The Salem Zoning Board of Appeals is expected to vote Wednesday night on an appeal by a real estate company that would allow it to build a 12,000-square-foot building to house what the city classifies as a data center in the city’s office complex, known as Shetland Park.
The New York-based real estate company Prime Group Holding, a private equity firm that owns self-storage facilities across the country, is appealing the revocation of its permit to build the facility.
But the vote comes two months after Salem Mayor Dominick Pangallo proposed an overall ban on data center construction in the city. The ban has not yet been passed by the city council.
“This zoning ordinance that I filed was not a direct response to this particular situation that’s before the Zoning Board of Appeals in this particular project,” he said. “But I think it’s a really good illustration of why we need to put this kind of protection in place.”
Pangallo said the building was initially pitched as an IT services company for construction management firm Structure Tone. The firm applied for a building permit for the project, and received it on May 18.
“Subsequently, on receiving more detailed construction documents, [Salem Inspection Services, Building & Public Properties] understood it to be a data center use that the building commissioner did not see as being compliant with zoning,” he said. “So the permit for construction was revoked.”
But Bob Moser, founder, owner and CEO of Prime Group Holdings, told GBH News that the building will not be for a data center, but rather for a for a low-latency inference center.
In a brief phone interview, Moser said that the city misunderstands the project. “They just see a bunch of computers and they think it’s a data canter,” he said.
Pangallo said that while the city’s Building Department “made the right decision in revoking this permit” in late June, the decision is now up to the Zoning Board of Appeals.
“I’m hoping that they will see the reasoning behind the building department’s decision to revoke this and the concerns from the zoning officer, and that they will uphold the rejection,” he said.
The data center ban Pangallo presented to the Salem City Council over the summer was proposed as a zoning ordinance. It cites the city’s size, density and economic viability and a desire to stay as affordable as possible.
He said Salem has a “history of intensive industrial uses in our community,” including oil manufacturing facilities, a coal-fired power plant and electrical switchyards.
“I saw this … as a continuation of that legacy that we didn’t want to continue, that we don’t want to pass on to future generations here,” he said. “We’ve already seen the consequences of this kind of commercial and industrial activity in our communities, and it’s not the right fit for what we see for the future of commercial growth in Salem.”
Last week, Gov. Maura Healey signed an executive order that requires pending data centers to reach community benefit agreements with their host communities that align with state standards before developers can move onto state permitting.
Pangallo said from what he understands, the order only applies to “hyperscale data centers,” and he’s not sure that it would apply since this building doesn’t reach that size.
“I don’t think that we’re so starved for economic activity in Salem that we need to open up ourselves to this kind of use,” he said. “Even with guardrails or regulations in place, there isn’t a degree of protection that I think that we would have down the road … that could protect against the future possibility that things might be undone, and so I didn’t want to subject our community to that risk.”
Don Seiffert contributed to this story.
