Since then, tech giants like Amazon, Google, Microsoft and Meta have decided to pump more than $15 billion into construction of data centers across the state. Major new data centers are springing up in LaPorte and nearby New Carlisle to help meet the demand for artificial intelligence, as well as the growing need for data for streaming, medical records, banking and countless other functions in an increasingly digitized society.
"This has gotten crazy how good it's gotten" said attorney and developer Tom Dakich, who spearheaded the lobbying effort for the data center legislation. "Indiana has become a leader on a national basis for data center advancement."
The Indiana Data Center Tax Incentive, sponsored by state Rep. Ed Soliday, R-Valparaiso, state Rep. Carolyn Jackson, D-Hammond, and state Rep. Earl Harris, D-East Chicago, helped make Indiana one of the most competitive states nationally for data center development. It offers tax exemptions on energy and equipment for new data centers built in Indiana for up to 50 years, which was the longest exemption period in any state when it was passed.
Servers, routers, wiring, software and other equipment are exempt from the business personal property tax and state sales tax. Electricity purchases also are exempt from state sales tax.
The hope was to provide financial incentives for large technology companies to build data centers in Indiana. It's estimated the owner of each data center can save $1.75 million to $10.5 million in taxes in Indiana.
"Now it's time for Indiana to take the next step and to start using these data center assets for more research purposes and for teaching purposes and to make it part of a bigger initiative," Dakich said.
Dakich transformed a former coal-fired power plant at the border of Hammond and Chicago on Lake Michigan into a data center that is expected to grow up to $200 million in investment and 1 million square feet. It's expected to start a second phase of construction after reaching full capacity with large institutional clients.
"What we're doing with those massive projects is making Indiana better," Dakich said. "We never thought it would become this big. People credit that law. It created the tax incentives that made Indiana competitive with every state in the union."
Microsoft will invest $1 billion in a 245,000-square-foot data center in the Radius Industrial Park in LaPorte, the largest economic development project in city history. Amazon Web Services will soon start construction on an $11 billion data center that will employ 1,000 workers in New Carlisle, just east of the LaPorte County line in neighboring St. Joseph County.
Google plans to build a $2 billion data center that will employ 200 workers in Fort Wayne in northeastern Indiana. Facebook's parent company, Meta, is planning an $800 million data center that will employ 100 workers in Jeffersonville, across the Ohio River from Louisville in southern Indiana.
"All the big players in tech have come here," Dakich said. "Everybody's looking at it. We're really proud of the legislation. We didn't imagine there would be $11 billion projects. These are some big projects. That's bigger than we every thought it would become. It will mean hundreds of millions of dollars in new tax revenue and new jobs and economic growth."
Developers abandoned plans to create the opportunity for a $1 billion data center at the Brasserie Golf Course in Chesterton after encountering public opposition. Local economic development officials said they've been approached about more data center projects in Northwest Indiana. Merrillville is putting together a citizens data center advisory committee to prepare.
AI is driving much of the demand for new data centers. A Goldman Sachs study found AI would drive a 160% increase in data center power demand. Data centers are expected to account for 8% of electricity usage in the United States by the end of the decade, up from 3% in 2022.
"There's more data everywhere," he said. "AI is driving a much of the demand."
It also means jobs for organized labor, Dakich said.
"When we first built the data center in Hammond, we spent $800,000 a week on labor and design. As this gets bigger, it's going to continue to only get stronger," he said. "It's only going to get bigger."
© 2024 The Times (Munster, Ind.). Distributed by Tribune Content Agency, LLC.
