actually, you know, he and I talk fairly frequently. We are friends.

We are colleagues. We have worked together on a few things. We stand on stage together to give presentations. And his vision is so great. And we continue to talk about what's next. And, you know, and he's in this enviable position where he has this massive infrastructure capacity within the county that he's doing. But he also has challenges even with his own locality about helping the local leaders and increasingly the communication you make with the citizens on what the value is of data centers

beyond just the tax base. And how do you envision this to work in future? You know, one of the things that's been unfortunate is that for whatever reason, and I guess it's largely about power consumption, but the NIMBY industry has decided that data centers are their flavor of the month for a coordinated, consistent attack mode. It is really interesting. We worked in some local counties recently who were proposing some local Landrush rules that basically would have said, you're not going to build data centers here. And we were trying to make this case because they're sitting there saying, well, the citizens don't want data centers. Yes, but your own economic development plans say that you want to attract businesses that do artificial intelligence.

Eventually, the businesses that are doing quantum is like, hang on, guys. You know, this is this is like the old go back to the old days of man, you know, where we did more manufacturing. Of course, we're doing more manufacturing than ever. We're just not hiring as many people to do it, but you don't have manufacturing if you don't have facilities to store your raw materials, your in-process goods, and your finished goods before they sell to market, right? Warehousing. Yep. Got to have an industrial area to do all that. Yeah, for sure. You talk about in industrial development, right? People get, if I build a bunch of cars, I got to park them somewhere before they get on a train or on a boat and go somewhere else. I think it's less, you know, hey, we want to have our community

be able to address the information revolution. Well, hey, all of that happens in a building somewhere. I do occasionally get a kick when I talk to somebody and they go, I thought that was in the cloud. Well, it is, but a cloud is a building. It's a building somewhere. And by the way, they look like that right over there. And getting those dots to connect, because I think we're still in the very early stages of the data center development world. You know, there's still an incredible amount of capacity that resides on premise, the corporate owned data centers, the companies who own the facility and the facility is full of their computers. That still exists, and all of that's going to come to large cloud data centers. It's going to take another 15, 20 years, but we are continuing to grow the ability to manage information. And what NVIDIA is doing, data is growing like crazy, but NVIDIA has turned that

like a hockey stick. It has. And then, of course, part of growing like crazy, but NVIDIA has turned that like a hockey stick. It has. And of course, part of it, though, is also this dynamic. If you say, you know, well, we don't want hyperscale facilities. And there's going to be places where because of land use availability, proximity to residential anything, that it might not make sense to put a hyperscale size facility. That doesn't mean that you don't have, say, a smaller frame, you know, a smaller size colo facility or even edge facilities that are providing, you know, that more, you know, almost a little bit like the last mile analogy, though that's not a precise thing, but it's, you know, and it really is to address the massive data needs that appears to be the very basis of our emerging growth, high value added technologies. All of it just says we got to have all of the above, you know, appropriate places. And I think that's a lot of what's going to be fun is what is the appropriate land use regime?

Now, in this country, we keep talking about we want to shunt data centers into industrial zone land. Right. I'm not a big proponent about the old Euclidean zoning thing. I think it was useful in the late 19th and early 20th century. It's less useful today. But you go into Europe and we see data centers are plopped in the middle of an urban area. Yeah, yeah, yeah. You know, and so there are different visions, but some of it we have to do even better than we're doing today about how you communicate how data centers are a key piece of infrastructure and a component. They are not the industry. They are the things that will allow the data economy to succeed within a region. Or if you choose it to go elsewhere and you don't want to be it and you just want to be a consumer of that, well, it's like being, you know, you got the retailers buy, but you don't have the manufacturing. What is the high value added part? Yeah. Yeah. What part comes with the most value to your region or your city or your area? Terry,

as you advise these regions on competitiveness, how do they handle two questions? And again, you're going to get me with the multi-part question again. How do they handle the power consideration and then balance the power consideration with sustainability, right? I hear a lot in our space, oh, you know, data centers use too much power. Oh, my goodness, data centers are power hogs. Oh, data centers have got really, really, really high power demands. How are the regions thinking about that? And I know the power companies are separate, but I think that's part of the conversation.

How do the guys that you advise think about powering these facilities? Those are unanswered questions because we're trying to figure out the best way. And the thing that drives some of the real angst is that folks that thought that we were developing enough renewable type of energy capacity so that we could lower our dependent on fossil fuel driven energy generation are now finding that, no, we're still needing that to keep up, you know, but it is really interesting how the demand for power is actually creating a resurgence in using existing infrastructure, such as a, you know, an older nuclear plant that was becoming a real deteriorating asset. You now have the money flowing through that is going to say, let's get that thing up and operating in and it becomes an employer, it becomes part of the tax base and investor owned. Now you mentioned, you know, that it's not the communities. We do have that too, because we have not only investor owned utilities, we have municipally

owned utilities, we have co-op utilities. And I think one of the key things that'd be really fun to examine more is how can data centers work with these municipally owned utilities or the co-ops? Because beyond anything else, it's a huge revenue base for that company. I would argue to you without having done a specific analysis

that the demand for energy from data centers is lowering the average cost for utilities in many respects. All the threat is, oh, well, you're having that power line, so it's going to make everybody's rates go up. I actually would think that works a little bit different because you brought up the revenue scale so much that the net effect is utility rates for the residential market can be held down.

Yeah. It'll be interesting because I think that we've really seen, Terry, that power, the planning for power, whether it's at the generation level, the transmission level, or the distribution level, that data centers have shown up and made such a big ask here in the last couple of years that what's happening with the power providers is transforming, to your point about as they make a rate case and as they build their models, back when we would come and ask for, hey, I need 10 megawatts over the next five years for that building, now we show up and say, hey, I need a gigawatt.

And by the way, I need it in 24 months. And that conversation is actively changing right now between the data center industry and the power provider industry and going, okay, how do we do this? How do we partner around this? How do we plan together? What does the industry, what is the power industry fund? What is the data center industry fund? I think that would be a fascinating look, Terry, is to see how that translates back across the rest of the customer base in an area. I think that'd be very interesting to see. The other piece that I think is really important

and is lost on some of the community that's very much concerned about the environmental impacts of energy generation are the best technology that we know now, an established technology. And of course, in the emerging of the small modular nuclear, it's still kind of emerging. We have testbeds coming out.

But understand that of our non-carbon-based energy generation fuel sources, nuclear provides the best opportunity for the power needs we have. And that's a direction we need to be going in. I can argue to you without a lot of effort that the revenues to the power companies provided by data centers is providing the capital resources and the ability for them to go to market to borrow the funds to develop this new technology and to install it. It requires billions of dollars. I think the capital deployment side of what we are doing is when you start to add up the numbers, it's kind of scary.

I mean, the numbers are massive because it's all downstream, right? Hey, we start with giving you an application or a piece of functionality on your phone or on your computer. But as you backwards, still all the way back to power generation, the capital required to get that sufficient power is enormous. And the big guys, you already referenced multiple nuclear weather works, bringing mothballed facilities or aged facilities back online. Think of the Susquehanna AWS project, whether we're talking about SMRs, think about Google and Microsoft talking about nuclear projects or already having signed nuclear deals. It's coming. It is. I think the way we get, I'm just 100% in agreement with you, the way we get sufficient carbon neutral power for this industry

is we got to get nuclear to go faster and get online sooner. Our industry is already doing builds in 27 and 28. I mean, we're contracting out that far. And that gives us, I think, time to transform how quickly we can bring nuclear generation onto the grid. You know, one of the things that I would like to hope that we are doing as we are studying this from an engineering perspective and a basic research, basic physics research, is can we use this capital to actually explore the way we even do nuclear? I mean, nuclear has this radioactive waste out of it.

That is a direct result of us intentionally choosing plutonium in our early research, but we were trying to build bombs. We weren't building energy generation, right? And there are other types of materials that we don't have the developed science on that might offer something better, you know, thorium or something like that. And it's not been developed and maybe it's not broke, but the sheer capital investment that represents the power consumption of data centers and indeed that broader data economy that is emerging could drive that.

And with some government investment and support in it, just think if we can answer that big question, how do you reduce the nuclear waste component of nuclear power? And if you get to that, boy, we've got some real opportunities. Yeah, you kind of take away the real, the only real stigma about nuclear of, hey, what do we do with this highly radioactive waste? Although today, currently relatively small, it's still a concern. If you take that concern off the table, because it's proven to be incredibly safe around the world, despite the hysteria in the US over the last 20 or 30 years. As I'm sitting here thinking, Terry, I think we're commissioning

a study as we talk. Getting a study that helps understand how increased data center demand and increased data center spending on electrical infrastructure, on grid infrastructure, whether at the generation transmission or distribution level, how is it impacting individual consumer customers of those utilities would be a fascinating thing to understand. You briefly mentioned, I'm sitting here thinking, that'd be kind of cool to see. I don't know how we go about commissioning such a study, but I think there's real interest and value in understanding instead of, hey, just the data center is using a lot of the power, understanding how much of the infrastructure the industry is funding. Well, the other piece of

this also, and we've talked about a lot of the power, and that certainly that is still going to grow exponentially like the data demand. Look, you're not, nobody is building a data center for which there is not demand. That's right. Right? That's right. So this is in response to what the market is telling us we need to better run our economies, this access to data, the use of artificial intelligence. I'm not sure what chat GPT does for us yet. But let's just say the basics of machine language and machine learning type of processes. But I also, there's an effort that I'm involved with. I was brought in as a policy person

with our engineering school where we're putting in for an NSF center that would focus on, for lack of a better term, green data centers. And what does that mean? And it's do it both ways. Are there better energy sources, better way of doing that,

more efficient ways to do grid distribution, the use of microgrids, how does that connect, what's all of that. And the second is, how can data centers become more efficient and more neutral in their impact in their immediate micro climates? And all of this is up. Your company does some things that has worked on that with fan designs and things that we've talked about before. But the other thing is that you think you go at this problem from both directions. You know, what's the best siding for a data center that mitigate some of these,

you know, some of the spillover effects? Of course, I always do the thing. We did some research here in the locality in Northern Virginia, because there was all the angst about, oh, if you put a data center next door, my kids can't sleep, my life is destroyed, my property value goes down. So we actually examined all of the home sales in a single year, 2023, over 6,500 home sales. And we looked at whether or not proximity within a quarter mile of the data center actually matters, and it doesn't. Interesting. So you looked at the trend of the sale price. What did you guys compare to reach that conclusion? So what we did was we looked at all the home sales, and then we did what's called hedonic price modeling. So we looked at all the characteristics of the home, how big the lot is, how old the home is, how large it is, proximity to highways, proximity to downtown, airports, all these different characteristics of a home that help explain its price.

Now, we didn't get 100% explanation. We explained about 88% of the variance, which in statistical modeling is pretty good. Right. That's an important fact. Now, we're going to continue that work, hopefully, in other communities. And some of them have had more back and forth about their land uses, you know, and stuff. And, you know, you can kind of see some stuff. But one of the key things that kills me about these in these meetings, people say, oh, well, look at all that bad stuff.

It's going to be, well, if it's being built on industrial land, the question is, okay, if we had found a negative impact on the values, if that had been the case, the next question would have been, was the impact any worse than any other industrial use? Yeah, compared to another industrial. You mentioned it earlier. Do you want a Walmart distribution center that's running 400 trucks a day in and out of your neighborhood? 24 hours a day. Yeah. 24-7. I mean, there is industrial uses and you got to choose. Do you want a manufacturing facility that builds cars? Do you want a facility that makes tires? I mean, there are other industrial uses that I think we could clearly see have multiple layers of impacts, whether it's environmental or just sheer traffic, right? I mean, it's interesting. And at the end of the day, I mean, the reality is we're not going to have

fewer data centers, right? People aren't giving up access to their, you know, I joke with people, I'm like, hey, if you want fewer data centers, I'll just give you a list. Tell me what on this list you want to do away with. You want to quit using Netflix? No problem. We can shut down a few data centers if we just quit using Netflix. You want to quit using YouTube? No problem. You want to quit using TikTok? No problem. They lose that connection that, hey, I'm sitting here streaming Peacock or Hulu. That's happening in a data center somewhere, and it's coming over some fiber lines. all that infrastructure got built for you to deliver that experience and connecting that emotional connection to that experience. I typed in Uber Eats and some Chinese food showed up. I get to order my pizza hut online and it shows up. All that happened in a data center somewhere. And I think folks don't make that

connection and don't see that infrastructure is vital to the way we all live our lives every day now. It's hard for me sometimes to remember how I lived my life before I had an iPhone. And I think there's a lot of us that way, right? There's so much that happens on our device now that I don't remember how I did it. Yeah, well, there's much of what I do in my work now. You think about it, how was it done? Well, I remember how we did, and I just remember it taking a lot more time and being a lot harder

to get done, right? Yeah. But part of this, and I'm going to go back to just this, this overarching theme that where we stand is at the cusp of the economy is changing. This is the new industrial revolution that we are in the beginning phases of now. Here, here. If you want to call it the data economy or whatever. And I think it is so important for us to understand that that change is happening. I mean, we can still, if we want to, we can produce buggy whips and there will be some small market for that, you know, well in the future. Well, the modern equivalent, we can still produce some things and regional economies can kind of limp along, but they will of that will be constrained because they won't have the tax base and the job base to support these kind of, you know, public amenities. And so I think it's really

critical for us to understand, you know, the tide's coming in, you can surf with the tide, or you can try to swim through the waves against it. And which way gets you beat up and which way do you have a lot of fun? Yeah, yeah. Which way is more fun? All right, I'm going to put you on the spot. So you've been advising regions and advising municipalities on how to be competitive. Can you think over your career, I'd like to hear if you're willing, two stories and you can change the names to protect the innocent. The coolest project that you thought, wow, they really got it and they attracted this thing or they made this decision. What was the most intriguing project? And then I will admit to having done business with government entities before, there's always a comical story here or there. If you have one that's funny and we don't

want to impugn anybody, but an intriguing development story and a funny development story, if you have one of each, that would be awesome. Get people to understand a little bit more what you guys do. Right. So I've been involved in economic development for a long time now. And instead of thinking, I don't get super excited about specific projects though. I mean, you know, because it's a piece of infrastructure, a reservoir, whatever, a utility plant. But when we do a strategic plan for a community that they then implement, we've helped shape them. We've given them a direction to go. They do the work of going

in the direction. But I look and go back later, five years later, 10 years later, and I can see that that community has grown. There are people who have gotten jobs, good paying jobs to support their family based on the work we help them do. And that's the cool part of what I do. That's why I still do it, you know, because that's fun. Kind of the funny thing is there are always forces in economic development that are the ones that are all of the logic. And then you get this decision that's sometimes hard to explain. Right. And so when I teach courses in economic development, I always wait till, you know, we've covered theory that goes back 250 years up through and modern practices and the way it works and the way you do the analyses and all these. And I wait till the end of the semester to tell them, of course, the number one factor for a corporate headquarters location is whether or not the CEO spouse wants to live there. How far is it from the boss's house?

Exactly right. You know, and and, you know, and so one of the ones that I will tell you that's an interesting one. And I will name names in this case. But if you think back to when Boeing moved their headquarters from Seattle to Chicago. Right. There were three major metro areas involved that were finalists for that. And that was Chicago, Dallas, and Denver. And of course, knowing the Dallas area, you had, you know, Ross Perot Jr. flying these guys around in his private helicopter, you know, looking at all the potential sites and, you know, they, everybody was rolling out the red

car because everybody wanted Boeing. And the, and the story from headquarters at that point, as I've been told, was that Boeing was saying, well, our manufacturing is still over there, but our major client is in Washington. So we're trying to kind of split the difference. Right. More recently, they moved their headquarters. You're recognizing now you got the guys, you know, kind of moving back to where manufacturing is.

But in case. So at the end of the day, it came down to these three. Now, I'm not going to tell you this is the reason, but there are two characteristics. The gentleman that was the head of Boeing at the time owned and loved to sail, and he had about a 45-foot sailboat, and his wife was a huge patron of the opera. Now, if you think about geography, I am not aware of any body of water near Dallas or Denver that can accommodate a 45-foot sailboat. So a little big for White Rock Lake, that's for sure. Yeah, that's right.

It's two Dallas guys. White Rock could not handle a big boat. No. No. And if you think about it, all three of these cities have good operas, but probably not as good as the Chicago Metropolitan. For sure. And nobody a water that looks like Lake Michigan.

Yeah. So, you know, was that the absolute reason? I, you know, who knows? It's just an interesting, you know, little thing of the way you think about it. What it still means, though, is that when we're doing this work a lot of times, Raymond, it's not like massive shifts in what's going on. We're trying to tweak the margins and get trajectories to go back into a growth phase versus a declining phase. And so, you know, and it takes a while. And these plans, there is no magic sauce in all of this. And a lot of it is,

how do you structure your economy? And of course, in a lot of it now, what is so different now than the old industrial site location that we did? Now it's all about people don't move to jobs. The jobs move to where people want to live. Right. So so there's such a big piece. And of course, we you know, we could have a conversation with Buddy and, you know, and he and he could, you know, and there'd be pieces of agree.

But let's just say that for purposes of fun, we'll just say that, you know, now the biggest piece of it is, can you attract and retain the talent that you need to attract the industries that are growing? Yeah. Well, I got to say, Terry, I feel another podcast coming on where we have me and Buddy. That would be a fun conversation to do. Any conversation with the great Buddy Reiser is fun. For sure. Sure. And I always like getting him on a podcast because it gets him back to his broadcast days. I like to get him to tell his radio story days. Those are always fun. All right. So I do want to summarize, though, a couple of things you said that I think is huge. I said, hey, tell me an intriguing story. And I loved what you said that at the end of the day, as these regions and municipalities think about what they're doing to attract industry, they're providing tax base to provide services to their community, but they're also providing jobs. I mean, people's lives get changed by new jobs that show up. And I think that's one of the messages the data center industry would like to broadcast, hey, as we grow these platforms and as more and more workload comes into our buildings, we need skilled professionals to run them.

And those are high paying, technically centric, really good 21st century jobs. And that's changing people's lives is giving people places to work. And I think that's crucial to a region or to a municipality when they make those decisions. If I might, I will tell you one of the ones, it's the most, you know, one of the most exciting things I've heard recently. And it was at a local hearing about this data center issue on regulations here in the Northern Virginia area. And a person from the International Brotherhood of Electric Workers stood up and talked about that in our region, unlike most regions of the country, we had added a lot of jobs as electricians, you know, certified master electricians. And then he got to talking about the apprentice and they're doing so well and their dues basis, that they're running their

own apprenticeship program. So think about taking a kid coming out of high school who has no interest or maybe financial ability to go to college. You enter this apprenticeship program. You work four days a week. You take classes at a community college the fifth day. As you go through this program, you actually get exposed to entrepreneurship classes. So if you ever instead of want to be the worker, you want to be the boss, you know, kind of thing. And in four years you finish this program and you are a certified electrician, your starting wage and benefits equates to $87 an hour. So you have a high school kid who doesn't go to school who can be earning in, you know, 160, 180, you know, 180,000 a year. And one of the

key things is in our region with higher, higher housing costs, you have a person that at the very early stage of the career, they're earning enough money to be homeowners if they want to be. Right. Right. Yeah. So key that this development leads to jobs and enhancing people's lives. And the second key is figure out where the CEO's wife wants to live. Well, no, no, no, no. We got to remember, Raymond, we got to say the CEO's spouse because a lot of our best companies now have gotten smart enough to have women rhyming in them. That's right. That's right. That's exactly right. That's exactly right. Well, Terry, thank you for the conversation. It's fun to have you and good to see you again. I do really want to make sure that we

do the next one at the end of your dock at your boat. We got to figure out how to get the signal and do the recording there. We'll do, maybe that's the one we do with Buddy. We do it on your boat. We can do that. And I do have the cell phone signal booster on the boat already. So I've got Wi-Fi on. Perfect. That's perfect. That's perfect. And my team will hate me for it because the background noise, but it'll be fun for us. It will be fun for us. And that just means that, you know, it's a matter of the right kind of dinners that you take them out to. That's right. That's right. And the experiences they get to enjoy. That's right. That's right. That's exactly right. Terry, this has been great. Thank you so much. We look forward to talking again soon.

Thank you.