New York City’s Business Group Criticizes Hochul’s Data Center Construction Ban
The primary business advocacy group in New York City has strongly criticized Governor Kathy Hochul’s recent one-year ban on new high-performance data center constructions. They describe the move as counterproductive and detrimental to business interests in the state.
Last week, Hochul signed an executive order halting the development of “hyperscale” data centers—those that require at least 50 megawatts of power—for a year. The governor argued that this delay is crucial for the state to carefully manage the rollout of these centers.
However, Steve Fulop, CEO of the New York City Partnership, which advocates for 300 of the city’s largest companies, including many from Wall Street and the financial services sector, expressed concern that this decision could set New York City back in the race to adopt AI technologies.
During an appearance on 77 WABC’s “Cats Roundtable,” Fulop remarked, “Ultimately, the solution will be to build a data center or not build a data center.” He went on to explain to the host, John Catsimatidis, that imposing a moratorium makes it seem riskier to invest in New York compared to other states.
Fulop added that such a ban sends a clear message about New York’s competitive position. He cited neighboring states like Pennsylvania, which continue to advance economically without halting progress in constructing data centers that work with local communities.
Data centers are vital operations, housing numerous servers and related equipment that store and manage vast amounts of digital data. Fulop noted that when anyone searches for information online or streams a video, they are engaging with a data center.
“We need more access to data,” he stated emphatically.
He criticized the decision to impose a one-year grace period as ineffective, saying, “A year of procrastination and delay accomplishes nothing.” Fulop indicated that if New York City wishes to remain at the forefront of emerging AI technologies, it requires the support of data centers.
In defense of her decision, Hochul described the one-year freeze as the right approach, which quickly attracted criticism from former President Trump. She maintained that local governments lack the capacity to negotiate effectively with major tech companies on an individual basis.
While there are 30 pending applications for data center construction in the state—something Hochul referred to as “flooding the area”—she emphasized the need to ensure that large companies can create jobs while addressing residents’ anxiety about high taxes and energy concerns.
Hochul insisted that New Yorkers desire protection but also want certainty for businesses. She defended her administration’s record on job creation and development projects, asserting that her actions are not against business or labor interests.
However, the construction industry has voiced strong opposition to the one-year ban. Critics argue that Hochul has surrendered to the political left, specifically lawmakers aligned with the Democratic Socialists of America, who have challenged the expansion of data centers due to environmental concerns. State Senator Kristen Gonzalez, a DSA member, argued that technology should serve to enhance lives rather than worsen issues like water pollution or high utility bills.
Meanwhile, Bruce Blakeman, a Republican gubernatorial candidate who advocates for bolstering the data center sector, accused Hochul of adopting the moratorium out of fear of losing political support from far-left factions.
“Kathy Hochul puts the interests of others above New Yorkers, even if it stifles economic opportunities while families struggle with high taxes and utility bills,” he stated.
Despite the backlash, Hochul’s team has maintained that her decision is not politically motivated or tied to her re-election efforts.
