New York State has issued a Community Investment Framework recommending that municipalities require AI data centers to contribute $1 million per megawatt toward local community investments while planning for long-term maintenance and site abandonment risks.
New York State Governor Kathy Hochul has announced the Community Investment Framework (CIF), a negotiation guide designed to assist towns and municipalities across the state when engaging with data center developers. The framework recommends that communities demand $1 million in community investment per megawatt of utility demand. According to Empire State Development, the state’s economic development agency, the CIF provides “a structured approach to identifying, negotiating, and documenting investments from data center developers/operators/owners that address local priorities and create lasting community benefits.”
The document outlines six core principles for data center negotiations: an investment benchmark of $1 million per megawatt; comprehensive long-term planning that includes contingencies for facility abandonment; a roadmap to manage ongoing costs for projects funded through the CIF; a curated list of local priority investment areas tailored to community needs; confirmation of local ownership for projects receiving data center funding; and clear timelines for all programs, particularly those requiring phased, multi-year investments. Beyond these principles, the framework advises prioritizing community engagement, consulting legal counsel and key decision-makers, incentivizing good-faith and timely negotiations, and maintaining strategic flexibility.
While traditional data centers have operated for decades, AI-driven facilities are a relatively recent development that place significantly greater strain on regional electricity and water supplies. They also generate fewer jobs and deliver less direct community value than other industrial sectors. Consequently, jurisdictions like Loudoun County, Virginia—which currently hosts 250 data centers—have begun tightening regulations on new facilities. Across the nation, more than 500 states, counties, and localities have already passed moratoriums or temporary bans against data centers, including in New York and Texas. However, these restrictions carry expiration dates, meaning local governments will soon need to resume processing development applications.
The CIF offers a practical blueprint for municipalities navigating renewed negotiations, aiming to maximize community benefits while mitigating operational and environmental impacts. In Pennsylvania, the township of Plymouth Township previously drafted a comprehensive agreement detailing 43 specific demands before approving a proposed data center. When the developer canceled the initial application and submitted a revised one, the township accused the company of attempting to secure approval “by tantrum.”
Reports indicate that various data center developers have requested up to 9,000 megawatts from New York’s state grid, though this figure excludes operators who plan to supply their own power or construct on-site generation facilities. If New York municipalities adopt the CIF’s standards during negotiations, the framework could potentially generate $9 billion or more in community investments. While substantial, this amount represents a fraction of the estimated $32 trillion that some experts project will be invested in data center infrastructure by 2050.