Potential redevelopment opportunities involving paper, lumber and textile mill sites are nearly as numerous in Maine as they are in the Carolinas, where so many mills moved from New England generations ago only to eventually become mixed-use authenticity factories themselves.
Jay, Maine, located along the Androscoggin River north of Lewiston, is home to Maine’s Paper & Heritage Museum and operates under the slogan “Proud of our past and working for our future!” An authentic opportunity to turn a shuttered mill owned by JGT2 Redevelopment into a new data center campus from Sentinel Data Centers appeared to be a done deal in Jay — until it was done in by a blend of anti-data center sentiment and understandably cold feet as Sentinel pulled out.
Maine Governor Janet Mills supported the project, going so far as to veto data center moratorium legislation she was otherwise in favor of because it didn’t include an exemption for the $550 million Jay mill deal. The mill closed in 2023.
“I believe it necessary and important to examine and plan for the potential impacts of large-scale data centers in Maine,” Mills wrote in her veto statement, “as the use of artificial intelligence becomes more widespread. Given the serious conversations about data centers here and around the country, I believe this work should commence without delay. However, I also believe we must consider the perspective of the Town of Jay, the Franklin County Commissioners and the regional Chamber of Commerce, among others, which have each written to me expressing their strong support for the Jay project and asking that it be exempted from any moratorium, given the significant economic opportunity it presents for the region.”
Mills after the veto established a data center advisory council to recommend policies to enable responsible development in the state, with recommendations forthcoming in January.
‘A Lot of Noise’
That’s small comfort to Jay and to project champions like Tony McDonald, a partner in JGT2 Redevelopment who spoke to me days after Sentinel pulled back.
“The town supported it,” he says. “The county supported it. But a lot of people who got a lot of press — data center haters, AI haters — made a lot of noise and scared people.”
Among those unsettled by the negative vibes were potential data center customers that Sentinel was looking to lock in commitments from for 2028, as they considered the possibility that the project might be held up or stopped altogether. “I understand it,” McDonald says. “I think it’s an overreaction, but I get it.”
McDonald, who describes himself as a “recovering mechanical engineer,” has been doing industrial and commercial real estate deals for 37 years. Unlike various grades of Maine-made paper, he does not fold easily.
“It’s not dead,” he says, noting two other potential data center offers as well as other large manufacturing prospects that he says are doing their homework. “The original concept was not data-center-related. Because of our power, the primary interest has always been typical industrial development.”
What awaits any development appraising the site are 1 million sq. ft. of building, 90-ton cranes, rail, natural gas and 55-foot-clear ceiling heights. The power provided by Central Maine Power, a division of Iberdrola-owned Avangrid, comes to 82 megawatts today with the ability to bring that up to 200 or 220 MW with no changes to the grid, McDonald says.
Indeed, what sets this site apart for those concerned about data centers hoovering up all the electricity is that “we’re just plugging into the substation that is already there,” McDonald says. Moreover, the paper mill used to consume 35 million to 45 million gallons of water per day. The proposed data center would have used around 300,000 gallons per day, less than 1% of the former rate.
“Try to explain that to people and they don’t want to accept or believe it,” McDonald says. “It doesn’t meet their narrative they want to put forward. We have a very good project with the support of state and local government, and it just got caught up in hysteria even though the project doesn’t ring all the bells.”
Fear and Facts
There is no shortage of mill sites in Maine. But McDonald says most of them depend primarily on hydroelectric power, which is not dependable enough for data center investors. And they are simply old. “I redeveloped one paper mill years ago where certain components were built in the 1920s or earlier,” he says. “A lot of times the facilities themselves are not workable for modern standards and then you have a brownfield site.” Some sites are owned by quasi-governmental agencies, which by their nature are not cut out for quick decisions. “For us, it’s just us,” he says of the Jay project. “I don’t need a board of 12 people to decide. The three of us look each other in the eye and decide what to do.”
“We have a very good project with the support of state and local government, and it just got caught up in hysteria.”
— Tony McDonald, JGT2 Redevelopment
McDonald remains stunned by the hatred for data centers — an aversion typically communicated via social media owned by the biggest hyperscale data center giants in existence. “People are really afraid of AI,” he says. “But they conflate AI with data centers. They seem to think if they stop data centers, there will be no AI. AI is here to stay, so get used to it. I’m not a data center guy, but I developed a couple. All they are is warehouses with lots of power and good air conditioning.”
Besides, he says, even as the Jay project avoids the usual hot buttons of water and power strain, any project that did press those buttons would not have an easy go of it.
“You just couldn’t do something like that here in Maine,” he says. “You can’t build a project without proving to the regulatory authorities that you have the utilities and traffic to serve it. Utility companies have to be comfortable with it. There are no surprises.”
Was McDonald surprised by the support from Gov. Mills?
“I was pleased that she was one of the few politicians who took the time to actually understand the facts and understand we were not doing the negative things people behind that bill were concerned about,” he says. “We are just not that bad guy. She did the right thing. I’m not saying that just because it’s my project. Our project should not have been stopped.”
It particularly stings, he says, to have gone through those legislative negotiations only to then see the deal fall apart. “But it’s just that deal,” he says. “We’re working on others and we’ll get something done there.”
He says the state remains very supportive. “We’re by no means giving up on building a data center there, and we have other uses as well,” he says. “I’m not dismayed. I’m a deal guy.”
