A $1 billion Microsoft data center is planned for LaPorte. A proposed $1.3 billion data center in Chesterton is currently off the table. So why one and not the other?
LaPorte Mayor Tom Dermody is passionate about growth and development. He wants to expand the city’s population and tax base.
When Chesterton residents learned of a data center project proposed for the closed Brushy Golf Course, they organized a protest. Provident Realty Advisors, which had hoped to build a data center at the site, dropped its plans and canceled a public forum about the project that had been scheduled for June 19.
Chesterton Town Council released a lengthy statement about the now-defunct proposal: “It is important to understand that the Town of Chesterton did not vote for Provident; Provident came here,” the statement said.
Heather Ennis, president and CEO of the Northwest Indiana Forum, said at least four communities in Northwest Indiana are currently trying to attract Provident.
Andrea Pearman, owner of Diversified Marketing Strategies, handles public relations for Provident. She’s learned a lot about data centers since negotiations began to build the Hammond data center a few years ago. What Provident is building isn’t the kind of thing people are familiar with. “Bitcoin servers are very noisy. They’re cheaply built, but they’re very noisy.”
But that won’t be the case for the Microsoft data center planned for LaPorte, or the one Provident wants to build.
People need to be educated about data centers, Pearman said.
“Everybody’s streaming now. Where do you think streaming is going to come from?” she asked. “I think they think it’s going to just magically come.”
“These aren’t just fluffy clouds in the sky,” Pearman added.
Ennis said the data center is being built in Northwest Indiana because of efforts to build a robust data transmission infrastructure known as the Quantum Corridor.
“We’re trying to build that infrastructure to be the next wave of infrastructure, just like utilities like NIPSCO and Kankakee Valley REMC brought electricity to the general public. It will essentially be a public utility,” she said.
“Northwest Indiana is definitely a good place to put a data center, and we need data centers,” Pearman said.
Indiana’s relatively low property tax rates are a big attraction. “Developers have a choice: Illinois, Chicagoland or Northwest Indiana. Which one do you choose?” Pearman says.
LaPorte Mayor Tom Dermody said Friday that a data center built in the city would attract vendors, customers and other economic development. “It just makes sense. From day one we’ve said we want to be the best LaPorte we can be.”
Bert Cook, executive director of the LaPorte Economic Development Partnership, puts the data center project in perspective: The city’s taxable value is $815 million. Spending $1 billion on a data center doesn’t mean that’s what the property will be assessed for, but “when you say $1 billion in capital investment, you get an idea of ​​how big that is relative to the city. It adds a huge amount of new assessed value to the taxable value.”
It will also create 200 new, very well-paying jobs, which is no small thing to take lightly.
Dermody hopes the new data center will help lure back young people who grew up in LaPorte as the city continues to improve its quality of life. His goal is to have a population of 30,000 by 2030. After decades of stagnation, the city’s population has been growing in recent years.
LaPorte’s slogan, “Maple City,” referring to its many trees, is being replaced by “lakeside living,” Dermody’s way of promoting quality of life in a city surrounded by several lakes.
Microsoft is a “great supporter of education” and will help the school system, Dermody said.
The same goes for the property taxes that data centers generate.
A statement from Chesterton Town Council expressed disappointment that Provident had not done enough to educate residents about its plans.
“There is absolutely no way that the Town Council can support this project at its current size, particularly in this location,” the statement said. “If this proposal is to be seriously considered, the number, size and height of buildings must be significantly reduced to fit on the site, and all of the legitimate concerns expressed by the Town Council, Planning Commission and residents must be appropriately addressed.”
“Meanwhile, the council is happy to work with Provident to identify another suitable site within the town of Chesterton for a suitably designed data centre,” the statement continued.
Chesterton doesn’t have a specifically designated industrial park like many other areas, but Ennis noted there is available land near Urschel Laboratories in the Coffee Creek development east of Indiana 49 near the entrance to the Indiana Toll Road.
LaPorte’s growth ambitions also include annexation. The land on which Microsoft is building was recently annexed.
The former Brushy Golf Course site is partially within the town limits but not entirely within the town limits.
“The Brassey property is privately owned by Brassey Development LLC and PPM Chesterton LLC, and we look forward to working with them, potential buyers and developers to find the best property for Chesterton,” said City Council Member Jennifer Fisher.
Some have suggested the golf course owners should donate the land to the Shirley Heinz Land Trust, which preserves land in its natural state throughout Northwest Indiana. Ennis doesn’t think that’s a fair request for owners of such a large amount of land.
Among other ideas being discussed regarding the golf course development is zoning.
“How will building a 700-home housing development on the former Brushy Golf Course site affect schools and congestion?” Pearman asked.
By contrast, data centers don’t see as much vehicular traffic, she said.
Fisher said he’s not against data centers.
“Through the concept review, the Town of Chesterton learned that data centers provide critical infrastructure for storing, processing and accessing the vast amounts of data generated by the use of advancing technology in today’s society. Data centers also generate significant revenue and play a vital role in driving innovation and the global economy,” she said.
“Another lesson is that City Council’s initial reaction was correct – that for a project of this magnitude, the developer should make a significant effort to educate residents and answer their questions and legitimate concerns through a series of public forums long before it goes before the Advisory Planning Commission for concept review. This was strongly encouraged but did not happen. This is the main reason why City Council took the position it set out in its public statement,” she said.
Chesterton remains committed to economic development in both commercial and industrial areas, Fisher said, the benefits of which include “diversifying the tax base and creating jobs and services that will continue to enhance the quality of life our residents enjoy.”
“We are very fortunate to have such a great team working towards smart economic and business development for our region, including the Duneland Chamber of Commerce, Indiana Dunes Tourism and the Northwest Indiana Forum, and we’re very grateful to them,” Fisher said.
Pearman said multi-billion-dollar data centers are a game changer for certain communities, a sentiment Cook agreed.
Think of Microsoft’s data centers as billion-dollar magnets for economic development.
“Just two weeks after announcing this project we have already seen significant interest from suppliers, potential customers and trading partners,” Cook said. “Undoubtedly, a development of this magnitude will attract significant attention and generate significant momentum, which we intend to make the most of.”
“The message we’ve heard so far is that Microsoft is one of the greatest companies in the world. If they’ve found the characteristics they need to succeed at LaPorte, maybe my company should too,” Cook said.
“We’ve already had some of those calls, some businesses wanting to look at the sites and types of buildings that are available. It’s incumbent on us as a community to take advantage of that. It would be really disappointing if as this project goes forward we don’t see as much other development happening.”
Doug Ross is a Post-Tribune freelance reporter.
