“It has the lowest-cost compute cycles in the world, and it’s all green energy,” Mr. Sabey said.
The 375 Pearl Street data center will be linked to these operations out West, he noted. “It costs nothing to move photons through glass,” he said of the fiber lines that will transmit the data. In practice, however, experts say it’s unclear how much computing 375 Pearl Street would actually be able to offload.
What the Manhattan farm doesn’t outsource will be powered mainly from relatively clean sources: natural gas plants and the Indian Point nuclear facility produce most of the city’s electricity. Still, 375 Pearl will come online at a time of increased attention to energy consumption. In August, Mayor Bloomberg’s office released a benchmarking study that disclosed the energy use and efficiency of thousands of commercial buildings, and such disclosures will soon become annual. In this new era of transparency, buildings like 375 Pearl Street will stand out as conspicuous energy gluttons.
“As resources become tighter and energy prices continue to rise, increased scrutiny could be directed at a building like 375 Pearl Street,” said Jared Rodriguez, an energy expert with the LeFrak organization, who worked on the city’s benchmarking study. “A building like that, because it consumes so much power, makes energy more expensive for everyone.”
Like so many contradictions in the fast-growing world of computing and technology, 375 Pearl Street makes both perfect sense and none at all. A colossus of a tower with an imposing concrete façade and sparse vertical lines of dark-tinted windows, the property hides in plain sight. Though it sits smack in the middle of the oft-photographed panorama of Lower Manhattan, its bland profile renders it all but invisible.
Most often, data centers are similarly faceless, but are typically located in the middle of nowhere—not on prime urban turf.
“Why do you need to be in Manhattan, where you have the world’s highest energy and real estate costs?” Barry Novick, a global data center manager for the financial company BlackRock, asked, echoing a sentiment voiced by several experts interviewed for this article who doubted the economics would add up.
Even a person with a role in the project acknowledged it was a gamble. Beneath the skepticism lies even a more fundamental question: Is New York’s tech boom really here to stay?
“There is definitely the sense that not all of the tech companies we see growing in the city are going to be around in a few years, and at some point there will be a shakeout,” said Andrew Roos, a landlord and top leasing broker who owns buildings with tech tenants and is familiar with analyzing their credit risk.
Even shoo-in tenants for 375 Pearl Street such as high-frequency trading firms, which depend on nanosecond connection speeds, have come under heavy fire from regulators in recent months, and some observers question the sector’s future.
For others, though, a facility like 375 Pearl Street seems long overdue.