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.”
Hammock Huck says
You’ll most likely open up “Pandora’s box” if you allow it. Be smart and hold your ground.
Pogo says
@Paraphrasing Omar Khayyam
The invisible hand of the market deals itself four aces, pockets the pot and moves on. Nor all thy piety, nor all thy wit, can get back a dime of it.
And so it goes.
Mike says
Hmmm what’s that smell?
Whole thing smells fishy.
City should direct them to the beach and tell’m to pound sand. If they can’t come up with more $$$ and a different location to bring the cables on shore.
They tells us exactly why they want to build at the park, “because it’s cheapest”.
I’m against it.
JOE D says
Now that research has brought to light what other communities are getting paid for international cabling lines …both large initial fees, and annual fees with LIMITED, not perpetual (forever) easements, where they (DCBLOX) could pretty much do whatever they like to the Park’s large proposed easement area…and (as currently proposed) once they pay their $100,000 per cable fee ( for up to 4 cables)…they don’t have to pay the City a dime afterwards ( forever for ANY reason).
The more the terms of this DEAL come to light, and the more RESEARCH being done about OTHER similar cabling projects in the area, the less appealing this project looks financially for Flagler Beach, both now and in the INDEFINITE future!
I would still encourage the Company to look for other local sites for their easements, and make a REASONABLE offer with ongoing Annual payments similar to other cable projects. I’m still trying to get the feeling out of my mind that DC Blox wanted to slide the project in the door and get the “country hicks” in Flagler Beach to quickly agree without truly KNOWING what they were getting into. Guess What?!? The Flagler Beach City Commissioners saw through it and demanded research on other projects ( thank you Commissioners), and more transparency on what we really were agreeing to ( thank you City Attorney and City Manager). This project may turn out to be a great benefit to the area (although not in jobs, since these data centers are MOSTLY automated, and run by a small group of moderately paid technicians). I’m not really seeing an ONGOING benefit to Flagler Beach under DC Blox’s current proposal.
Another MAJOR ANNOYANCE, is the pressure officials from Palm Coast are applying to Flagler Beach officials to essentially “PLAY NICE,” and just GO ALONG with the PROGRAM…given the SEEMING back room deals that have been going on in Palm Coast recently brought to public scrutiny, I see that as an even a MORE significant reason to go slow in this decision.
Lisa J Ferreira says
Interesting that a private “utility” is wanting an easement on park land… Cost and feasibility.
If their infrastructure needs repairs in a utility easement on the park land that part of the park will be torn up and I accept the public.
If their infrastructure is in a utility easement on the street they will need to coordinate with traffic control and other utilities.
All utilities should be under sidewalks or roadways to be consistent with best practices for new utilities.
Brian Ford says
The City of Flagler Beach should find a way to do this deal. That $100,000 one time payment was an initial offer. Doing this project is a way to fund beach re-nourishment projects in Flagler Beach for the next 20 years. That’s worth hundreds of dollars ($575) to each homeowner (payers of taxes) based on the Counties last (now withdrawn) tax proposal.
I believe DC Blox wants to land in Veteran’s Park because it is a City of Flagler Beach property. If they land the cable in State Road 100 then the State of Florida becomes involved. You have to figure that any cables running east west across the island are going under A1A so the FDOT is already involved. If FDOT signs off on installing the landing point under the intersection of SR100 and A1A will the City of Flagler Beach benefit at all?
One small point of correction (?). Many undersea cables are owned by major telecommunications and Internet companies. But I believe the way that these deals are structured these companies pay specialized cable installation companies to lay the cable and the telcos and Internet firms only take ownership after the cable is installed and connected. This mitigates their risk.
Olive says
Lisa, you are correct. This needs to go under a public street. This most definitely is a utility.
Deborah Coffey says
There is nothing good about a data center smack in the middle of your community. Has anyone Googled the problems with data centers…the enormous amount of electricity, water and Internet they use? Residents will go without and have continual problems! A bad idea from the get go!
Paradise Lost says
Absolutely right about that, Deborah. Does anyone know how big will this data center will be and how much noise it will generate? It’s proximity will be within ear shot of hundreds of homes, a school and a proposed apartment complex.
endangered species says
Profits over people, its the american way/
coyote says
I don’t understand why all the local authorities involved here seem to be acting like they ONLY have the offerings from DC Blox to pick through. They seem to be undecided about the options that DC Blox has given them, whereas the reality is that the locals should be setting the terms (and/or options) to DC Blox, and basically saying ‘This is what we will allow, and how much it will cost you. Which option do you want?’. WE (the local citizenry) are the sellers here, and the buyers want the product. We didn’t go out shopping for data companies to build here, they came to us. So, act like it.
If they (DC Blox) isn’t happy, well, there’s a real big eastern coastline out there – try elsewhere.
Jerry says
Give them an ease for a street, not your most precious property.
Robjr says
So if the company ups the $$$ amount is it a go?
A perpetual easement? They must be dreaming.
Just say NO. Flat out NO.
Denali says
The question has to be asked; “Why Flagler Beach?” Could it be the proximity of the bridge have anything to do with the decision? Flagler Beach is simply the most direct route to their new building with an easy crossing of the ICW. No need for an expensive directional bore on property that they could never obtain. Simply trench to the bridge, hang the cables from the bridge and run down the FL-100 right-of-way to wherever they need. All cable will be in the easements along 100 and not cost them a red cent. Any other location and they will be looking at purchasing privately held property to cross the ICW. They need Flagler Beach more than the city needs them. They are trying to get their champagne cost project done on a beer budget – not a bad deal for them, a lousy one for Flagler Beach.
Jane Gentile Youd says
Right on Flagler Beach Commissioners
.No way Jose. Hope you don’t allow any entity a quarter of inch under or over your precious land. Tell them to send up a satellite!
tulip says
I commend Mr Cooley for carefully investigating, obtaining knowledge about the company, all the pros and cons, and not being willing to just jump in and agree, only to find later on that they were taken advantage of like Palm Coast has been over the years. The fact, that other cities in Florida were paid far more than they were offering FB should be a warning to be very skeptical and to maybe really check out the other options that were mentioned. FB has vary little land to use and to make the land the park is on unusable because of the room that will be beneath it and all the pipes, is not the thing to do.. Keep up the good work Mr Cooley
Mary Lumas says
Just make it a parking lot for your new eye sore hotel.
Bob J says
This deal is overall a bad decision for all involved. There will be minimal jobs for this endeavor. The company seems to want all the perks for a new buisness coming to the county but no rewards for the county.
Where are the surveys for what is going to happen to the beaches with the dredging that need to happen. The access will need to be just like what will be needed for access to the park as well.
RobdaSlob says
Why doesn’t DC Blox just buy an open ocean front lot in Flagler? Put in what they want and then flip it with easement built in.
Manette Upson Metcalf says
“The lands hereby granted and dedicated to public use shall forever be and remain open…no use shall be made of the said land by the grantee, its successors or assignee, inconsistent with its use as a public resort and recreation”. In my opinion this violates the deed restrictions placed on what we now call Veterans Park when DF Fuquay and his family deeded the park land to the Town of Flagler Beach in 1940. The Resolution is on tonight’s City Commission meeting agenda.
Manette Upson Metcalf says
The comments and concerns raised by Eric Cooley and others during tonight’s city commission meeting were insightful. The resolution is tabled for now and another location is being considered.
James says
Interesting how an article posted to Flagler Live this morning regarding this topic has disappeared.
Could it be that in that article a small (hardly noticable) admission was made that perhaps there’s more to a certain recent “push” for a utility fee by the Palm Coast city council?
Just an observation.
FlaglerLive says
Thank you for pointing out the “disappeared” article. It was an error on our part when the article was bumped down from the top. It’s back on the front page.