Michigan City mayor shuts down talk of data center project
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A proposed data center project in Michigan City does not have the support of city leaders, with Mayor Angie Nelson Deuitch saying the city and the developer could not come to an agreement on tax abatements.
Nelson Deuitch’s announcement comes after Inside INdiana Business was the first outlet to report on a potential $832 million data center development slated to be built on the city’s west side.
The project has already received tax abatements from the Indiana Economic Development Corp. (IEDC) that would total $42 million over 35 years if the buildout happened as planned. In exchange, the data center developer—whose identity has still not been made public—promised to create 30 jobs by 2034.
However, in a recent statement provided to our reporting partners at The Times of Northwest Indiana, Nelson Deuitch said the end-user’s proposal had “limited job creation and no assurances of community reinvestment or substantial tax impact.”
“Any major project of this magnitude must bring tangible value and benefits to Michigan City residents,” Nelson Deuitch’s statement said. “No formal proposal regarding local incentives has been brought to the City Council for consideration, and at this time, there are no plans to pursue the project. Michigan City welcomes innovation and responsible investment, but our administration will always advocate for economic growth that is equitable, transparent, and in the public interest.”
Michigan City Chief Administrator Kelley Smith told Inside INdiana Business that Nelson Deuitch was not available for an interview to answer further questions on the project.
According to Smith, the developer and the city began negotiating in May over a tax abatement package. Within the past few weeks the city presented its final offer. The developer didn’t concur, so the city is walking away from the deal, Smith said.
Multiple other Michigan City officials including redevelopment director Skyler York, Economic Development Corp. Michigan City President Clarence Hulse and city council members Tim Bietry and Nancy Mouldenhauer all did not respond to interview requests from IIB about the project.
Smith said many public officials have signed non-disclosure agreements related to the data center development.
The data center was eyeing a 67-acre site where the former ANCO windshield wiper factory sat on Royal Road. Property records show Phoenix Michigan City Industrial Investors LLC, bought the site for around $1.25 million in late 2022 and a 400,000-square-foot building remains.
Phoenix would look to lease the site to a separate end-user who would operate the data center. Smith declined to say who the end user is.
It’s not clear if the developer will continue to pursue a data center at that site. A representative from Phoenix has not returned messages from IIB seeking more information about the company’s plans for the property.
The Royal Road site is already zoned for light industrial use, meaning any end user can still operate a data center there without requiring approval from the city—they would just do so without any tax breaks that are common with new developments of its nature.
In northwest Indiana, grassroots groups in Valparaiso and Chesterton have pressured elected officials to scrap a couple of data center proposals within the last year, with opponents saying there are negative environmental consequences, and the centers suck up too much energy.
There are no items related to the data center on the agenda for the Michigan City Council’s Tuesday meeting.