Barton-Garcia: Data centers are coming. Here’s how communities can negotiate for local benefit.

Across the country developers are seeking new areas to build AI data centers. The scale is unprecedented, with the Top Four AI companies — Microsoft, Google, Amazon, and Meta — and other developers pouring billions into facilities with footprints as large as 70 football fields.

As these projects proliferate, so does public pushback. Communities nationwide are organizing to resist data centers out of fear that their harms will eclipse any benefits. 

Meanwhile economic development leaders eye the growth potential these projects can bring to rural communities.

So should communities just say no? Welcome these projects with open arms (and generous tax breaks)? Or is there potential for a win-win agreement? Whatever decision a community ultimately makes, the most important thing is to get informed and organized so you can negotiate to leverage long-term local benefits.

This starts with understanding the potential harms and benefits and identifying where the community’s interests converge with those of AI data center developers.

Opportunities and risks

Potential benefits include:

• Property and sales tax revenue
• Short-term construction jobs
• A smaller number of permanent technical jobs 
• Investment in industry-supporting infrastructure (electric, water, telecom, construction)
• Investment in digital skills and AI-ready workforce programs
• Investment and integration in the local and regional tech ecosystem

But there can also be real harms:

• Massive power demand (data centers can use as much electricity as a mid-sized city)
• Heavy water use for cooling (50% in the US are located in water stressed areas)
• Noise pollution from constant humming of equipment
• Air pollution from backup diesel generators
• Pressure on local grids and infrastructure
• Risk of tax incentive “races to the bottom”
• Limited transparency in negotiations

Strike a bad deal or miss the opportunity for a negotiation, and communities are left to shoulder these infrastructure burdens while seeing just a miniscule portion of the upside.

A practical tool: Public Benefit Agreements (PBAs)

One of the most effective tools available to communities is a Public Benefit Agreement (PBA) or sometimes called Community Benefits Agreements (CBAs). A PBA is a legally binding agreement negotiated between a developer and local government with meaningful representation and input from a coalition of residents and community organizations (can be a multiparty negotiation). The goal is to ensure development aligns with local priorities. In exchange for project buy-in and facilitation, the company commits to specific, measurable community benefits. Done well, a PBA can maximize community benefits and ensure that local people aren’t holding the bag while data center developers and AI companies reap all the benefits.

What questions should you ask?

Before offering incentives, approvals, or public support, local leaders should ask clear, diagnostic questions.

Utilities and environmental impact

The first step is to reach a shared understanding. Do sufficient electric and water resources exist now and in the long term (or can they be responsibly developed) without forcing the community to compete for those resources? And will the data center pay its fair share of the costs?

Key questions include:

• What is the projected electricity and water demand — now and at full build-out?
• Who pays for new transmission lines, substations, water infrastructure, or other upgrades?
• What conservation technologies will be used?
• How will noise, emissions, and other environmental impacts be mitigated?

Policy context is important here. For example, Texas now requires large-load customers, including data centers, to bear upfront costs for transmission lines directly connecting to their facilities, providing an important protection for ratepayers (see discussion in Rio Grande Valley Broadband Coalition slides). Communities should find out how infrastructure costs are allocated and whether additional safeguards are needed.

In states with “Rule of Capture” water laws, local leaders need to consider whether rules need to be changed to protect well-water security for all customers.

Jobs & Workforce

Detailed workforce information allows communities to align local credential programs with demand and negotiate support for regional workforce pipelines as part of  a Public Benefit Agreement.

Questions to ask:

• How many construction jobs will be created? For how long?
• How many permanent jobs will remain once the facility is operational?
• What are the job titles and descriptions, required credentials, and wage ranges?
• Has the company supported apprenticeships, internships, or tech ecosystem development in other regions?
• Which roles will be hired locally (fiber technicians, network engineers, cybersecurity professionals, electricians, etc.)?

It is important to get specific because vague promises rarely translate into durable job opportunities without clear commitments.

Corporate structure & accountability

Clarity about who you are negotiating with is essential for enforcement and long-term accountability.

• Is the developer a standalone LLC created for this project?
• Is it backed by one of the major hyperscalers (e.g., Microsoft, Google, AWS, Meta)?
• Who ultimately holds responsibility for long-term commitments in a Public Benefit Agreement?

This list is not exhaustive. But asking disciplined, specific questions early in the process strengthens a community’s negotiating position and increases the likelihood of securing meaningful public benefits.

What can you negotiate for?

Communities that have organized and understand their leverage, can negotiate effectively with potential developers, aligning corporate needs with local priorities by including commitments in the following areas.

1. Workforce investment

The major hyperscalers and datacenter developers serving them are in a race to bring new capacity online in a competitive AI market. Strong local workforce pipelines can help them move faster while creating high wage career paths for residents. Communities should ask for:

• Local hiring for construction and long-term operations
• Funding for fiber optic technician and broadband/AI workforce programs (see the Rio Grande Valley Broadband Coalition/City of Pharr ‘Connect U’ partnership)
• Paid apprenticeships and internships for local residents
• Partnerships with community colleges and universities
• Support for AI, cybersecurity, data science, and network engineering pathways

2. Digital opportunity & adoption 

You cannot build inclusive and responsible AI without closing the digital divide. PBAs can include support for local digital adoption efforts, such as:

• Funding for digital skills training and digital navigators that serve as entry points to high-tech career pathways
• Device access initiatives to ensure residents can fully participate online
• Investments in telehealth and small business digitalization efforts

3. Infrastructure spillover benefits

Hyperscale facilities require significant fiber capacity inside the facility and through redundant fiber lines connecting to networks. That infrastructure can strengthen connectivity across the entire region. Communities can explore commitments including:

• Installing excess dark fiber along data center routes to create public middle-mile that can serve rural towns, homesteads, and farms
• Leasing backhaul capacity to local ISPs at below-market rates, enabling them to deliver high speed affordable service to underserved communities and businesses
• Integrating the data center into the regional tech ecosystem, dedicating server capacity (i.e. compute power) for local innovation, supporting research and startups, and extending fiber connectivity to strengthen nearby business and innovation corridors
• Including “buy local” provisions for suppliers and contractors
• Revenue sharing agreements; community endowment to fund and sustain digital opportunity programs. A local foundation can manage the fund.

4. Utility innovation & conservation

Data centers are resource-intensive, but they can also drive innovation in energy and water management, if those commitments are negotiated upfront. Communities can seek provisions such as:

• Advanced water recycling and cooling technologies, and investment in innovation partnerships with public water or electric utilities
• Renewable energy integration and long-term clean energy procurement
• On-site microgrid with requirements that facilities balance their own load to avoid destabilizing broader electric grid
• Investments in local grid modernization and resilience
• Partnerships with local universities and regional tech ecosystem focused on energy efficiency and conservation R&D
• Support for local conservation programs protecting at-risk wildlife and habitats

Well-structured agreements can ensure that large-scale infrastructure strengthens rather than strains the systems communities depend on.

Community leverage

Local governments and communities are not without power in negotiations. They control critical approvals, infrastructure decisions, and public support. Recognizing and using that leverage can turn a reactive process into a strategic negotiation. Areas of leverage, include:

• Tax abatement agreements that can be conditioned on PBAs
• Zoning authority to determine where facilities can — and cannot — be located
• Public utility governance. In places with municipal utilities, utilities are directly accountable to residents, strengthening negotiating leverage
• Local site knowledge, including publicly owned parcels, shuttered malls or manufacturing sites, and locations with access to reclaimed water or existing infrastructure
• Infrastructure permits and approvals (fire, environmental, building, habitability), where compliance requirements provide an opportunity to interact with the developers. 
• A trained and trainable workforce 
• Public support and political legitimacy, which companies need to avoid delays and reputational risk

Think regionally and long-term

Data centers shouldn’t happen to communities. The AI infrastructure boom is moving quickly, but its impacts, positive or negative, will shape local economies and resources for decades. When communities come to the table informed and prepared to use their leverage, better outcomes are possible.

These projects can catalyze high-quality jobs, strengthen digital opportunity, and modernize infrastructure and resource management. But without thoughtful negotiation, they risk becoming extractive, resource-intensive facilities with limited local benefit.

The difference lies in preparation and strategy. Communities that take a regional approach, ask hard questions, align incentives with long-term priorities, and negotiate clear, enforceable public benefit agreements are far more likely to secure durable gains.

Done well, data center development can help build an inclusive economy, expand shared prosperity, and ensure local talent plays an active role in shaping the next generation of technology and AI solutions to society’s most pressing challenges.