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A data center planned at the former paper mill in Jay may fall victim to a bill being considered in the Maine Legislature even before work on it begins in July.
The project’s owner, JGT2 Redevelopment, has an agreement with a national data center company, Sentinel Data Centers, to occupy a total of 1 million square feet on two floors of the former paper mill long owned by International Paper, which was a regional powerhouse employing more than a thousand people before closing in 2023.
The planned revamp of the mill has not been previously reported. But a recent bill approved by the Legislature’s energy committee would limit new data centers in the state for about a year. If it passes, the moratorium would effectively kill the project, said Tony McDonald, a longtime commercial developer in the state who is behind the data center project.
The moratorium would put a damper on investment in other multimillion-dollar projects, McDonald and other businesspeople said. The bill still needs approval from both chambers and Gov. Janet Mills.
“The moratorium would be disastrous for us,” said McDonald, who works at the Boulos Co. real estate and has partnered with New Mill Capital Holdings, Infinity Asset Solutions and Camjay LLC on the project.
Sentinel is “very concerned” about the path the bill will take, he said. The client, through McDonald, declined an interview about its plans. The Democratic-led version of the bill would not allow exceptions for any data center projects.
The bill comes after Lewiston and Wiscasset halted proposed data centers amid public outcry over their safety and use of water and other resources. It also could threaten a $300 million project proposed in Sanford and another proposal for Loring Air Force Base in northern Maine.
The Jay mill once was the heartbeat of the town and the region. Opened by International Paper in 1965, as the market changed it went through several owners, most recently by Pixelle Specialty Solutions. A major explosion in 2020 hobbled the mill, and its owners shut it down three years later.
McDonald said he hasn’t seen any pushback yet from Jay residents or town administrators, he believes largely because he is not asking for special tax breaks or other funding as other projects in the state have. Town officials were not immediately available for comment on Friday. The location also is away from a downtown area, which was one of several objections by Lewiston residents to the data center proposal in the former Bates Mill 3.
The proposed Jay data center also has its own energy source, so it won’t increase costs to ratepayers, another concern expressed by residents in the other two towns. The project calls for replacing the current gas turbine with 150 megawatts of cleaner solar energy.
“We don’t need any improvements to the … grid,” McDonald said. “We’re working with what is there.”
The site is permitted for the project, which he said will require only minor changes to current buildings. The paper machines have already been shipped to Pakistan, and demolition is scheduled to begin in July.
Maine has a lot of regulations and expensive electricity costs, which make it difficult for attracting new investors, Tony Buxton, an energy lobbyist at Preti Flaherty in Portland who is working with McDonald, said. He doesn’t think any companies will propose new projects until the bill is settled.
“Doing a project like this requires a huge investment, and you want certainty that you’re wanted and can go ahead,” he said.
Local resistance in Lewiston and Wiscasset to data centers comes from fears about large artificial intelligence facilities elsewhere in the country using excessive water and energy resources. Residents and municipal officials also said they feel they are being rushed into making decisions about data centers here. The proposed moratorium would allow legislators to come up with regulations for the data centers.
Residents who pushed back on data centers in Wiscasset, Lewiston and Sanford saying they were not provided with enough information about the proposed data centers and their potential impact on the environment and the community. In Lewiston, some of them worried the data center would employ a dozen or fewer people who wouldn’t necessarily have to live in Maine.
McDonald said the Jay project would add lots of local jobs. He said building the Jay center could employ 800 to 1,000 construction workers. Ongoing operations would need at least 125 people to manage and maintain the computers, building and utilities, he said.
“I’m shellshocked at what’s happening now,” McDonald said.
Lori Valigra reports on the environment for the BDN’s Maine Focus investigative team. Reach her at [email protected]. Support for this reporting is provided by the Unity Foundation, a fund at the Maine Community Foundation and donations by BDN readers.
