Lawmakers OK tax breaks to lure mega-data center to Michigan

While Switch was quick to thank the legislature and community leaders who supported the tax breaks, and the politicians from both parties where patting themselves on the back, the opponents of the bill still feel that their major concerns were not addressed, pointing out that other industries would be forced to pick up the bill for state and municipal services that would be used by the data centers.

The legislation, passed late Tuesday night, exempts Las Vegas-based Switch and its clients from paying sales or use taxes on equipment at a planned mega-data center campus at the former Steelcase pyramid in Kent County. “We have assurances that the tax assistance that we are providing in this legislation to the data center industry will generate the jobs that have been promised”, said state Rep. Jim Townsend (D-Royal Oak). But he told The Associated Press the sales and use tax exemptions are “not just for one company”, and lawmakers narrowed the breaks from what was initially proposed. In a phone interview, Switch CEO Rob Roy said the company has made a decision to go ahead with its MI data center construction plans “100 percent”. The company says it will first install servers in the pyramid, then install long server housing structures on three said of it over the next decade. “We’ve got to put the ante in to be able to compete, so we put the ante in and now we’re ready to compete”. Without the tax incentives, “Switch couldn’t build in Michigan”, Roy said.

The House passed revised versions of bills that were approved earlier this month in the Senate. Most jobs pay between $60,000 and $200,000.

Birgit Klohs, head of west Michigan’s The Right Place development agency, testified in House and Senate hearings that the tax changes would open Michigan’s doors to a crucial new industry.

He also said he would welcome an “adult conversation” on the topic.

Switch said construction planning and work will begin soon.

Klohs said the tax breaks are designed for Switch’s customers, who are expected to co-locate their data storage equipment on the 142-acre site.