DC Blox, the Atlanta-based data company working with Palm Coast to open a data center there, is about to face stiff resistance from some Flagler Beach City Commissioners as it seeks a permanent easement through Veterans Park, one of the city’s iconic treasures.
City officials are all for DC Blox’s aims. The company’s data center will be the ultimate landing point for up to eight undersea cables that are part of the global internet’s backbone. But the officials are not happy with the choice they’re being given at Veterans Park, the paltry, one-time compensation the city is being offered–$100,000 per cable landing–or the way DC Blox has attempted to keep negotiations out of the public eye, especially about money.
“Categorically, 100 percent I’m against for so many reasons,” Commissioner Eric Cooley said.
None of it would be an issue, Cooley said, if the company was willing to use public rights of way like streets or sidewalks instead of the park or, previously, a city-owned parking lot on 6th Street, which commissioners have already rebuffed. But DC Blox is choosing Veterans Park because it’s the cheapest option for it, he said. (See: “Company Planning Huge Data Center in Palm Coast for Undersea Internet Cables, But Flagler Beach Trips Over Easements,” and “Data Company Wants to Use Veterans Park to Land Undersea Cables; Flagler Beach Wants Appropriate Payment.”)
The company has a lot of other locations to choose from, from the Wickline Center area to the city’s utility building area on South Flagler Avenue to “all kinds of places,” Cooley said. “For us to pick the absolute worst place to put it is I guess what has me so up in arms, because we’re turning places that have a lot of meaning to the city to make it convenient for someone to run cables. That doesn’t make sense.”
It’s not about the money, Cooley said, but the perpetual easement in veterans Park that will prevent the city from using what amounts to close to a quarter of the park for its intended uses. The easement DC Blox is seeking runs in a swath along the the entire northern segment of the park, and in a larger swath along half the western segment. The easement language is explicit: it applies “upon, over, under, within, through and across, and right to use, those certain portions” of Veterans Park. “This shall include not placing permanent structures within the Easement area or planting trees/shrubs with extensive root systems.”
That’s the kind of language that has Cooley rankled, along with and Commissioner Rick Belhumeur. “They want to much of it, Belhumeur said. “If they could build it in the road on the north end, why can’t they build it in the road on the south end? Why does it have to be in our most popular park?”
The company is also seeking an easement at on rights of way parallel to Santa Maria del Mar Church, with whom it has a separate agreement to use parts of the church’s parking lot. Commissioners welcome that easement, since its public portions are entirely beneath streets, and its private portion is between the company and the church. The city would get a one-time, $100,000 fee for up to four cables there, too.
Cooley in his one private meeting with a DC Blox representative says he repeatedly asked whether the company could build its infrastructure along streets. Yes it could, he was told repeatedly. But it’s cheaper this way. “This is just simply a convenient move for them,” Cooley said, “which I’m kind of beside myself on how this even got traction on how we got away from putting utilities in the right of way and putting them in veterans Park.”
Officials are especially resentful of pressure from Palm Coast officials either to sign off already or to make them look like Flagler Beach is standing in the way of a clean-energy, forward-looking project it’s been cultivating for well over a year. In fact, the Flagler Beach officials say, there is no opposition to the project–only to the city being taken advantage over some of its more prized properties, when DC Blox could pay a little more and have any right of way it wants.
Commissioner Jane Mealy is not opposed to an easement at Veterans Park, but only as long as the effects are limited, and ultimately barely visible.
“My concern is that the park or 11th Street or wherever they do it look as it does now, particularly the park,” Mealy said. “If we give them the north side of the park and they tear it up, that it looks the same as it does now, except for a manhole cover, which I believe is to go on the sidewalk. I don’t see where we’re losing anything by having it there if our park is not destroyed and if 11th Street is not destroyed.”
The company has described its use of Veterans Park as amounting to what would look like a manhole cover when all the work is done. That’s not so, Cooley said. It will be an 8-by-10 foot room underground. “This is a very large room, and then you have these huge grounding ‘lines,’ it’s not the correct word, but you have to run these huge lines all throughout the park, and you cannot put anything on top of them,” he said. The lines will, in fact, run along the northern length of the park, underground, but construction will disrupt the park–initial construction, as well as every time a new cable will land, up to four.
City Manager Dale Martin hired Jupiter attorney Michael Tammaro, who has worked in related projects, as a consultant to advise the city on the proposed contract.
“Once easements are conveyed, the city’s use of the property subject to the easements is limited; the city could not interfere with the uses granted by the easements,” Tammaro cautioned.
In terms of compensation, the attorney’s findings lent credence to commissioners’ sense, already expressed weeks ago when the company’s proposal was first unveiled, that DC Blox is more than lowballing the city. Cooley calls it “strategic lowballing.”
According to Tammaro’s analysis, in 1998, AT&T built the city of Hollywood $770,000 to $1.1 million worth of sidewalk and other improvements, in current dollars, in compensation for laying out AT&T conduits. In 2000, an undersea data cable company paid Boca Raton $500,000 and a recurring $185,000 a year, in current dollars for a landing easement. A private property owner in the city of Sunny Isles was paid $950,000 by a telecommunications company for an easement for three conduits, or cables. Naples is currently considering an offer from a different cable system operator of $500,000 for an initial landing site and $500,000 for each additional cable landed at the facility. Naples is also considering limiting the easement to 25 years.
That contrasts with the $100,000 per cable in Flagler Beach, with no recurring fee but with a perpetual easement over almost a quarter of the city’s most visible park, and no such recurring revenue as the city gets from FPL, for example, for using its rights of way (the city earns $390,000 a year from the utility franchise fee), another $550,000 from the utility service tax, and another $200,000 from the community service tax levied on phone, cable and satellite television companies. None of which DC Blox would pay. (See Flagler Beach’s current general fund revenue broken down by sources here.)
The benefits of an operation such as DC Blox’s to undersea cable operator (the cables are usually installed by tech giants like telecommunications firms, Amazon, Facebook, Google) are considerable, the city’s consultant found: “The purchase of an existing conduit by a proposed communications project eliminates the need for feasibility studies, site acquisition, land use approvals, state and federal permitting and construction of a landing facility, a time consuming, expensive and potentially risky process. The owner of such surplus conduits can also market access to an existing CLS, Data Center or Internet Access Point (“IAP”). Although difficult to assess precisely because of the multiple variables involved, based on available information regarding conveyances occurring in California and Florida, the willing buyer/seller value appears to be between $2.5 million to $5.5 million per installed conduit.
Drawing on experience from previous projects involving public property, Tammaro listed numerous potential concerns, including “Encumbrance of valuable beachfront property with little perceived public benefit,” inconvenience to residents from noise and vibration during construction, road or lane closures, possible damage to other underground infrastructure, and complaints going to elected officials. The consultant also noted concerns with permanent, as opposed to limited, easements, interference with turtle-nesting season, and the possible inadequacy of a one-time payment, as opposed to recurring payments.
“Recent examples include the Town of Palm Beach declining to consider an AT&T request for landing a new system at an existing landing site, citing inconvenience to residents from fronthaul work,” he wrote, “and Lee County declining the request of a proposed international system to purchase easements to install two conduits, citing the ‘inherent value of the subject park/beach property.’”
On several occasions DC Blox officials have asked to meet individually with city commissioners, and have carried on negotiations with city staff, to stay out of the public eye. That has rubbed even Mealy the wrong way.
“It reinforced with me that they’re not used to working with a government,” Mealy said. “Dale [the city manager] was telling me they just wanted to do the negotiating with staff, and staff would bring the end results to us.” The DC Blox representative, she said, “didn’t want to put up with the meeting with the rest of us tomorrow night.”
DC Blox is getting that secrecy from Palm Coast officials. It’s not getting it from Flagler Beach. “It’s not right for the public to not hear what we say,” Mealy said.
Cooley had agreed to meet with a DC Blox representative individually once. When the company requested a second meeting, he declined. ““We’re not going to have backroom discussions, especially if it involves money. We’re not doing that,” Cooley said. “Because what you’re doing is pulling commissioners apart and asking them what it takes to buy Veterans Park.”
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