A $30 billion proposal for Amazon Web Services to build data centers in Frederick County fell through last year, in part because Amazon and the county government couldn’t reach a deal on the project schedule.
Several Frederick County officials familiar with the proposal who spoke with the News-Post on condition of anonymity said the project would have brought data centers — high-security warehouses that organizations and businesses use to store and process huge amounts of data – to at least three communities in the southern part of the county.
Officials, however, said Amazon was asking for too much, too soon. While one official said the proposal was aggressive but workable, several called Amazon’s terms “almost impossible” and “impractical”.
When the county tried to negotiate, Amazon walked, county officials said. Amazon public relations officials did not respond to numerous email requests for comment.
A campaign spokesperson for Republican gubernatorial candidate and Frederick County resident Kelly Schulz — who at the time of the talks was Maryland’s Secretary of Commerce — said “the capital investment of nearly $30 billion dollars from Amazon would have been one of the biggest projects in the state’s history.”
The roughly $30 billion investment would have lasted 15 years, said state Department of Commerce spokeswoman Karen Glenn Hood — a substantial investment for a county that has an annual budget of about $700 million. of dollars.
“The state, led by the Maryland Department of Commerce, has done everything in its power to support this project, including bringing together a number of state agencies to ensure proper authorization and coordination,” Glenn Hood said in an email.
“It is truly disappointing that this project is not coming to fruition, not only for the citizens of Frederick County, but for the entire state of Maryland,” she said.
A Frederick County official said Amazon seemed to underestimate the complexity of the process the county usually follows for development projects, including opportunities for public engagement if a proposal goes ahead.
The county’s calendar has been constrained, in large part, by this year’s elections for county council and county executive. The county code prohibits zoning changes within six months of the end of a term, which means officials would have had less than a year to complete the necessary permits, planning and rezoning for Amazon to inaugurate new facilities.
“The proposal being discussed would have required the county and county council to engage in a very aggressive plan to consider changes in various areas of the county code,” members of the Frederick County Council said in a statement prepared after breaking open meeting rules while discussing. the case in August.
In response to the Department of Commerce and its former secretary, Frederick County Executive Jan Gardner (D) said Schulz’s comments were “both surprising and a poor reflection on the state’s ability to comply with legal obligations regarding business confidentiality”.
“Ultimately, commercial announcements and a company’s decision to locate here are made by the company itself to achieve its goals,” said Gardner, who is term-limited and will leave his post. after the November elections, in a prepared statement.
Frederick County officials said the sales pitch for Amazon Web Services to build the data centers was the amount of tax revenue the project would have brought to the county.
Neighboring Loudoun County, Va., home to about 70 Amazon data center facilities, expects more than $500 million in tax revenue from data centers this year, with Amazon contributing the bulk, according to the Loudoun County Economic Development Director, Buddy Rizer. .
Glenn Hood, Maryland’s commerce spokesperson, said Amazon was particularly committed to building data centers in Maryland because of a state bill passed in 2020 that created tax exemptions for companies that establish data centers. She said the tax credit program “was specifically created to attract projects like this.”
In June, Texas-based Quantum Loophole announced plans to purchase more than 2,000 acres of land near Adamstown. It is not yet known how many data centers will be built on the property. Quantum Loophole spokeswoman Ilissa Miller estimated that 15 data centers built over 15 years could result in an investment of around $3 billion, or one-tenth the capital investment Amazon would have made on the market. same number of years.
Some preparatory work for Amazon’s proposal had begun before the deal fell through. Frederick County officials said realtors, on behalf of Amazon, have spoken with landowners in Urbana, Brunswick and Adamstown about selling their property.
A number of county officials, however, said they only learned about the proposal shortly before the two sides met in a closed meeting on August 16. It appears the county has been meeting with Amazon for quite some time at this point, they said. , which is normal for county development proposals.
According to minutes of the August 16 meeting, Frederick County officials and staff met with Amazon personnel representing economic development, real estate acquisition and development, environmental policy, and environmental departments. public policy.
In November, the Maryland Open Meetings Compliance Board, part of the state attorney general’s office, ruled that Frederick County officials violated the state’s Open Meetings Act — a law that requires government agencies to meet publicly but allow certain confidential discussions, such as meeting with a company looking to locate or expand in the state.
The Compliance Council’s decision said Frederick County officials provided ‘no meaningful information’ about the topics discussed in camera as part of its meeting summary and failed to keep adequate minutes. in camera.
Compliance board notices don’t come with penalties, county prosecutors say, so government agencies that violate the open meeting law are simply required to acknowledge their violation and provide a summary of the board’s notice. board at their next meeting.
In a prepared statement released weeks after the Compliance Council decision, the seven members of the Frederick County Council – who attended the August 16 meeting – defended their decision to go into closed session, pointing out that ‘No votes were taken or no motions were made and the county is trying to honor requests for confidentiality.
Brunswick city officials — an area of interest for Amazon, county officials said — met behind closed doors a day after the August 16 Frederick County meeting.
In a notice issued in January, the Open Meetings Compliance Board found that Brunswick also violated the Open Meetings Act, among other things, by failing to provide an accurate record of everyone present at the meeting.
A list of those present from the minutes of the meeting included Mayor Nathan Brown, the six members of the city council and a number of county employees, although there is no mention that the staff of the company in question was also present. The minutes of the meeting say the city met to “discuss a possible business location in Brunswick.”
Brown declined to say how many people outside of city staff attended or what businesses they represented, and city council members declined to comment further.
“We were working to begin public discussion and process,” Brown said in a prepared statement at a January town hall meeting. “We regret that due to issues with this company and other government agencies beyond the City of Brunswick, all discussions have now ceased.”
Amazon has a reputation for secrecy in its dealings with local governments and in particular for its use of nondisclosure agreements. These practices received extensive media coverage during the company’s search for a second headquarters, HQ2, part of which will be in the Crystal City neighborhood of Arlington, Virginia, about a hour drive from Frederick.
Members of the Frederick County Council said they were not asked to sign a nondisclosure agreement, but could not speak publicly about the proposal because they were prohibited from disclosing any information. information discussed behind closed doors.
County spokeswoman Vivian Laxton did not say whether county staff were bound by a nondisclosure agreement to enter talks with Amazon. She said in an email that it’s common for a company to want its plans kept confidential when entering into discussions with the county.
If a proposal fails, Laxton said, county officials are still required to keep information about it secret under Maryland’s public information law, and county and Brunswick government officials remain bound by their meetings behind closed doors.
In the weeks following the closed meetings in Frederick County and Brunswick, local nonprofit Envision Frederick filed a Public Information Act request seeking any nondisclosure agreement. that officials could have signed as part of their discussions with Amazon.
The county governments of Frederick and Brunswick denied the claims. Under Maryland law, agencies can refuse to disclose documents containing confidential information about a business proposal.
Since August, rumors of Amazon’s proposal have spread on social media and in some county circles. A number of public officials have expressed to the News-Post their desire to speak freely on the proposal to set the record straight. Among them was County Councilman Kai Hagen.
“It would be my personal preference if the public could hear everything that was discussed,” said Hagen, a Democrat running for county executive. “It frustrates me that I can’t speak as openly, completely and directly as I would like.”
Follow Jack Hogan on Twitter: @jckhogan