A company fronted by a man who spent two years in federal prison for his role in a money-laundering scheme has acquired a shuttered factory in the North End of Niagara Falls as part of a larger plan to develop a data center and logistics and warehousing hub.
Michael Bagley, president of the Falls-based technology firm, 9 Lives Digital Group, told the newspaper on Wednesday that his company has purchased the former Globe Metallurgical property located at 3807 Highland Ave. where it intends to establish an advanced artificial intelligence data center.
Bagley confirmed during an interview with a reporter that he is the former owner and operator of Jellyfish Partners, LLC, a Washington, D.C.-based private intelligence company that provided operational support to clients, primarily in Mexico.
In 2019, Bagley was ensnared in an FBI investigation involving the laundering of proceeds from drug trafficking that resulted in him being charged with money laundering by the federal government.
Prosecutors alleged that Bagley met on several occasions with individuals he believed to be affiliated with a Mexican cartel to discuss his ability and willingness to launder what he believed were the proceeds of drug sales. He was charged after allegedly helping confidential FBI sources posing as cartel representatives to hide more than $250,000 that he believed was obtained through illicit means. In total, the U.S. Attorney’s Office said Bagley accepted $251,000 in funds he believed to be the proceeds of drug sales from a cartel.
The Daily Beast reported that prosecutors in Bagley’s case suggested he may have had a working relationship with a real cartel boss, noting in a detention memo that he allegedly told government informants: “I wanna let you know that I’m also moving for (Ismael “El Mayo” Zambada) in Mexico City as well, with his number one guy.”
The Daily Beast described Zambada, or “El Mayo” as he’s known, as having taken over the Sinaloa cartel after Mexican authorities arrested his infamous predecessor, Joaquin “El Chapo” Guzman, and extradited him to New York for trial.
The Daily Beast also reported that FBI agents said Bagley told them during a search of his home that he lied about his connections to the Sinaloa cartel and that he had never done anything like this and that he was “was not involved in any other large-scale criminal conspiracies.”
Bagley was sentenced to four years in prison in February 2019. Published reports indicated he served two years.
When asked about his criminal background on Wednesday, Bagley said people shouldn’t believe everything they read and that he is now focused on moving on from his past mistakes and helping to redevelop the Western New York community.
“There are left turns, right turns and wrong turns and everyone makes them,” he said. “It’s all about coming back.”
He said Niagara Falls has been “down for a long time” and said his company’s project represents an “opportunity for it to make its way back up.” He said he hopes his personal story and the city can share in a combined “comeback” story.
“It’s a comeback story and Niagara Falls needs one, too, so we’re in it together. I’m proud of the comeback,” he said.
While in federal prison, the Alexandria, Virginia native started a bottled water company called Jellyfish Water, marketing the product as “hydrotherapy for the soul” with bottle labels encouraging consumers to “Refresh. Reset. Rejoice.”
“It was just a few months into my sentence where I could clearly see that all the water that I was drinking every day was keeping my body, mind and soul hydrated, focused and healthy,” Bagley’s message to customers on his water company’s website reads. “About 12 months from my release date I started thinking about the path forward for myself. What was I going to do to survive, adapt and succeed in life?”
On Wednesday, Bagley said he’s now focused on redeveloping the Globe property as part of a larger plan to capitalize on Gov. Kathy Hochul’s Empire AI, an initiative backed by $400 million in public and private funding to bolster artificial intelligence development in Western New York. Bagley said he and his partners also view the property as a potential logistics and warehousing hub for companies on both sides of the border in the region.
“This is a new life for me and a new career for me and a new start,” he said.
The Globe Metallurgical plant last operated as a silicon metal manufacturing facility in 2018 when the plant’s parent company, Globe Specialty Metals, Inc. announced that it was shutting down the facility, idling 100 workers.
The Falls site had a production capacity of up to 27,000 tons of silicon metal annually and was among the “oldest” plants of its kind in the U.S., according to the company. It previously operated under the banner Airco Alloys, SKW before becoming Globe Metallurgical in 1994.
A former senior legislative aide to U.S. Sen. Patty Murray, D-Washington, Bagley said he and his partners at 9 Lives Digital Group acquired the Highland Avenue property several weeks ago and initiated a site-wide cleanup that has involved the demolition of some of the structures on the property.
Bagley said 9 Lives Digital Group, which also has an office in Algeria, were attracted to the 22-acre property for several reasons, including that it is already home to a 100-megawatt substation and is located near the abundance of hydroelectric power Niagara Falls has to offer.
Bagley said the site has previously been subject to environmental remediation work and is essentially ready for the next phase of its development.
“It’s not a site clean up if you will or a brownfield property starting from zero,” he said.
Bagley said he expects the Falls project will take between 12 and 18 months to develop and would require the hiring of 50 to 100 workers, including electrical and construction positions, over the next two years.
According to a release from the company, 9LDG uses “energy resources such as natural gas being flared or excess production from renewable sources to power high performance computers and modular data centers.” The company says its facility will have lower environmental impacts because it will rely on infrastructure powered with “otherwise wasted, stranded, or clean energy sources.”
“We are thrilled to be moving forward with the redevelopment of this property,” Bagley said in the company’s press release. “Establishing an AI data center in Niagara Falls is a crucial step in our mission to advance technology and bring high-quality jobs to the region. This project also aligns perfectly with Governor Kathy Hochul’s exciting AI initiative, further positioning New York as a leader in technology.”
In the company’s press release, the project received an endorsem*nt from Kory Schuler, executive director of Niagara USA Chamber, who described the potential transformation of the property into a center for technology as a “significant development” for Niagara Falls and Niagara County.
“It not only breathes new life into industrial land, which we have a lot of, but also highlights the growing importance of technological skill sets in our community as we strive to compete on regional, national, and global levels,” Schuler said.
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