Letter to the Town Board: Commercial data storage facility at Chappaqua Crossing makes no sense

With 10 COMMENTS since Friday
November 5, 2010
by Michael Merchant

Dear Members of the Town Board,

I think that as you make your final decision for the Reader’s Digest property it is worth considering the proposals of the developer and whether they are realistic. 

I am specifically addressing their proposal of turning 142,000 square feet of the commercial space into a server storage farm for companies, a low-intensity use, as the developer has described it, to limit requirements for parking and traffic.  I have spent approximately 15 years of my life building such large corporate facilities, so I believe I have some understanding of the issues.
The idea that this site can be turned into an appealing site for company data center / server storage in my opinion makes no sense for the following reasons:
1.    POWER:

a.    The site is only served by one power center, like most of Chappaqua.  To make it worse, almost all the power is via telephone poles rather than underground.  Last year my house lost power for four days and I only live a quarter mile from Reader’s Digest.  No company is going to put critical data storage at the mercy of an unreliable power grid.

b.    Providing reliable power from multiple sources will likely be a multimillion-dollar expense.


a.    Westchester is probably one of the most expensive places in the United States for electrical power.  It would be fair to say power costs 300% to 400% in New York State more than for other states where power is generated by hydro-power. 

b.    Server equipment is exceptionally power-intensive.  The cost for power in this area alone is a deal breaker.  Why would any company host equipment in Westchester when alternatives throughout the United States are much more reasonable?


a.    While I don’t know what the cost would be for leasing space it will certainly be considerably more than other options for companies.  Why pay Class-A rates when options exist elsewhere for a fraction of the cost?


a.    This is probably more critical than the power issue.  A remote hosting site is only effective if you have guaranteed 100% uptime communications.  Those communications must be high speed (i.e. large bandwidth) and, most importantly, reliable.

b.    Readers Digest, like the rest of Chappaqua (to my knowledge), is served by over head telephone lines.  Any tree branch or ice storm can bring down all communications as has happened to both my house and office in Chappaqua on multiple occasions.

c.    Absolutely no responsible company would take the risk of outages such as those that exist in this area.

d.    The other issue is multiple access to more than one central office.  What I mean by this is there should be connectivity from different central offices (i.e. Chappaqua and Mt. Kisco) vs. being reliant on just one point of failure (Verizon Chappaqua office). 

e.    Companies in the business of company data center / server storage would also want to be connected via separate central offices to all primary carriers; Verizon, AT&T, etc.  Having all the carriers use the same telephone poles would NOT BE ACCEPTABLE to any responsible company.

Far-fetched to think Summit Greenfield would spend millions to make this work

To be honest, the idea that Summit Greenfield would have any success at leasing so much space for this function seems farfetched at best and the only way it would appear practicable to companies is if a tremendous amount of infrastructure (power and communications) were brought into the facility via secure underground and redundant connections.  That would mean major digging up of Route 117 and all other access points from the nearest power distribution points and communications vendors.  The utility and communications companies are not going to pay for that. Is Summit Greenfield going to spend the likely millions of dollars to make this happen for 142,000 square feet of the 600 building?
Given this, I think it’s just another promise they are making realizing that when it doesn’t work, as they must know it won’t, they can come back to the town and say “we tried and the market was bad” so now we would like to convert the 142,000 square feet of space into additional housing or other profitable use.
I will reiterate my position that I made during the September 28 meeting on Chappaqua Crossing.  I would exert your rights and decline their variance requests regarding housing or any variance requests at this time.  Eventually the developer will come back with a plan that benefits the town

Or, in the alternative, the developer might make the town an offer that allows the town to purchase the entire property at a substantially reduced rate since it would appear that clearly, without the town changing current zoning regulations, the developer cannot make the property work as he purchased it.  Furthermore, the current proposal to make the property work also doesn’t work.
Michael Merchant

We encourage civil, civic discourse. All comments are reviewed before publication to assure that this standard is met.

Few Chappaqua residents know that Readers Digest had built one of the most advanced data centers in the country. It is down floors below the ground, and has alternative telecommunications, power feeds, etc.

Mr Merchant’s letter is a very good summary of why it’s a bad site for a data center farm, but the only real issue he states that will withstand inspection is the cost of power…all others are already addressed.

Lastly, the town doesn’t get a vote of light commercial use. The property is already zoned for that, including the installation of a data center. They could move in tomorrow if they wanted to.

The reason the developer is floating this idea is to cause the public and town to object to it, thus building a case for future law suit again New Castle that demonstrates that basically the only thing we’ll allow is no use.

By Good summary, but devoid of real facts on 11/05/2010 at 6:59 am

After spending 30 years in the technology business – on the business end of deciding where to place critical data, I have to agree with Michael.  The risk and economics just will not work.  Data Centers located in the Carolina’s and mid-west are much better, and much less expensive propositions for most corporations.  Another factor is that most companies want their archives in a different part of the country for disaster recovery.  And with Indian Point so close, Chappaqua just isn’t a viable option.

By Another IT Guy on 11/05/2010 at 7:37 am

I don’t think it’s fair to say “the only thing we’ll allow is no use”.  The “not in my backyard” & “just say no” arguments are getting old.  Is it unreasonable for the residents to want their long term concerns addressed?!?!  Those concerns have been widely documented.  And until these long term concerns are addressed, the Town Board has an obligation to their constituents to deny the variance request.  The residents of New Castle are well educated & well informed, the developer needs to stop pissing on our legs and telling us it’s raining!

By Rob Greenstein on 11/05/2010 at 11:41 am

@ Bob G…I am not hearing “the only thing we will allow is no use” argument. I hear “it is zoned for commercial use and that is the use that we should allow”. AND I agree with that position. It has been stated many times by several people commenting that this is a commercial property that has historically only housed commercial tenants. It is a unique and beautiful commercial campus and the developer bought it knowing these facts. Any attempts to change the rules in the middle of the game, threaten us with law suits, and ask the people of our community to pay more taxes, endure noise and congestion, and be disruptive should be met with a resounding NO. It’s commercial and it should stay commercial. I am not a technology expert but it seems to me that back-up generators, buried power and communication lines, and satellite receivers should address some of the issues mentioned above. Not every data center needs the power, security, and bandwidth suggested above. We don’t expect the Dept of Defense to move in…..

By Not so fast… on 11/05/2010 at 2:15 pm

Only the Dept of Defense would consider paying Westchester rents for such an operation!

By When you think about it… on 11/05/2010 at 2:49 pm

Not so Fast, I’m hearing a proposal that won’t work, and the developer knows it.  And I agree 100% with Mr. Merchant that the developer will “come back to the town and say ‘we tried and the market was bad’ so now we would like to convert the 142,000 square feet of space into additional housing or other profitable use”.  I’m hearing & seeing the ground work for a future lawsuit.  Again, the residents of New Castle are well educated & well informed, the developer needs to address us accordingly.

By Rob Greenstein on 11/05/2010 at 3:16 pm

MR G…..why wont the developers plan for commercial tenants work? If back-up power generators, underground lines, or satelite communications are needed to make it viable then let then install what they need. They own the land and if they want a data center then let them make the investment. Once again, the discussion must center on the issue at hand – this is a commercially zoned area and should stay that way. It is unfortunate Readers Digest left and unfortunate that the economy is preventing SG from filling the space but that should not mean the people of NEw Castle should cushion the developers blow. Fear of lawsuit is not a good enough reason to change the rules. That is a bullying tactic and we should not back down. If a homeowner has his/her house on the market and can not find a buyer should we allow the owner to zone comercial and turn the house into a bed and Breakfast, a dog kennel, a bar and grill? By your logic we should allow residential to be changed to commercial because the homeowner can sue.

By ResidentLongtime on 11/07/2010 at 12:29 pm

To All,

The commercial data center concept is just a decoy, so I certainly would not worry about it.  SG has not intention of any commercial development plan.  Their plan is very simple.  Get the residential re-zoning and in one year come back to the town, show “no marketability” options for commercial and use that to get permission to knock down the Readers Digest builiding and add 300 more condos.  I am a developer and can tell you that this is the game plan.  End of story.  The advantage for SG in this case is that our Town Board does not have the analytical background, experience and backbone to see through this.  All they are focused on is the 20 affordable units, which don’t make a dent in meeting any Westchester requirements.  They put their Democratic party agenda above governing.  It is a shame that this is going to be jammed through because our Town Board is simply not up to the task.  I wish I had this Town Board on the other side of our development projects – we would be reaping the financial rewards.

By Commercial Data Center a Facade on 11/07/2010 at 6:03 pm

Commercial Data Center a Facade, I agree 100% with your comment.  You have hit the nail on the head – this is EXACTLY their game plan – “get the residential re-zoning and in one year come back to the town, show ‘no marketability’ options for commercial and use that to get permission to knock down the Readers Digest building and add 300 more condos”.  I would REALLY appreciate it if you would contact me.  I will absolutely respect your anonymity.  My email address is .(JavaScript must be enabled to view this email address).  Please contact me.

By Rob Greenstein on 11/07/2010 at 8:47 pm

If the object is to obtain the affordable housing we need, then tell the developer that by building the 20 affordable units the board will relieve him of his four-tenant restriction and he can gradually fill in more of his commercial space.  Keep his concentration on the commercial revenues the town wants and needs and get the affordable units besides.

If he says he NEEDS the big market-rate residential project to finance the commercial side of his business, then he’s the wrong guy for this property. Does he intend to have the town wait three, four, five years—until the residential project is completed—to begin to upgrade the old RD space?  And will he grieve his taxes each year between now and then?
Where does that leave the revenue stream for the town from the commercial property?  Five, six, seven years down the road? That still leaves us a black hole.  Step aside, Summit, and make room for someone who can afford to do something with the property sooner. You overpaid. Let the next owner benefit from the price correction and get moving on a project that will benefit this town, not take from it.

By I agree with Facade on 11/07/2010 at 10:24 pm

“Few Chappaqua residents know that Readers Digest had built one of the most advanced data centers in the country”

I find it hard to believe that whatever data storage system RD built in its basement remains relevant, let alone competitive, in today’s market.  Perhaps “devoid of real facts” can start by providing a few of his/her own. 

Please tell us how RD built and maintained (as it slid towards bankruptcy) “one of the most advanced data centers in the country.”  Explain how the power supply and connectivity issues succinctly described by Mr. Merchant have already been solved. 

Or better yet: please tell us where to look for this information in the developer’s DEIS or other application materials, where it should have been fully detailed.  (Hint: Don’t bother, you won’t find it.  This was simply a hypothetical use to make the developer’s traffic study and other SEQRA analyses look better on paper).

Lastly, if the site really has a competitive, state-of-the-art data storage facility that could be leased “tomorrow,” then why does this wonderful facility remain vacant?  SG states in its Modified Petition that there is “increased demand” for such facilities. (¶ 72).

By A Concerned Heathcote Resident on 11/08/2010 at 2:56 pm

@A Concerned Heathcote Resident

1 – God hasn’t changed power recently that I’m aware off. ConEd updated high KVA feeds into the data center for high end IBM server farms about 6 years ago. While the PDUs and in building distribution grid would change, the raw power is fine
2 – Fiber was pulled from Mount Kisco switching center and from Chappaqua COs years ago. Since God also invented light at the same time as electricity, the raw fiber connections are perfect
3 – The original water cooled mainframes needed a great deal of chiller infrastructure, perfect for a high density (1000 watts/sq/ft) cooling profile of a server farm.
4 – Developer doesn’t rent the space ‘tomorrow,’ because residential housing is more profitable.
5 – The information isn’t in the DEIS study because it’s not needed, and not required if they’re not changing ‘use,’ If the developed wants to sell/lease/rent to some company and not change the RD property’s use from it’s current zoning, they can.

While we all want a good answer, especially those in the immediate area, all parties need to know that there are much worse outcomes than residential housing. A server farm isn’t a bad one at all.
A worse one would be light manufacturing, such as a small plastics factory, which would need no approval from the town.

Most residents don’t know that up until a decade ago, Hunts lane housed just such a factory.

By Original Commenter on 11/12/2010 at 8:41 am

To Original Commenter’s points:

Light manufacturing – not a chance, the real estate is far too expensive.  Your example re Hunts Lane only proves the point. 

5 – I disagree. You are conflating SEQRA review with permitted zoning uses.  The developer has requested a zoning change and has identified the “data farm” use in its DEIS to help support its application.  If that use is not feasible, then the environmental review should be evaluating one that is.

4 – That’s what concerns me. 

3, 2, 1 – The Town’s consultant, HR&A Associates, has cautioned that the data farm use remains substantially undocumented in the DEIS.  Instead of posting to a message board like a teenager, the developer should provide the pertinent facts to the Town’s consultants, who presumably have the expertise to determine what’s real.  Let’s leave God out of it.

By A Concerned Heathcote Resident on 11/12/2010 at 11:28 am

Dear Original: the business zoning of the RD property is NOT meant for “industrial” or “light industrial”—there is another zoning just for that, which is down on Hunts Lane and on some of N Greeley.  RD’s zoning does not permit it.

By zoning won’t permit it on 11/12/2010 at 11:59 am

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