IEDC board approves incentives for four planned data center projects
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In a sign of how strongly demand for data centers has grown in recent years, the Indiana Economic Development Corp. on Wednesday approved tax incentives for four large-scale data center projects during a single meeting.
The four projects—three in the Indianapolis area and one in northern Indiana—were among eight different projects for which the IEDC’s business development committee approved incentive offers.
The IEDC estimates that the data center incentives are worth an estimated $168 million in total tax savings for the combined projects over the next 35 years—but the organization has not disclosed the companies that stand to benefit from the incentives.
During the meeting, the IEDC referenced each project by a code name—a way of talking about the projects without publicly revealing the names of the companies involved. All four projects were described as hyperscale data centers—a phrase that generally refers to large data center campuses that can encompass multiple buildings and hundreds of acres.
For each of the four projects, the IEDC committee approved a type of incentive that legislators created in 2019 to target data center development. The incentive exempts data center operators from having to pay sales tax on the purchase or lease of the computers, servers and other equipment in the data center. It also exempts the operators from having to pay utility taxes on the purchase of electricity to run that equipment.
The IEDC has now approved data center tax credits for 11 different projects, according to the IEDC’s online transparency portal.
Each of the four projects approved Wednesday is in line to receive the data center tax break for an initial period of 35 years, renewable for up to three additional five-year periods after that if the recipients make additional minimum investments. In each of the four cases, the IEDC estimates the value of the incentives at $42 million over that initial 35-year period.
The projects:
- Project Louie, a Morgan County project in which an unidentified end user has pledged to create 50 jobs and invest $1 billion by 2029.
- Project Flo, a Marion County project in which an unidentified end user has pledged to create 50 jobs and invest $1 billion by 2029.
- Project Redline, a Hancock County project in which an unidentified end user has pledged to create 50 jobs and invest $1 billion by 2029.
- Project Maize, a LaPorte County project in which an unidentified end user has pledged to create 30 jobs and invest $832 million by 2034.
Within the past six months, IBJ and other news outlets have reported on planned data center projects in Marion, Morgan and Hancock Counties. The names of the end users for the Morgan and Marion County projects have not been publicly disclosed.
A Hancock County project was proposed by Shelbyville-based Surge Development LLC, which said it did not yet have an end user signed on to the project. Surge withdrew its rezoning request for the project last month after significant public opposition.
IEDC spokeswoman Erin Sweitzer said the IEDC cannot confirm whether the previously reported projects are the same as those approved for incentives on Wednesday or whether they represent additional projects. Sweitzer also declined to identify the companies set to receive the incentive offers approved on Wednesday.
Chris King, an IEDC board member who is the principal of Surge Development, recused himself from the IEDC meeting before the data centers were discussed and he did not vote on incentives for any of the four projects.
Roche incentives
Also at Wednesday’s meeting, the IEDC committee approved incentives for one project for which the recipient is publicly known.
In May, Swiss pharmaceutical and diagnostics company Roche announced it plans to invest up to $550 million and add about 650 jobs at its Indianapolis-based diagnostics unit. The IEDC committee approved a total incentives package of $20 million for Roche based on those plans—$10 million in EDGE tax credits and $10 million in redevelopment tax credits.