Chase got a spiff of $77 million to create one job with New York datacenter

Official involved in deal tells El Reg number doesn't paint entire picture of datacenter's economic benefit
When Rockland County, New York, approved nearly $77 million in tax breaks for JPMorgan Chase's datacenter expansion in 2024, no one showed up to object.

Two years and a whole lot of bit barns in the news cycle later, government watchdogs are calling foul over the project's lone permanent job.

Reinvent Albany, a group focused on accountability in New York state government, says that the Rockland County Industrial Development Agency (IDA) signed off on roughly $77 million in foregone tax revenue in exchange for just one new permanent job at the expanded datacenter.

That number is accurate, too - the IDA's own resolution document on the matter states that the project is expected to create one new full-time job.

"$77 million per job is by far the largest government subsidy ever recorded within the United States, possibly the world," Reinvent Albany said in its report on the subsidy.

"In return for the subsidies, JP Morgan will build a new datacenter that creates one full-time job and continue paying a total of about $600k a year in Payments in Lieu of Taxes."
JPMorganChase’s existing facility is located in Orangeburg, a community in Rockland that has become a hotspot for datacenters in recent years.

Construction on the current JPMC datacenter began in 2017.

Reinvent Albany also called the deal out for extending a tax abatement deal for the site through 2044.

Reinvent has made its position clear on the matter, with executive director John Kaehny telling nonprofit news outfit NYS Focus that he sees the JPMC subsidy deal as "totally crazy and irrational," and one that it's hard to see ever breaking even for the county.

"Why should Rockland and NY taxpayers provide roughly a hundred million dollars so that one of the biggest firms on Wall Street can double the size of one of its datacenters," Kaehny told The Register in an email.

He also said that JPMC's claims in the IDA's resolution that it would go elsewhere if not given the tax break are suspicious, as the company already had a deal in place with Rockland for the earlier phase of the project.

In essence, any pressure JPMC may have put on the county to agree to the new tax break and abatement was bollocks.

Steven Porath, executive director of the Rockland County IDA, sees things differently.

Contrary to the way it might look, there was nothing sneaky being done in 2024, he told The Register in a phone conversation, and that one job figure doesn't tell the whole story either, he explained.

"These questions weren't raised in 2024," Porath said.

"We weren't trying to do this behind anyone's backs."
No one actually showed up when the IDA held a public hearing on the matter back in 2024, he noted, so it's not like they didn't have the opportunity.

What's more likely the case, he opined, is that no one really cared about datacenters back then.

"Two years ago, the community wasn't weighing in on datacenters," the IDA director said.

"If another one comes before us I do believe there'll be discourse and the IDA will listen to the public."
In other words, it's too late to stop this one - construction is already underway and likely to wrap up by 2028 - but future datacenters in Rockland are unlikely to get the pass they would have even two years ago.

"We have to address what the community wants," Porath added.

"This is an evolving world; what would be considered fine a couple years ago may not be okay with the public now."
Just what is a datacenter job, exactly?

Porath readily admitted the veracity of the single job claim in the document, as well as how bad the deal looks.

"No one would justify $77M for one employee, you'd sound like a nut," he told us.

Kaehny appears to agree, but he argued in our discussion that it's a sign the entire industrial development agency model is broken.

"[The IDA model] assumes large businesses will create large amounts of jobs in return for large taxpayer subsidies," Kaehny told us.

"Datacenters are an extreme example of this being true, but generally, automation in manufacturing has made subsidizing businesses a very inefficient way to convert tax dollars into jobs."
Porath told us himself that job creation is no longer a reliable metric for economic benefit, saying that IDAs now use other parameters to assess a project's benefit against tax subsidies.

Kaehny believes Porath's statement to that end violates the IDA's own stated goal [PDF] of creating and retaining jobs in the county.

Either way, Porath told us that the JPMC project would actually create 1,450 jobs.

Those are all temporary, however, and thus weren't included in the metrics considered for the paperwork that triggered Reinvent Albany's ire.

Citing temporary jobs in scoping datacenter projects is a common way to inflate the benefit to those only looking at a proposal.

It's easy to roll one's eyes at numbers that include temporary work on a datacenter instead of in it, but Porath says that "temporary" jobs at datacenters are different from those in other industries.

"Datacenters are unique in that, once construction is complete they're in a constant process of updating equipment, and that needs outside local contractors," Porath explained, describing temporary jobs at datacenters as "a rolling number" instead of positions that end completely after the construction phase is over.

Porath also explained that the tax abatement extension, which hasn't been finalized yet, will involve a new assessment of the tax value of the JPMC plot.

"Additional property tax deals will come in as a result of this facility," he noted.

Not that it really matters - JPMC's bigger, better datacenter is going to be built, late-to-the-game objections or not.

That, in part, is what Reinvent Albany is trying to call attention to.

"A resident of Orangetown, Rockland County, is served by a local planning board, a county planning board and a very active IDA, all of which have numerous active committees," Kaehny told us.

"How are they supposed to know which of the dozens or so meetings really matter?"
Kaehny explained that there's no independent watchdog keeping an eye on projects and finances at the local level that's able to call attention to deals that might require more scrutiny.

Whether or not this deal is as bad as Reinvent Albany supposes isn't the point here, in other words, and the timing of the scrutiny bears mentioning, too.

Datacenter deals are increasingly front and center in local political fights, with some states considering or outright banning datacenter expansion as local opposition mounts .

Some of those concerns have been over a lack of transparency around the cost of datacenter subsidies, which have cost some states billions in lost tax revenue .

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