🎙️ Podcast Recap: Strategic Insights on Data Centers with Raymond Hawkins & Dr. Terry Clower 🌐
In this conversation, Raymond Hawkins, Chief Revenue Officer at Compass Datacenters, sits down with Dr. Terry Clower, a leading professor of public policy at George Mason University and director of the Center for Regional Analysis. Together, they explore the role of data centers in shaping the future of local economies. 💼
Key Topics Discussed:
📍 Data Center Siting & Land Use: The duo contrasts U.S. and European models for data center placement, examining how land allocation impacts regional development.
⚡ Power Consumption & Sustainability: They dive deep into power planning, renewable energy sources, and the resurgence of nuclear infrastructure to meet the growing demand of the data economy.
🏙️ Economic Impact on Municipalities: Dr. Clower shares insights into how data centers can revitalize local economies, support tax bases, and reduce infrastructure strain.
🔋 Power Industry Dynamics: The discussion explores how the demand for data centers is reshaping the energy sector, with a focus on renewable energy and nuclear power solutions.
🌱 The Future of Data Centers: A look at the evolving landscape of energy demands and long-term planning for municipalities looking to integrate data centers into their growth strategies.
Whether you’re curious about how data centers impact local economies or interested in sustainable energy solutions, this episode covers it all! 🚀
Episode Full Transcript
Dr. Terry Clower: Of our non-carbon-based energy generation fuel sources, nuclear provides the best opportunity for the power needs we have. I can argue to you without a lot of effort that the revenues to the power companies provided by data centers is providing the capital resources and the ability for them to go to market, to borrow the funds, to develop this new technology and to install it. It requires billions of dollars.
Raymond Hawkins: All right, welcome everybody. This is Raymond Hawkins, your host for another edition of Not Your Father’s data center. Today we have a special guest that will help us understand how economic development and government and public policy influence what we do. Dr. Terry Clower from George Mason University, professor of Public Policy. Terry, you got a lot more titles than that, so I’m going to let you do all the rest of them. I got George Mason and Professor of Public Policy. You take all the other ones.
Dr. Terry Clower: Okay, well thanks Raymond. So in addition to being a professor of public policy, I hold the title of Northern Virginia Chair and local government. I am the director of the Center for Regional Analysis and the Stephen Fuller Institute.
Raymond Hawkins: All right, I show up with just one title, so you win the title battle. I’m already down 1-0. So before we get into how data centers and public policy and regional development, all of those things fit together, do you mind giving us a little bit of history about you? I see that both of us spent some time in Texas, but tell us where you grew up, where you went to school, how you got into what you’re doing. Let’s get a little bit about you, Terry.
Dr. Terry Clower: Sure. So I was born in Dallas, in Texas and stayed there for most of my life until I moved up to the D.C area about 10 years ago. Went to school, my undergraduate degree is in marine transportation from the Texas Maritime Academy in Galveston. So naturally, I became a professor of public policy. [inaudible 00:02:09].
Raymond Hawkins: I definitely see the connection. Yeah, yeah, very much so.
Dr. Terry Clower: Goes through, no, actually, so there is a connection. So I learned how to sail ships and about halfway through my senior year, just before I sat for my license exam as a deck officer, the job market just collapsed. Just you couldn’t get into a job as a third mate of an ocean vessel. So I worked offshore oil industry for a while. Took a boat over to the North Sea, that kind of stuff, doing things like that. But that really wasn’t what I wanted to do and it didn’t look like the job prospects were getting any better for the ship. So I moved onshore and took a job doing domestic transportation for a big sugar company. So we were doing trucks and rail and that kind of stuff and got me into that. Moved a couple of jobs and got additional duties in warehousing, which included doing site location work.
So where do you put a distribution center? You want to serve the Southeast, where does it go? And I help identify those places, negotiate for the spaces, and then run into a startup operation. By this time I am late 20s, early 30s and decided that I wanted to go back and get a master’s degree. Although one thing I will add to our conversation today, that was a little interesting. My last private sector job before going into academia, returning to academia I guess I should say was as the operations manager for a commercial records center. So I was the analog version of data centers.
Raymond Hawkins: All right, commercial records. Keeping track of people’s tapes and paper, stuff like that?
Dr. Terry Clower: Yeah, yeah. Just warehouses full of boxes of paper that you had. Some companies would call and ask for a particular file so you’d have to know where to go, which box to find it in the warehouse and tape rotate, the backup tape rotations, those kinds of things. And so we did that. But I go back to school for a program at the University of North Texas and applied economics that advertised that they had a track in economic development theory. And I kind of thought it’d be kind of cool, I’ve been practicing this, doing the site location work, what’s the theory behind it? Go back to school, left my job, got offered an assistantship at a center called the Center for Economic Development and Research. Once I got finished with school, I was offered a full-time job, I decided to go ahead and pursue a doctorate while I was working there. That turned out to be an information sciences, we were doing a lot of work about telecom infrastructure development, this was in the 90s.
You fast-forward a number of years and I got onto a professor track, became the director of that center, and then about six, seven years later-
Raymond Hawkins: Was that up in Denton. Where was that center? Was [inaudible 00:04:47]?
Dr. Terry Clower: That was in Denton, yeah.
Raymond Hawkins: That’s what [inaudible 00:04:48] thought. Yeah, up in north Texas.
Dr. Terry Clower: That was in Denton. Several years later, I got recruited to come up to George Mason by a friend of mine that was a professor here to take over the Center for Regional Analysis whose director was getting ready to retire. There is a connection there. I usually try to do this over about three bears, because it takes… If you think all those connections. But what it has meant, Raymond, and the fun part of what I get to do is, we deal in regional economic competitiveness. My centers are basically small consulting operations that are housed within a university and we help communities, we help nonprofits, we work with industry, state agencies, and the whole issue is regional economic competitiveness, which means that I talk about labor markets and labor force development. I talk about transportation, I talk about housing, I talk about regulations and rules. I talk about power and energy infrastructure. So it’s all over the place, but it’s fun and that’s what makes it fun.
Raymond Hawkins: And you say regional competitiveness, if I’m hearing you right, Terry, this is “Hey, my region, my district, my authority-handling jurisdiction would like to land this kind of customer or this kind of industry or this kind of business,” and you help advise them on how to be competitive to attract that kind of development?
Dr. Terry Clower: A little less of that and more about giving the attributes of that community, what industries make sense for them to chase after.
Raymond Hawkins: I got you.
Dr. Terry Clower: Because you can’t chase everybody, so how do you target your markets? Or if you’re in one of those situations to where your economy is slowing in, that industry is starting to pass you by, what do you need to change? How do you change your trajectory of growth?
Raymond Hawkins: I got you. So I’m going to take another stab at it. So less it’s a competitive market to land a company in your area. Rather, how do you make your area as attractive and how do you accentuate the things that your area has so that it is appealing to the marketplace, appealing to businesses?
Dr. Terry Clower: That’s correct.
Raymond Hawkins: So my friends in Iowa aren’t winning a lot of harbors, are they? Right?
Dr. Terry Clower: Well, I don’t know. You talk about river ports and because of the impact of conveyance along the inland waterways.
Raymond Hawkins: That’s true. The Mississippi, they could on the other side of the state. That’s fair, fair. All right, well cool. All right, so as we as data center folks, and most of the people that listen to our podcast data center folks, we spend time talking to the municipalities, the cities, the counties, the states and the power companies and the fiber companies. So the things you’re helping advise on are all things that we’re coming and asking questions about. So I think, one of the things we’d love to talk about is how you, on the advisory side to these municipalities and areas and regions, how do they think about data centers? Are they there? Where are they in the, I think everyone recognizes, hey, let’s hire or let’s attract companies that bring in employees and bring in a tax base. And you think of companies that make consumers are easily aware of, “Hey, we’d like a big Ford motor plant or we’d like a big Kia auto plant.” Those ones I think you see in the news, but how do they think about data centers impacting their economic development?
Dr. Terry Clower: Yeah, that’s almost like those questions that they asked Rodney Dangerfield and going back to school. I have one question in 72 parts. It’s-
Raymond Hawkins: If we can get permission to play a clip of him and Sam Kenison and back to school, it would be worth playing, for sure.
Dr. Terry Clower: Yeah, that would be pretty good. Yeah. Raymond, the thing that is there is such a wide variety of attitudes about economic development across localities in the country. Your company gets to see the evidence of some of that and we get to see some real differentials. I was raised in a place and did most of my career in a place that one would argue as a general category is very business-friendly. The attitude of localities is, what can we do to help you business person make us your destination of choice? I currently reside in an area that is more about, “Well business person, what will you do for me so that I’ll allow you to come here.”
And part of the thing that we have and part of the challenge of what we do in different communities is, how do you communicate to the local leaders about what their real position is as they’re trying to position themselves, maybe not for the economy that existed 10 years ago, 20 years ago or 40 years ago? And how do they position themselves or why should they even bother to try to position themselves for the economy of the future?
It’s one of the key challenges, and I think you’ve addressed this in other of these podcasts that I’ve had the opportunity to watch that, I don’t know that there are a lot of folks out there. There is not a general agreement about what is it that data centers represent in our economy? I mean you certainly have places where, hey, this is the tax base. There is a lot of property value that goes inside of that data center. And because there’s usually not a huge amount of direct employment at data centers, it’s not particularly stressful to add that company to the local school systems and that kind of thing like that. So you get them and they just-
Raymond Hawkins: We don’t mess up traffic patterns. We don’t have parking lots with thousands of cars. There are things that when you think of the large tax base facility is not doing, to your point, schools, roads. We’re not messing those up when we show up.
Dr. Terry Clower: And the thing is, so you have some that take that view. I am hopeful though, I cannot cite to you a specific example though. Maybe you can offer one from the experience that you guys have had recently. Where do you have a locality that truly gets what data centers are representing now and in the future, in the terms of the structure of our economy, particularly the economy that is just now emerging and will be the dominant sectors of our industry and economic growth for the next 25 or 30 years?
Raymond Hawkins: Yeah, boy, if you’re asking for an example, certainly I can’t talk about economic development. Well without bringing up my good friend buddy Riser. Buddy understood and embraced and was on the front end. I mean, Loudoun County is Loudoun County and it’s an incredible data center footprint for lots of reasons. But Buddy being on the front end of understanding just what you just said. Hey, this is where the economy is headed. Whatever wave of the revolution, I know we finished the industrial Revolution and then we had a technology revolution. People talk about having an information revolution. I think Buddy did as good a job and Loudoun County did the best job in the world of understanding what was coming.
Now you see areas that are starting to, the switch has gone, I think gone off. Phoenix is in that boat, the state of Arizona has been very aggressive. There are other places, Ohio’s done a great job. There are places that are going, “Hey, this is the future and we’ve got to do things to make our region fertile soil for the data center business.” But I got to give props to my friend buddy on setting the pace in Loudoun County.
Dr. Terry Clower: So the great Buddy Riser is actually, he and I talk fairly frequently. We are friends, we are colleagues, we have worked together on a few things, we stand on stage together to give presentations and his vision is so great and we continue to talk about what’s next. And he’s in this enviable position where he has this massive infrastructure capacity within the county that he’s doing. But he also has challenges even with his own locality about helping the local leaders. And increasingly the communication you make with the citizens on what the value is of data centers beyond just the tax base, what is the… And how do you envision this to work in future? One of the things that’s been unfortunate is that for whatever reason, and I guess it’s largely about power consumption, but the NIMBY industry has decided that data centers are their flavor of the month for a coordinated consistent attack mode.
It is really interesting, we worked in some local counties recently who were proposing some local land use rules that basically would have said, you’re not going to build data centers here. And we were trying to make this case, because they’re sitting there saying, well, the citizens don’t want data centers. Yes, but your own economic development plans say that you want to attract businesses that do artificial intelligence. Eventually the businesses that are doing quantum, it’s like, hang on guys, this is the old, go back to the old days of where we did more manufacturing. Of course, we’re doing more manufacturing than ever, we’re just not hiring as many people to do it. But you don’t have manufacturing if you don’t have facilities to store your raw materials, your in-process goods and your finished goods before they sell to market and warehousing.
Raymond Hawkins: Yep. Got to have an industrial area to do all that. Yeah, for sure. You talk about in industrial development, people get, if I build a bunch of cars, I got to park them somewhere before they get on a train or on a boat and go somewhere else. I think it’s less, “Hey, we want to have our community be able to address the information revolution.” Well hey, all of that happens in a building somewhere. I do occasionally get a kick. I talk to somebody, they go, “I thought that was in the cloud.” Well it is, but a cloud is a building. It’s a building somewhere. And by the way, they look like that right over there and getting those dots to connect, because I think we’re still the very early stages of the data center development world.
There’s still an incredible amount of capacity that resides on-premise. The corporate owned data centers that companies who own the facility and the facilities full of their computers, that still exists and all of that’s going to come to large cloud data centers. It’s going to take another 15, 20 years. But we are continuing to grow the ability to manage information and what NVIDIA is doing, data’s growing like crazy, but NVIDIA has turned that like a hockey stick.
Dr. Terry Clower: It has. And then of course part of it though is also this dynamic. If you say, “Well, we don’t want hyperscale facilities.” And there’s going to be places where because of land use availability, proximity to residential, anything that it might not make sense to put a hyperscale size facility. That doesn’t mean that you don’t have say a smaller size colo facility or even edge facilities that are providing that more. Almost a little bit like the last mile analogy though, that’s not a precise thing. And it really is to address the massive data needs that appears to be the very basis of our emerging growth, high value added technologies. All of it just says we got to have all of the above. Appropriate places, and I think that’s a lot of what’s going to be fun is, what is the appropriate land use regime.
Now in this country we keep talking about we want to shunt data centers into industrial zone land. I’m not a big proponent about the old Euclidean zoning thing. I think it was useful in the late 19th and early 20th century, it’s less useful today. But you go into Europe and we see data centers are plopped in the middle of an urban area. And so there are different vision, but some of it we have to do even better than we’re doing today about how you communicate how data centers are a key piece of infrastructure and a component. They are not the industry, they are the things that will allow the data economy to succeed within a region or if you choose it to go elsewhere and you don’t want to be it and you just want to be a consumer of that, well, it’s like being, you got the retailers buy, but you don’t have the manufacturing. What is the high value added part?
Raymond Hawkins: Yeah, yeah. What part comes with the most value to your region or your city or your area. Terry, as you advise these regions on competitiveness, how do they handle two questions? And again, you’re going to get me with the multi-part question again. How do they handle the power consideration and then balance the power consideration with sustainability? I hear a lot in our space, “Oh, data centers use too much power. Oh my goodness. Data centers are power hogs. Oh, data centers have got really, really, really high power demands.” How the regions thinking about that, and I know the power companies are separate, but I think that’s part of the conversation. How do the guys that you advise think about powering these facilities?
Dr. Terry Clower: Those are unanswered questions, because we’re trying to figure out the best way. And the thing that drives some of the real angst is that folks that thought that we were developing enough renewable type of energy capacity so that we could lower our dependent on fossil fuel driven energy generation are now finding that no, we’re still needing that to keep up. But it is really interesting how the demand for power is actually creating a resurgence in using existing infrastructure such as an older nuclear plant that was becoming a real deteriorating asset. You now have the money flowing through that is going to say, let’s get that thing up and operating in and it becomes an employer, it becomes part of the tax base in investor owned. Now you mentioned that it’s not the communities. We do have that too because we have not only investor owned utilities, we have municipally owned utilities, we have co-op utilities.
And I think one of the key things that’d be really fun to examine more is, how can data centers work with these municipally owned utilities or the co-ops. Because beyond anything else, it’s a huge revenue base for that company. I would argue to you without having done a specific analysis that the demand for energy from data centers is lowering the average cost for utilities in many respects. All the threat is, oh well you’re having that power line, so it’s going to make everybody’s rates go up. I actually would think that the works a little bit different because you brought up the revenue scale so much that the net effect is, utility rates for the residential market can be held down.
Raymond Hawkins: Yeah, it’ll be interesting. I think that, we’ve really seen Terry that power, the planning for power, whether it’s at the generation level, the transmission level or the distribution level that data centers has shown up and made such a big ask here in the last couple of years that what’s happening with the power providers is transforming. To your point about as they make a rate case and as they build their models back when we would come and ask for, “Hey, I need 10 megawatts over the next five years for that building,” now we show up and say, “Hey, I need a gigawatt and by the way, I need it in 24 months.”
And that conversation is actively changing right now between the data center industry and the power provider industry and going, okay, how do we do this? How do we partner around this? How do we plan together? What does the industry, what does the power industry fund? What does the data center industry fund? I think that would be a fascinating look Terry is to see how that translates back across the rest of the customer base in an area. I think that’d be very interesting to see.
Dr. Terry Clower: The piece that I think is really important and is lost on some of the community that’s very much concerned about the environmental impacts of energy generation are the best technology that we know now, an established technology. And of course in the emerging of the small modular nuclears it’s still… We have test beds coming out. But understand that of our non-carbon based energy generation fuel sources, nuclear provides the best opportunity for the power needs we have and that’s a direction we need to be going in. I can argue to you without a lot of effort that the revenues to the power companies provided by data centers is providing the capital resources and the ability for them to go to market to borrow the funds, to develop this new technology and to install it. It requires billions of dollars.
Raymond Hawkins: I think the capital deployment side of what we are doing is when you start to add up the numbers is scary. I mean the numbers are massive because it’s all downstream. Hey, we start with giving you an application or a piece of functionality on your phone or on your computer, but as you backward, still all the way that back to power generation, the capital required to get that sufficient power is enormous. And the big guys, you already referenced multiple nuclear weather works bringing mothballed facilities or aged facilities back online. Think of the Susquehanna AWS project, whether we’re talking about SMRs, think about Google and Microsoft talking about nuclear projects or already having signed nuclear deals, it’s coming. It is, I think the way we get, I’m just a hundred percent in agreement with you. The way we get sufficient carbon-neutral power for this industry, is we got to get nuclear to go faster and get online sooner. Our industry is already doing builds in 27 and 28. I mean we’re contracting out that far. And that gives us, I think, time to transform how quickly we can bring nuclear generation onto the grid.
Dr. Terry Clower: One of the things that I would like to hope that we are doing as we are studying this from a engineering perspective and a basic physics research is can we use this capital to actually explore the way we even do nuclear? I mean nuclear has this radioactive waste out of it. That is a direct result of us potentially choosing plutonium in our early research, but we were trying to build bombs. We weren’t building energy generation. And there are other types of materials that we don’t have the developed science on that might offer something better. Thorium or something like that. And it’s not been developed and maybe it’s not, but the sheer capital investment that represents the power consumption of data centers and indeed that broader data economy that is emerging, could drive that and with some government investment and support in it. Just think if we can answer that big question, how do you reduce the nuclear waste component of nuclear power? And if you get to that, boy, we’ve got some real opportunities.
Raymond Hawkins: Yeah. You kind of take away the only real stigma about nuclear of hey, what do we do with this highly radioactive waste? Although today, currently relatively small, it’s still a concern. If you take that concern off the table, because it is proven to be incredibly safe around the world despite the hysteria in the US over the last, we’ll back last 20 or 30 years. As I’m sitting here thinking too, I think we’re commissioning a study as we talk. Getting a study that helps understand how increased data center demand and increased data center spending on electrical infrastructure, on grid infrastructure, whether at the generation, transmission or distribution level. How is it impacting individual consumer customers of those utilities would be a fascinating thing to understand. You briefly mentioned, and I’m sitting here thinking, that’d be kind of cool to see. I don’t know how we go about commissioning such a study, but I think there’s real interest and value in understanding instead of, hey, just the data center is using a lot of the power, understanding how much of the infrastructure the industry is funding.
Dr. Terry Clower: Well, the other piece of this also, and we talk about a lot of the power and that certainly that is still going to grow exponentially like the data demand. Look, nobody is building a data center for which there is not demand.
Raymond Hawkins: That’s right. That’s right.
Dr. Terry Clower: So this is in response to what the market is telling us, we need to better run our economies. This access data, the use of our artificial intelligence, I’m not sure what ChatGPT does for us yet. But let’s just say the basics of machine language and machine learning type of processes. But I also, there’s an effort that I’m involved with. I was brought in as a policy person with our engineering school where we’re putting in for an NSF center that would focus on, for lack of a better term, green data centers and what does that mean? And it’s do it both ways. Are there better energy sources, better way of doing that, more efficient ways to do grid distribution, the use of microgrids, how does that connect? What’s all of that? And the second is, how can data centers become more efficient and more neutral in their impact in their immediate microclimates.
Raymond Hawkins: Right.
Dr. Terry Clower: And all of this is stuff your company does some things that has worked on that with fan designs and things that we’ve talked about before. But the other thing is that, that you think you go at this problem from both directions. What’s the best siting for a data center that mitigates some of the spillover effects? Of course, I always do the thing, we did some research here in the locality in Northern Virginia. Because there was all the angst about, “Oh, if you put a data center next door, my kids can’t sleep. My life is destroyed, my property value goes down.” So we actually examined all of the home sales in a single year, 2023, over 6,500 home sales. And we looked at whether or not proximity within a quarter mile of the data center actually matters and it doesn’t.
Raymond Hawkins: Interesting. So you looked at the trend of the sale price. What did you guys compare to reach that conclusion?
Dr. Terry Clower: So what we did was, we looked at all the home sales and then we did what’s called hedonic price modeling. So we looked at all the characteristics of the home, how big the lot is, how old the home is, how large it is, proximity to highways, proximity to downtown airports, all these different characteristics of a home that help explain its price. Now we didn’t get 100% explanation, we explained about 88% of the variance, which in statistical modeling is pretty good.
Raymond Hawkins: [inaudible 00:27:41].
Dr. Terry Clower: Right. It’s an important fact. Now we’re going to continue that work hopefully in other communities. And some of them have had more back and forth about their land uses and stuff. And you can kind of see some stuff. But one of the key things that kills me about these in these meetings, people say, “Oh, well look at all that bad stuff, it’s going to be,” well if it’s being built on industrial land, the question is that, okay, if we had found a negative impact on the values, if that had been the case, the next question would’ve been, was the impact any worse than any other industrial use?
Raymond Hawkins: Yeah. Compared to another industrial-
Dr. Terry Clower: [inaudible 00:28:21]. Do you want a Walmart distribution center that’s running 400 trucks a day in and out of your neighborhood?
Raymond Hawkins: 24 hours a day, 24/7. I mean, there is industrial uses and you got to choose. Do you want a manufacturing facility that builds cars? Do you want a facility that makes tires? I mean, there are other industrial uses that I think we could clearly see have multiple layers of impact, whether it’s environmental or just sheer traffic. I mean it’s interesting and it’s the end of the day. I mean the reality is we’re not going to have fewer data centers. People aren’t giving up access to their… I joke with people, I’m like, “Hey, if you want fewer data centers, I’ll just give you a list. Tell me what on this list you want to do away with. You want to quit using Netflix? No problem. We can shut down a few data centers if we just quit using Netflix. You want to quit using YouTube? No problem. You want to quit using TikTok? No problem.
We can just, they lose that connection that, “Hey, I’m sitting here streaming Peacock or Hulu,” that’s happening in a data center somewhere and it’s coming over some fiber lines of all that infrastructure got built for you to deliver that experience and connecting that emotional connection to that experience. I typed in Uber Eats and some Chinese food showed up. I get to order my Pizza Hut online and it shows up. All that happened in a data center somewhere. And I think folks don’t make that connection and don’t see that infrastructure is vital to the way we all live our lives every day now. It’s hard for me sometimes to remember how I lived my life before I had an iPhone. And I think there’s a lot of us that way. There’s so much that happens on our device now that I don’t remember how I did it.
Dr. Terry Clower: Yeah, well there’s much of what I do in my work now you think about it. How was it done? “Well, I remember how we did and I just remember it taking a lot more time and being a lot harder to get done.” But part of it, this, and I’m going to go back to just this overarching theme, that where we stand is at the cusp, but the economy is changing. This is the new industrial revolution that we are in the beginning phases of now here, if you want to call it the data economy or whatever. And I think it is so important for us to understand that that change is happening, I mean we can still, if we want to, we can produce buggy whips and there will be some small market for that. Well, in the future.
Well the modern equivalent, we can still produce some things and regional economies can kind of limp along, but they will have mediocre growth. They will have constrained public resources like parks, other emergency services, things like that. Schools, all of that will be constrained because they won’t have the tax base and the job base to support these kind of public amenities. And so I think it’s really critical for us to understand the tide’s coming in. You can surf with the tide or you can try to swim through the waves against it and which way gets you beat up and which way do you have a lot of fun?
Raymond Hawkins: Yeah, which way is more fun. All right, I’m going to put you on the spot. So you’ve been advising regions and advising municipalities on how to be competitive. Can you think over your career? I’d like to hear if you’re willing two stories and you can change the names to protect the innocent. The coolest project that you thought, wow, they really got it and they attracted this thing or they made this decision. What was the most intriguing project? And then I’ll admit having done business with government entities before, there’s always a comical story here or there. If you have one that’s funny and we don’t want to impugn anybody, but an intriguing development story and a funny development story, if you have one of each, that would be awesome. Get people to understand a little bit more what you guys do.
Dr. Terry Clower: So I’ve been involved in economic development for a long time now. And instead of thinking, I don’t get super excited about specific projects though because it’s a piece of infrastructure, a reservoir, whatever, a utility plant. But when we do a strategic plan for a community that they then implement, we’ve helped shape them, we’ve given them a direction to go. They do the work of going in the direction. But I look and go back later, five years later, 10 years later, and I can see that that community has grown. There are people who have gotten jobs, good paying jobs that support their family based on the work we help them do. And that’s the cool part of what I do. That’s why I still do it, because that’s fun. The funny thing is there are always forces in economic development that are the ones that are all of the logic. And then you get this decision that’s sometimes hard to explain.
And so when I teach courses in economic development, I always wait till we’ve covered theory that goes back 250 years up through in modern practices and the way it works and the way you do the analyses and all of these, and I wait till the end of the semester to tell them, of course the number one factor for a corporate headquarters location is whether or not the CEO spouse wants to live there.
Raymond Hawkins: How far is it from the boss’s house? Exactly right.
Dr. Terry Clower: And so one of the ones that I will tell you that’s an interesting one, and I will name names in this case, but if you think back to when Boeing moved their headquarters from Seattle to Chicago.
Raymond Hawkins: Right.
Dr. Terry Clower: There were three major metro areas involved that were finalists for that. And that was Chicago, Dallas, and Denver. And of course knowing the Dallas area, you had Ross Perot Jr. these guys around in his private helicopter looking at all the potential sites and everybody was rolling out the red carpet because everybody wanted Boeing. And the story from headquarters at that point, as I’ve been told, was that Boeing was saying, “Well, our manufacturing’s still over there, but our major client is in Washington, so we’re trying to kind of split the difference.” More recently they moved their headquarters. You’re recognizing now you got the guys kind of moving back to where manufacturing is. But any case, so at the end of the day, it came down to these three. Now I’m not going to tell you this is the reason, but there are two characteristics.
The gentleman that was the head of Boeing at the time, owned and loved to sail, and he had about a 45-foot sailboat. And his wife was a huge patron of the opera. Now, if you think about geography, I am not aware of anybody of water near Dallas or Denver that can accommodate a 45-foot sailboat.
Raymond Hawkins: So little big for White Rock Lake, that’s for sure.
Dr. Terry Clower: Yeah, yeah, that’s right.
Raymond Hawkins: It’s two Dallas guys. White Rock could not handle a big boat. Nope.
Dr. Terry Clower: No. And if you think about it, all three of these cities have good operas, but probably not as good as the Chicago Metropolitan.
Raymond Hawkins: For sure. And nobody, a water that looks like Lake Michigan.
Dr. Terry Clower: Yeah. So was that the absolute reason? Who knows? It’s just an interesting little thing of the way you think about it. What it still means though is that, when we’re doing this work, a lot of times Raymond, it’s not like massive shifts in what’s going on. We’re trying to tweak the margins and get trajectories to go back into a growth phase versus a declining phase. And it takes a while. And these plans, there is no magic sauce in all of this. And a lot of it is how do you structure your economy? And of course in a lot of it now, what is so different now than the old industrial site location that we do? Now, it’s all about people don’t move to jobs, the jobs move to where people want to live. So there’s such a big piece. And of course we could have a conversation with Buddy and there’d be pieces of agree. But let’s just say that for purposes of fun, we’ll just say that, now, the biggest piece of it is can you attract and retain the talent that you need to attract the industries that are growing?
Raymond Hawkins: Yeah. Well, I got to say Terry, I feel another podcast coming on where we have me, you and Buddy. That would be a fun conversation to do, to have.
Dr. Terry Clower: Well, any conversation with the great Buddy Riser is fun.
Raymond Hawkins: For sure, sure. And I always like getting him on a podcast, because it gets him back to his broadcast days. I like to get him to tell his radio story days. Those are always fun. All right, so I do want to summarize though a couple of things you said that I think is huge. I said, “Hey, tell me an intriguing story.” And I loved what you said, that at the end of the day, as these regions and municipalities think about what they’re doing to attract industry, they’re providing to provide services to their community, but they’re also providing jobs. I mean, people’s lives get changed by new jobs that show up. And I think that’s one of the messages the data center industry would like to broadcast. “Hey, as we grow these platforms and as more and more workload comes into our buildings, we need skilled professionals to run them. And those are high paying, technically centric, really good 21st century jobs.” And that that’s changing people’s lives, is giving people places to work. And I think that’s crucial to a region or to a municipality when they make those decisions.
Dr. Terry Clower: If I might, I’ll tell you one of the most exciting things I’ve heard recently. And it was at a local hearing about this data center issue on regulations here in the Northern Virginia area. And a person from the international Brotherhood of electric workers stood up and talked about that, in our region, unlike most regions of the country, we had added a lot of jobs as electricians, certified master electricians. And then they got to talking about the Apprentice, and they’re doing so well and they’re due spaces that they’re running their own apprenticeship program. So think about taking a kid coming out of high school who has no interest or maybe financial ability to go to college. You enter this apprenticeship program, you work four days a week, you take classes at a community college. The fifth day, as you go through this program, you actually get exposed to entrepreneurship classes. So if you ever, instead of want to be the worker, you want to be the boss kind of thing. And in four years you finish this program and you are a certified electrician, your starting wage and benefits equates to $87 an hour.
So you have a high school kid who doesn’t go to school who can be earning in 160, 180,000 a year. And one of the key things is in our region with higher high housing costs, you have a person that at the very early stage of the career, they’re earning enough money to be homeowners if they want to be.
Raymond Hawkins: Right. Right.
Dr. Terry Clower: Yeah.
Raymond Hawkins: So key that this development leads to jobs and enhancing people’s lives. And the second key is, figure out where the CEO’s wife wants to live.
Dr. Terry Clower: Think I Well, no, no. We got to remember Raymond. We got to see the CEO’s spouse because a lot of our best companies now have gotten smart enough to have women Raymond in them.
Raymond Hawkins: That’s right. That’s right. That’s exactly right. That’s exactly right. Well, Terry, thank you for the conversation. It’s fun to have you and good to see you again. I do really want to make sure that we do the next one at the end of your dock, it’s your boat. We got to figure out how to get the signal and do the recording there. We’ll do, maybe that’s the one we do with Buddy. We do it on your boat.
Dr. Terry Clower: We can do that. And I do have the cell phone signal booster on the boat already, so I’ve got WiFi.
Raymond Hawkins: Perfect. That’s perfect. That’s perfect. And my team will hate me for it because the background noise. But it’ll be fun for us.
Dr. Terry Clower: It will be fun for us. And that just means that it’s a matter of the right kind of dinners that you take them out to. Right. And the experiences they get to enjoy themselves.
Raymond Hawkins: That’s right. That’s right. That’s exactly right. Terry, this has been great. Thank you so much. We look forward to talking again soon.
Dr. Terry Clower: Thank you.