All data centers are not the same. They don’t all use incredible amounts of energy and water and make a lot of noise. They are not all enormous in size and at the forefront of an AI takeover. And in the case of the data center that Prism Capital Partners may be bringing to a North Jersey town, it will not lead to massive increases in the energy bills there.
Prism Capital Partners Principal Gene Diaz said as much this week in an exclusive interview with BINJE.
Diaz gladly addressed concerns about a potential data center that will go on his ON3 development in Nutley/Clifton, the one that caused an uproar at a recent Nutley town meeting and led to a story on NJ.com.
Here are Diaz’s responses to what he called misinformation being spouted by a misinformed public:
Will the potential data center use up too much energy? No, PSE&G says it can handle the ask, he said.
Will it raise energy bills in the area? Any data center anywhere in the 13-state PJM region will have the same impact. And in this case, it will be nominal.
Will it hurt the water supply in the area? The previous tenant was allocated 14 million gallons a day; this proposed data center will use less than 1 million.
Will it make too much noise? By DEP rules, the data center is not allowed to make noise higher than 55 decibels — roughly the level of two people talking normally, three feet apart.
So, what’s the uproar all about?
“Much of the public confuses data centers as being all the same — sort of super power-consuming, AI-profile-type data centers,” Diaz said. “That’s not what this is.”
The scale is the key distinction, Diaz said.
The massive AI data centers driving bans and protests elsewhere in New Jersey typically run over 1 million square feet. The facility that is zoned for Nutley would be a fraction of that size — roughly 250,000 square feet, spread across two stories, he said.
It would fit the profile of most data centers in North Jersey, Diaz said.
“About 90% of the data centers in New Jersey today service the financial services industry,” he said. “It’s the NYSE. It’s Bloomberg. It’s Morgan Stanley. It’s J.P. Morgan. For latency, for trading, they need to be close to the financial center of New York City.
“Not all data centers are created equal.”
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Here’s the biggest point in all of this: Nutley not only can’t stop it — they asked for it, Diaz said.
The lot in question sits across Kingsland Street from ON3’s main campus. It served as a warehouse for Roche, the property’s previous owner.
When Diaz and Prism acquired the site, they offered to build a more modern warehouse. That was rejected by the town. It didn’t want more trucks.
They came back with a multi-family project — that was rejected by the town. It didn’t want more kids crowding its schools.
Then it was senior housing — that was rejected, too. The town, Diaz said, seemingly was going to reject everything.
That led to litigation, which led to a settlement last year. A settlement that included the zoning of a data center.
“Eventually, the town said, ‘Why don’t you build a data center?'” Diaz said. “So, that’s what we’re doing.”
Diaz hasn’t been secretive about it. A sign announcing that the plot is zoned for a data center has been on a fence around the property since the end of 2025, he said.
That the issue is coming up now is part of a longer-standing frustration that Diaz — and almost every other developer — has with the state. People can appeal and delay projects without presenting any evidence of why they will be harmed, or why a project is illegal, he said.
“You have a two-part system that doesn’t jive,” Diaz said. “An individual property owner can’t challenge a DEP permit or a DOT permit unless they can show a particularized harm.
But they can hold up a site plan approval for two years just by paying a filing fee — even if they may not have any harm and may not even live in the town.”
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Here’s a key note in all of this: Diaz is indifferent about what goes on the property; he just wants to get a return on the investment of Prism Capital Partners.
Nutley Mayor John Kelly III told Nyah Marshall of NJ Advance Media that no proposal for a data center has been put forward.
Diaz will be the first to tell you that’s accurate.
But there will be one, when Diaz finds someone interested.
“We’re marketing the site for someone like Digital Realty, or Brookfield, or Citibank to come along and say, ‘I need a new data center, I’d like to put it here,'” he said.
He knows the town can’t stop him.
“The zoning is the zoning,” Diaz said. “They can’t just keep saying, ‘I don’t want this, I don’t want that,’ and then not have anything they want.”
Of course, if the town blocks a data center, Diaz knows he has another card to play.
“This data center zoning is a result of a settlement agreement entered into with the city of Nutley,” he said. “If they breach the settlement agreement, we can go back and build the industrial building, which people seem to have wanted even less.”
If it comes to that, the parcel would truly symbolize all that is wrong with New Jersey, Diaz said.
Overregulation, in his view, is killing the state’s economy.
“We were the fifth-largest white-collar employment market in the United States, and we’re losing that,” he said. “Without all that employment, without all those payroll taxes, without all the income taxes from those businesses — we won’t be able to afford the great things New Jersey has, like the education system and the health care system.”
