In 2018, the small northern Norwegian city of Bodø was presented with a unique and lucrative opportunity to enter the rapidly growing international data center marketplace. The proposal would have been both an outstanding source of financial growth and cutting-edge development of municipal smart technology that will be sweeping the globe in the coming months and years.
The city's proposed development partner was Borealis Engineering, a Norway company specifically created to lead the development of a $500 million data center project in Bodø. Danny Hayes is one of the principals leading Borealis Engineering in developing a joint venture with Bodø that would direct 10 percent of the data center's revenues to the city for its smart city technology projects.
The data center, to be known as Datasenter SPV, was to be 20 percent owned by the joint venture between Borealis Engineering and the city, with the remaining ownership with investors and financing banks. At an initial valuation of $500 million, the joint venture was set to provide $100 million in equity to the joint venture. As a 49 percent shareholder in the joint venture, Bodø would have been just under 10 percent of Datasenter SPV without any initial capital obligations.
Unfortunately, Norwegian reporters Markus Jensen and Geir Are Jensen of Bodø Nu began a press campaign against Borealis Engineering generally and Danny Hayes specifically in an effort to discredit the facilitators of the Datasenter SPV project. The campaign was constructed on behalf of previous partners of Borealis Engineering and Danny Hayes who wished to see the project collapse so long as Hayes had any involvement. Borealis Engineering asserted its rights to proceed with litigation as a result of the smear campaign instigated by Bodø Nu, and the situation was addressed by Norway's Press Professional Committee (PFU).
As one of the largest local stories ever to hit the small town of Bodø, other news outlets in Norway followed the lead of Bodø Nu in reporting untrue and unsubstantiated claims against Borealis Engineering and Danny Hayes. Reporters failed to conduct any due diligence into the role of Borealis Engineering and Hayes in the Datasenter SPV project and rather than properly describing them as facilitators of financing, they were held in the press to have represented that they personally would provide $500 million of financing directly to the project. Additionally, wild and unfounded allegations regarding fraudulent share theft, money laundering for the illegal drug trade, and even direct scams against the city of Bodø were made recklessly and without regard for truth or fairness.
Coupled with a general misunderstanding of capital formation and development of these types of projects, the local negative and false reporting led to the eventual collapse of the joint venture between Borealis Engineering and Bodø and the entirety of the data center project.
Although the data center project had been destroyed, Danny Hayes and Borealis Engineering eventually received thorough and fair reporting through Norway's national public broadcasting agency, NRK.
Their investigation went into depth about the break-up between Danny Hayes and the original entity created to work with Bodø, Borealis Industries. Former Hayes partners Trond Larsen and Kjell Ivar Hansen, along with Hayes' former attorney, Balbir Bindra, acted to dissolve Borealis Industries while forming a new entity, Arctic Capacity AS, to compete directly against Hayes and his remaining partners in the Bodø joint venture project, Simon Flack and Soheila Yalpani. Hansen, Larsen, and Bindra decided that they only wanted to pursue fiber networking and data center projects, while Danny Hayes and the other members insisted they should continue to pursue Bodø's smart city project for the use and benefit of the city and as a model for similar future developments.
In addition to promoting the negative and false press campaign described herein, Bindra withheld documents that established the true and correct ownership of Borealis Industries, which deprived Hayes and Yapani of proof of ownership in Borealis Industries. Danny Hayes and his remaining partners created Borealis Engineering shortly thereafter in order to move forward with Bodø.
Eventually, Norwegian news outlet, NRK, established that Borealis Engineering's partners and financiers were actually able to fully finance the Datasenter SPV project. Their investigative reporting established the veracity of Hayes and Borealis Engineering's financing proposals and the obvious capacity of major financial institutions and the world's largest engineering firm, AECOM, to commit to the project's financing and development. Danny Hayes' role was further clarified as representing investors and outside companies that were interested in investing in the project.
While Arctic Capacity continues to promote the data center project to Bodø (using the contacts and commitments secured by Hayes and Borealis Engineering), Arctic Capacity will not be designating 10 percent of the data center revenues to go back directly to the city of Bodø. Based on expected revenues of a data center of the size and design originally proposed for Bodø, the loss of municipal revenue could easily amount to millions of dollars each year.
Bodø's municipal taxpayers and citizens should feel rightfully indignant about the lost opportunity the city has suffered because of greed and a false media narrative campaign against Danny Hayes and the Borealis Engineering team. This unfortunate series of events has had an obviously detrimental effect on the community of Bodø and the region. International investors pay attention to unusual local sensitivity to media attacks and the possibility of exposure to corruption that impacts investment value.
