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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.
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Let me get this straight… in April, Braun said “Hoosier taxpayers deserve clear accountability for how their dollars are spent . . . We will take any necessary action to protect taxpayers going forward.”
Then on Monday he selected this new IEDC board.
Then on Wednesday, the new Braun board approved $168 Million in tax breaks to unnamed Big Tech data centers who will bring essentially NO JOBS, suck up billions of gallons of our water, and increase our electric bills?
What are we even doing here!?
I hope we have the resources to support these mega users. I have been monitoring energy usage during this heat wave and every day this week a “Capacity Advisory” has been initiated due to high demand versus available generation capacity. To support these energy sucking ventures additional capacity will be needed to support them while maintaining current usage.
Also hope good water supplies are available as these have the capacity to use up to 5 million gallons of drinking water per day. This is the equal to the daily usage by 16, 667 homes.
So one might logically conclude that mega data centers are really leeches sucking up our electricity and water.
Not to mention huge taxpayer funded incentives.
It’s hard to believe that Braun is “fixing the IEDC” when he’s paying data centers just over $930,000 per job in tax incentives just to help him ensure that coal plants in Indiana can’t ever go offline. Because I guarantee that his “energy demand plan” will have “We have incredible demand from data centers and can’t afford to take coal offline, ever!”
And these are jobs that they aren’t even bothering to tell us the average salaries for. If they were high-paying jobs, we’d know.
https://www.ibj.com/articles/gov-mike-braun-orders-energy-demand-plan
So instead of just listing what appears to be just negatives, what are the positives? Besides jobs and other taxes, certainly having our data here in the US rather than abroad would seem safer! We all use data that isn’t really “in the clouds”. It has to go somewhere and everyone wants it but “not in my back yard”! Then, maybe start giving up smart phones, computers, home businesses, online shopping! We have all contributed to this beast! Some centers have made very nice concessions to protect immediate neighbors. The water usage is for all 4? We should be fine in central IN. The electric company has already planned a hike in rates. I received notice of that prior to this. It would be nice if info is posted with pros and cons, but we all need to research it carefully bc a lot of false info is being put out.
You do realize hackers can hack anywhere regardless of where the data center is located, right?
Giving out $168 million in tax credits for 180 jobs … we are encouraging data centers to come here so that coal companies can turn around and claim they can no longer retire their plants. And, the water companies will turn around and charge us more since they have higher demand for water.
So, what you’re saying is, you’re willing to breathe dirtier air and pay more for water because you think data centers are worth it.
And that’s leaving out that they want to build all these data centers because the intent is to automate a lot of white collar jobs away…
IEDC needs to detail the taxes that these companies will actually pay whereas there’s always an amount for the discount. What’s the gain?
$168 million in incentives for a grand total of 180 new jobs??? More than $1 million per job? Plus tax cuts on their capital equipment, so that they don’t really add value to the local tax base?
This is even more insane than giving tax incentives to warehouses that pay well below the median income.
Ok, in fairness it was $933,333,333 per job!
The “new” IEDC must be considering the construction jobs, payroll, gas purchased, local meals, etc. on the almost $4B in project costs. So perhaps not exactly fair to say $933K – $1M per 180 jobs (though that does not sound like a net lot of jobs), because $4B in construction work is a lot of supplies and construction jobs that will go into that work…before they turn over the keys and have 180 new EE’s there.
Steve, the “construction” of the data center equipment will be done elsewhere. These are just big warehouses (with big AC units) with concrete floors and minimal finishes. Built in months; not like the huge construction impact of a convention hotel, airport, or hospital.
Braun’s budget cuts don’t apply to corporate welfare funding like those cuts do to schools for deaf and blind children .
Of course any center or business with data can be hacked! The point is, in theory it should be safer here than say in China or any place less likely to safeguard it or sell it. If you think they won’t be coming somewhere you are wrong and I’ve seen the information on noise levels etc. The water is recirculated numerous times before being discarded. I guess the solution is stop using your computers and smart phones if you don’t want data centers.
“In theory”, sure.
Can you even explain why data centers should be located here, given the preponderance of high speed wired and wireless internet?