Data Centers
Friends and Constituents,
How are you all feeling? I’m feeling great after having just come back from the well-attended and energetic Safe Streets Protest this afternoon.
But like many of you, I am feeling anything but great about the proliferation of data center projects across our city. That’s the topic of this week’s newsletter. Watch the (slightly out-of-focus) video here.
IndyStar editor James Briggs, who once wrote an article claiming that I was expelled from the Democratic Caucus for being a bad coworker, sometimes gets it right. This is one of those times:
In September, the people of Franklin Township conducted an epic campaign to fight back against a proposed Google data center, earning praise from such national leaders as Bernie Sanders.
Then, residents of Martindale-Brightwood (with support from constituents of mine from nearby Hillside) began engaging with a proposed Metrobloks data center. Though the initial conversations were pleasant enough, they quickly devolved as Metrobloks reneged on an agreement to meet again with residents. In response, community leaders blocked the intersection at 25th and Sherman for a full hour to draw attention to their deepening opposition to the data center. Then, this week, the neighborhood association hosted a press conference explaining their opposition - highlighting the long neighborhood history of outside investment bringing health concerns and a deteriorated environment for residents.
Just this week, two more massive community events - this time in Pike and Decatur townships - showed that residents all across Marion County are extremely opposed to new data center developments there, as well.
It’s in that context that I have asked the legislative liaison staff people at the Council to help explore what local authority the City-County Council has to intervene against data centers.
Constituents from all walks of life, from all corners of the city, and from every political party have expressed intense opposition to proposed data centers. They have also expressed fear, uncertainty, and a lack of deep understanding about what data centers are, what they do, and how they are likely to impact our communities.
As the Secretary of the Board for the utility watchdog and consumer advocacy group, Citizens Action Coalition, I have had far more exposure to data centers than most people. Our organization put on an excellent webinar about AI data centers, why they were cropping up everywhere, and what impact they are having on regular people.
Not all data centers are created equal, of course: the proposed Metrobloks data center is only a tiny fraction of the size of the proposed data center in Decatur, and would use a smaller closed-loop system for water cooling. But a few factors hold true across all of the different proposals:
In Indiana, thanks to policies created by the Republican supermajority in the Indiana General Assembly and our Republican governors past and present, data centers receive immense incentives that seem wildly incommensurate to their benefit to local economies and neighborhoods.
IndyStar opinion columnist and Ball State economics professor Michael Hicks stated that based on his research of data centers in Texas, “there was no evidence that data centers led to more employment or incomes. There’s just no effect at all”. As a result, Hicks said that “statewide tax incentives for data centers are unjustifiable.”
Yet Citizens Action Coalition has highlighted the many statewide tax incentives that our legislators have created and boosted over the last several years, including House Enrolled Act 1405, passed in 2019. This legislation gave the corrupt Indiana Economic Development Corporation the ability to approve 50-year tax exemptions for sales and use taxes for data center equipment and electricity purchases.
Though IndyStar deputy opinion editor Jacob Stewart is correct when he states that Governor Braun should push the General Assembly to vastly increase the powers of the Indiana Utility Regulatory Commission and demand accountability from big utilities, he is too pessimistic about the powers of local government to stand up against data centers.
Localities across Indiana have started to push back against this Statehouse-led overreach. Three of our 92 counties in Indiana have instituted moratoriums on data centers, banning new developments until further research could take place. Indianapolis could use that sort of heavy-handed approach if need be, rather than give away the farm to out-of-state investors.
But if we wanted to, we could proceed with a more delicate touch.
I plan to bring a Special Resolution to the full council at our December 1st meeting, calling for developers to refrain from the usage of non-disclosure agreements, calling for the widespread usage of Community Benefits Agreements by which developers and neighborhoods can agree on practices and improvements to the neighborhoods, and calling for a moratorium on any local tax abatements that may supplement the existing state tax abatements on the books.
Special resolutions do not contain enforcement mechanisms, and as such, this will serve as a warning to developers and a statement of solidarity with our constituents. In the meantime, Council staff will help determine what actions we can take by law to further put boundaries around data center development. I would prefer a total moratorium on hyperscale and AI-focused data centers, but so far do not believe we would have the votes to pass such a resolution.
I know at least a few loyal readers have told me that they don’t oppose all of the data centers that I mention in this email. What do YOU think? What would a developer need to do for you to feel supportive of a data center in Marion County?
Have an excellent week and a happy Thanksgiving.
In love and solidarity,
Jesse