(Michigan City, IN) - A financial agreement along with tax abatement have been approved for a data center that recently started being constructed in Michigan City.
The September 2 decision by the city council was made after a more than three hour overview of the project and hearing from supporters as well as opponents.
So far, the operator of the data center has not been publicly disclosed but will be once all of the legal work tied to the project has been completed, said John Peret of Phoenix Investors, the current owner of the property.
Peret described the operator, though, as a U.S. based “Global 50 company in the data center world.”
The agreement calls for one time payments of $5.5 million to the city; $1 million to the Economic Development Corporation Michigan City and $100,000 to the city’s Sanitary District once an occupancy permit has been issued.
There will also be annual payments of $500,000 to the city under the 40 year agreement.
Under the 10 year tax abatement, the amount of money collected from property taxes annually will increase from $22,000 to an estimated $926,000, officials said. Property taxes collected yearly goes up to an estimated $1.5 million once the tax abatement has expired.
The data center is going in at the former Anco and later Federal Mogul windshield wiper manufacturing plant vacant for nearly 20 years at 402 Royal Road on the city’s east side.
The agreement and tax incentives are viewed as good faith offerings from both sides since a data center already complies with the current land use zoned for manufacturing and the property is privately owned.
“They don’t need the city,” said Council President Dorothy Tillman.
As many as 800 construction jobs are expected to be created until the facility is completed.
“That’s weeks, months and even years of steady business for our hotels, restaurants and retailers,” said Michael Schick, General Manager of 4411 Inns and Suites along U.S. 12 close to where the data center is planned.
Peret said at least 30 people in high skilled positions will work there with other permanent jobs in areas like maintenance and support.
Supporters spoke about the potential for even more new jobs from other companies that might come to provide the data center with parts and other services.
“I believe this type of development will help us,” said Mark Yagelski, a resident and member of the LaPorte County Council.
“I feel it’s the right decision for all of us,” said City Councilman Tim Bietry.
Opponents expressed concerns over things like noise for nearby residents and NIPSCO electric rates going up to offset the utility’s cost of delivering the large amount of power required for data centers to operate.
Plans call for the creation of a maximum 8 foot earthen berm and other buffers dense with trees and bushes to absorb much of the noise, which will be under the maximum allowed under local codes, Peret said.
Rick Kalinski, Director of Economic Development and Public Affairs for NIPSCO, said upgrades to a nearby substation will allow the utility to provide the facility with ample power.
“These costs will not be passed on,” he said.
Some data centers are huge consumers of water for cooling their high density servers. However, plans here call for construction of a closed loop system allowing water for cooling to be constantly recycled after the initial fill up.
Opponents also urged the city to do what it can to hold representatives of the data center to their promises for limiting any negative impact it might have on quality of life.
“You have a chance to make it a national model of good so municipal officials from across Indiana and elsewhere will come here to Michigan City to see how data centers are done right, rather than them being an example of how to do them wrong,” said resident Deborah Shore.
