The Flagler Beach City Commission will not grant a data-center company a perpetual easement over almost a third of Veterans Park in the heart of the city as a landing point for undersea internet cables. The easement would have prevented the city from putting that part of the park to many public uses, just as a convenience for the company, DC Blox, which could achieve its aims by building a landing site elsewhere, but at greater expense to its bottom line.
The company was attempting to save money at the city’s expense. City commissioners explicitly called out the scheme, tabling the proposal until DC Blox returns with a feasible proposal to use South 6th Street as a landing site, without disrupting the city-owned parking lot there or compromising its future value to the city. A second landing site on 11th Street is drawing no opposition, because it runs through a public street and the parking lot of Santa Marial del Mar, the Catholic church.
The city is also directing its consultant, an attorney, to negotiate fees with DC Blox. The city is also interested in replacing a perpetual easement with a term-limited easement. (It is very unlikely that undersea cables will be perpetually part of the internet’s backbone as the technology goes skyward to satellites.)
“I’m not hearing anyone express opposition to the project I’m not hearing that at all,” Commission Chair Scott Spradley said. “We’re talking about preserving one of our busiest and most cherished asset, which is the park, and secondarily the city parking lot. So it’s not the project itself. It’s just trying to find the right place.”
It is also still unclear how much the company will pay the city for easements. It was proposing a paltry one-time, $100,000 fee for each of the cables that may link to its landing sits, with capacity for up to eight, though a company official said it’ll more likely be five or six. Some commissioners find the offer too low.
DC Blox, through its local subsidiary, DC Orchid, is planning to build a large data center in Palm Coast’s Town center, a project it has been working on, secretly, with Palm Coast and county government, with the complicity of both to keep it all secret under a provision of state law that gives companies that option. The data center would be the end point of up to eight undersea internet cables, which are part of the backbone of the global internet. The center would then fan out that data on the mainland.
Company and Palm Coast officials claimed the center would be greatly beneficial economically. In fact, it would employ only a handful of people. It could be greatly beneficial to the city as a tax revenue source, if Palm Coast had either a utility franchise fee or an electric service tax. Since the data center would very likely be one of the city’s largest, if not the largest, consumer of electricity, its service tax or franchise fee tax would also be among the largest. But Palm Coast has neither an electric franchise fee nor a service tax, and four attempts to enact one or both have failed since 2011. No such attempt appears likely to pass in the near future, unless voters approve in a referendum. No such referendum is scheduled. All of which makes the future data center all but an economic non-entity for Palm Coast, the company’s and the city’s chest-beating bluster aside.
Nevertheless, city and county officials have been pressuring Flagler Beach officials, through back channels to get out of the way of DC Blox and approve its easements, while DC Blox’s own company officials have been lobbying city officials behind closed doors. The company officials have not been shy to end-run around the elected officials and use city staff to their purposes–until they were told on Thursday that nothing city staff does matters until it is ratified by the commission.
City commissioners could not understand why the company would not find a location for its second landing site that would be less disruptive than upending Veterans Park.
Chris Gatch, executive vice president of DCB Orchid, tried to make the case Thursday in only his second appearance before the commission since the end of March. He told the commission of the millions of dollars in investment ahead, of the “long time” he’s spent negotiating with the administration, and how city staff’s preference was for using Veterans Park, not South 6th Street. There would be no road closures there, though he said at least one lane of 6th street and a good portion of the 6th Street parking lot would have to be closed for three to six months of construction, much of which was news to commissioners.
There was audacity verging on arrogance in Gatch’s remarks. He was asking to use public rights of way and disrupt public property, yet he was using pressuring language that made it appear as if the city were an obstacle to something his company was entitled to: “We’re willing to be flexible,” he said, as if that were a favor his company was extending the city. “The timing for us is very important. We’ve been working on this for a very long time with the city,” he said. “And we’re approaching a point where timing is very important for us. We have prospective customer requirements that need to be constructed in this landfall.”
Jeff Uphues, the company’s CEO, took a more condescending approach, describing himself as a “small town guy” then lecturing the commissioners about what he learned in school in Iowa (“you got to build trust with people, internally and externally, no matter where you go”) as if what they had learned in school or how they exercised their responsibilities on the commission were somehow different. “You have to communicate with transparency,” he said, a startling statement considering his company’s insistence on secrecy whenever it could.
Commissioners didn’t let the verbal manipulations affect them, maintaining cohesion throughout, especially in representing what they anticipate to be public concerns.
Cooley wasn’t interested in the big money figures Gatch threw around. “That’s that’s not what this conversation is even about. We don’t need the money in the water with that,” Cooley said. He was equally skeptical about Gatch’s claim that the city in any way had a preference for Veterans Park, if it had not come before the City Commission. As it had not. The administration, he said, does not speak for the commission without commission direction. The bottom line, he said, was that the Veterans Park location favored DC Blox because it was DC Blox’s most direct and cheapest route to the ocean. “However, there’s many many other options that are not as direct and require more construction,” Cooley said, “that favor the city.”
As for DC Blox’s presumed flexibility, he said the company keeps returning with the same option, which does not indicate flexibility. Veterans Park, he said, is a park for memorials. An easement on a significant portion of the park would end that on that portion. “If you approve an easement, you can do nothing essentially, but have grass or some shrubs as long as the roots don’t interfere,” Cooley said. “So you’re taking a third of the park and making it unusable.” (Gatch minimized the limitations on the city’s uses of the easement area.)
Commissioner Rick Belhumeur was also skeptical. “You said you had brought this to the city a year ago. None of us had heard a word about it” until late March or early April, Belhumeur said. “As far as using a third of Veterans Park I’m 100 percent against it for all the same reasons that Eric has, plus a couple of others.” The city is planning renovations in the park, and has an irrigation system there, along with underground cabling. Commissioner James Sherman and Commission Chair Scott Spradley also had reservations.
Spradley wasn’t particularly opposed to the Veterans Park location, considering that the park had recently been slated to be a construction equipment staging area for the beach renourishment project. It would be temporary. But if less disruptive alternatives exist, then those should be explored, in his view. (In fact, the beach renourishment contractor changed the construction staging area to a parcel at the south end of the city for that very reason.)
“Six street in the right of way was a heavy conversation the last time around,” Cooley said, recalling that when the plans entailed using the street itself, without encroaching on other public property, was not as much of an issue. Mayor Patti King concern is how that would affect two restaurants in the area.
None of the commissioners is opposed to the project. They like it. The company’s methods or offers have not been as attractive. “We’re just trying to get our fair share,” Sherman said. “You’re coming here, and you’re running cable lines through our town, and we want to be sure that we’re taking care of.” Palm Coast and the county are getting their share, eventually, he said. The city? Not so far.
“I felt the board really worked together in expressing our views and those of our residents,” Spradley said this morning. “I was proud of how we were able to debate the issue and then come to a consensus, especially since the views of the commission members are similar but different. I feel that we delivered a strong message to DC Blox and our neighboring governmental units that the best interests of Flagler Beach are critical for this project to become a reality. But at the same time, we are not opposed to the project, per se. We just need to be a part of the discussion and not the recipient of decisions concerning the future of Flagler Beach, made in our absence. I feel we succeeded in giving DC. Blox some direction rather than just stonewalling and saying no to their ideas. Hopefully this will result in a productive meeting the next time the issue appears on the agenda.”
