LaPorte is getting a $1 billion Microsoft data center. The $1.3 billion data center that had been proposed for Chesterton is now off the table. So why one and not the other?
LaPorte Mayor Tom Dermody is gung-ho toward growth and development. He’s eager to see the city grow in population as well as tax base.
Chesterton residents got wind of the data center project that had been proposed for the shuttered Brassie Golf Course and organized opposition. Provident Realty Advisors, which had hoped to build a data center on the site, has moved on, canceling a planned June 19 public forum on the project.
The Chesterton Town Council issued a lengthy statement on the now-defunct proposal. “It is important to understand that the town of Chesterton did not go to 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 now trying to lure Provident.
Andrea Pearman, owner of Diversified Marketing Strategies, is handling public relations here for Provident. She’s learned a lot about data centers since negotiations to build Hammond’s data center began several years ago. What Provident is hoping to build isn’t what people might be familiar with. “Bitcoin servers are very loud. They’re built cheap, and they’re very loud.”
That’s not the case with the Microsoft data center to be built in LaPorte and the data center Provident wants to build.
People need to be educated about data centers, Pearman said.
“Everyone streams now. Where do they think streaming comes from?” she asked. “I think they think it just comes magically.”
“The cloud is not those fluffy clouds in the sky,” Pearman added.
Ennis said the data centers coming to Northwest Indiana are coming because of work put in to build a robust data transmission infrastructure, referred to as a quantum corridor.
“We’re trying to put that infrastructure in to be that next wave” of infrastructure, just like when electric companies like NIPSCO and Kankakee Valley REMC brought electricity to the masses. “It becomes essentially a utility,” she said.
“Northwest Indiana is definitely ripe for data centers, and we need them,” Pearman said.
Indiana’s comparatively low property tax rates are a strong lure. “Developers have a choice – Illinois, Chicagoland or Northwest Indiana. Which would you choose?” Pearman said.
LaPorte Mayor Tom Dermody said Friday the data center to be built there will attract vendors, customers and other economic development. “It makes all the sense. What we’ve said from Day 1 is we want to be the best LaPorte we can be.”
Bert Cook, executive director of LaPorte Economic Advancement Partnership, put the data center project in perspective. The city’s entire tax base is $815 million. While $1 billion for the data center doesn’t mean that’s going to be the assessed value of the property, “when you talk about a $1 billion capital investment, you get an idea of how large that is compared to the city as a whole. It’s a massive amount of new assessed value entering the tax base.”
It’s also 200 new jobs – jobs that pay quite well. That’s nothing to sneer at.
Dermody hopes the new data center will help LaPorte bring back young people who were raised there as the city continues to improve its quality of life. Dermody’s goal is for the population to reach 30,000 by 2030. After decades of stagnation, the city’s population has been growing in recent years.
The Maple City, the slogan referring to the many trees in LaPorte, is being shunted aside in favor of “Living the Lake Life,” Dermody’s way of promoting the quality of life in a city wrapped around several lakes.
Microsoft is “a great supporter of education,” Dermody said, which will help the school system.
So will the property taxes the data center will generate.
The Chesterton Town Council’s statement expressed disappointment that Provident didn’t do more to educate the public on its plans.
“At its current scale, and especially at this location, the Town Council could never support this project,” the statement said. “If the proposal were to receive any serious consideration, the number, size and height of the buildings would need to be significantly reduced to fit the site, and all legitimate concerns expressed by the Town Council, the Plan Commission and residents would need to be adequately addressed.”
“On the other hand, the Town Council would gladly work with Provident to locate another eligible site in the town of Chesterton for an appropriately designed data center,” the statement continued.
Chesterton doesn’t have a specifically designated industrial park the way many communities do. However, Ennis noted there’s land available near Urschel Laboratories in the Coffee Creek development east of Indiana 49 near the Indiana Toll Road entrance.
LaPorte’s eagerness for growth includes annexation. The land where Microsoft will build was annexed recently.
The former Brassie Golf Course site is partially but not completely within the town boundary.
“The Brassie property is privately owned by Brassie Development LLC and PPM Chesterton LLC. We look forward to working with them and potential purchasers and/or developers to find the right fit for Chesterton,” Town Council member Jennifer Fisher said.
Some have suggested the golf course’s owner donate the land to the Shirley Heinz Land Trust, which cares for properties throughout Northwest Indiana to preserve their natural state. Ennis doesn’t see that as a fair request for the owner of such a large property.
Among the other development ideas for the golf course that have been bandied about is a subdivision.
“Building a 700-home community on the former Brassie Golf Course, what is that going to bring to the schools and congestion?” Pearman asked.
Data centers, by contrast, don’t generate much vehicular traffic, she said.
Fisher said she isn’t opposed to data centers.
“Through the concept review, the town of Chesterton learned that data centers provide essential infrastructure for storing, processing, and accessing the vast amount of data that is produced by the use of advancing technology in today’s society. They also create tremendous revenue generation and play a vital role in driving innovation as well as the global economy,” she said.
“Another lesson is that the Town Council’s initial reaction was correct. That is, in the case of a project of this magnitude, the developer needs to put forth a significant effort to educate the public and answer its questions, and legitimate concerns, through a series of public forums, well before appearing before the advisory Plan Commission for concept review. This was strongly encouraged but did not happen, which is in large part why the council took the position it did in its public statement,” she said.
Chesterton remains committed to economic development, both commercial and industrial, Fisher said. The benefits include “diversification of the tax base, creating jobs and services that will continue to enhance the high quality of life that our residents enjoy.”
“We are very fortunate to have a great team working toward smart economic and business development in the region, including, but not limited to, the Duneland Chamber of Commerce, Indiana Dunes Tourism and the Northwest Indiana Forum, which we greatly appreciate,” Fisher said.
The billion-dollar data centers are a game-changer for certain communities, Pearman said. Cook agrees.
Think of Microsoft’s data center as a billion-dollar magnet for economic development.
“Just in the last two weeks since we announced the project, we’ve already been seeing a huge influx of interest from suppliers, from potential customers, trades,” Cook said. “Without a doubt, any development of this size and scale will draw great attention and create great momentum, and we plan to capitalize on that.”
“The messaging we’ve heard so far is Microsoft is one of the largest companies in the world. If they have found the characteristics they need to be successful in LaPorte, maybe my business should as well,” Cook said.
“We’ve already received some of those calls and had companies want to look at what kind of sites and buildings we have available. It’s now incumbent on us as the community to capitalize on that. “I would be really disappointed if, as this builds out, we don’t see a significant amount of other development to occur.”
Doug Ross is a freelance reporter for the Post-Tribune.
