The effort to bring data centers to Southwest Michigan

 

BERRIEN COUNTY, Mich. -- As data centers multiply across the Midwest, State Rep. Joey Andrews wants to see those projects come to Southwest Michigan.

"The South Bend area is getting $15 billion in data center investments right now. I'd like that, up here, just a little bit north of the border," he said. "It's more a question of, 'Do you want this investment in your state or not?'"

He sponsored a bill that passed this week, which, together with a second bill, will create the kind of tax incentives other states offer to data center developers.

"One bill creates a sales tax exemption for these kind of hyper-scale enterprise data centers. The other one creates use tax exemption," Andrews said. "Basically, only states that have the sales and use tax exemptions get these large-scale, like Google, Meta, Microsoft, data centers. So, by putting these in place, we open the doors in Michigan for those investments to be made here as well."

In general, this effort has garnered a lot of bipartisan political support, passing 64 to 45 in the Michigan House, as well as community support.

"This is something that's been in effect in our neighboring states for a number of years," said Andrew Haan, Cornerstone Alliance vice president of business development. "We've watched as billions of dollars of investment and jobs have passed Michigan by."

"I believe my party, the Democratic Party, we have to be more economic focused. And one of the things that this legislation allows us to do is to attract business and to attract investment in the communities that haven't seen it for a long time," said Berrien County Commissioner Chokwe Pitchford.

He argues the jobs, tax revenue, and infrastructure investments that come with data centers make the incentives worth it.

"I don't think people truly grasp how transformative massive investments like enterprise data centers can be for a community," Pitchford said. "This was a major win for getting a data center to come to Southwest Michigan."

However, opposition from environmentalists was big enough to stall the legislation for months. Their concerns include water and energy supply, plus the impacts on Michigan's climate goals.

Data centers demand massive amounts of electricity to run computers nonstop and water to cool the servers that heat up as they operate.

"We heard a lot of those concerns, and we tried to address them in the legislation," Andrews said.

He said they revised the bills and put in rate-payer protections and a mandate for municipal water use to protect the state's groundwater.

"I think we tried to put a lot of backstops in," he said. "And we actually, our legislation has more environmental protections if you take all that together than any other state that's done this before."

He is not concerned about power supply, though, citing the upcoming restart of the nearby Palisades Nuclear Power Plant.

He wants to see Southwest Michigan reap the benefits so many other Midwest regions are seeing because of the development of data centers.

"A lot of the places they're looking at are like Benton Harbor; they have an industrial past and an uncertain present," Andrews said. "The knowledge economy, I think, can be a big future for us here in Southwest Michigan."

The bills won't become law until Michigan Governor Gretchen Whitmer signs them, but it appears likely she will.