Data Center Deep Dive pt 1
Friends and Constituents,
Are you tired of hearing about data centers? Me, too - and yet that’s what we have to talk about all the same.
Today, I have ONE BIG ASK. Then there’s more stuff to do for those who have the time and energy below.
First ask: Contact Council President Maggie Lewis and ask her to call for a public hearing on the Metrobloks data center in Martindale-Brightwood. Call 317-327-4242 and let the staff know you’re calling to ask President Lewis for a public hearing.
As President of the Council, Maggie Lewis has been very fair and reasonable and I commend her for that. Data center developers and their allies have been pushing hard to insist that only the District Councilor (in this case, Ron Gibson) can call for a public hearing. But we believe that’s incorrect: as Council President, Maggie Lewis could call for a vote of the full Council and respect the majority opinion in terms of holding a public hearing. She’s hearing from the data center backers. It’s important that she hears from us, too.
If you’ve got more time and energy:
2. Come to the City-County Council meeting tomorrow night at 7:00 pm. Multiple data center related items will be on the agenda, as well as a youth curfew proposal and several other important pieces of public policy.
3. Contact your City-County Councilor to ask them to vote YES on Proposal 158. This resolution would establish a data center moratorium as official City-County Council policy until either one year from the date the resolution passes or until the new data center zoning restrictions pass.
Now that you’ve made those calls and cleared your calendar - you did do that, right? - I wanted to take some time to really dig into the complex processes that go into municipal planning for data centers. Over the next few weeks, I will take you on a data center deep dive. This week, we will focus on tax abatements and zoning. Don’t swoon - I know it’s pretty sexy stuff. But I’ll try to break it down and make it understandable. Watch this video first.
When developers start scoping out Indianapolis as a place to build a new development, a number of different organizations get involved.
For basically all new developments of this size, economic incentive conversations get started early.
The IEDI, or “Indianapolis Economic Development, Inc.” is a “public-private partnership” that functions as Mayor Joe Hogsett’s group that offers developers tax breaks and other incentives. The IEDI essentially works like a local version of the infamously corrupt IEDC. This unelected and unaccountable organization apparently offers these incentives even to organizations that don’t ask for them. Constituents have expressed deep frustration that additional local tax breaks are being offered, on top of the massive sales tax exemption on equipment and energy. Yet the IEDI seems intent on offering property tax exemptions as well, for both the land and the “personal property” - otherwise known as computer equipment - that these developers need.
Any tax breaks proposed by the IEDI come before the Indianapolis City-County Council for final approval.
The main regulations that would prevent a data center developer from simply purchasing land and starting construction are known as zoning regulations. Zoning is the concept of requiring community buy-in and following a city plan to put appropriate developments in appropriate parts of the city. For example, some areas of the city are zoned residential, showing that the City expects and desires developers to propose only residential developments. (This is an oversimplification - in reality there are complex zoning standards that get into the nitty-gritty of what size and scale of development is appropriate for a given area).
Developers work alongside the public servants who work for the City in the Department of Metropolitan Development (DMD) when it comes time to actually start planning out how to build the new project. The developers send design plans and specifications to the DMD staff for review. DMD staff will give some guidance about whether these plans look like they would fit the City comprehensive plan and design standards.
If a developer wants to build something that is roughly in the right size, shape, and type of development the plan calls for, but might not meet every single standard the City has, they can ask to go before the appointed Board of Zoning Appeals (BZA) to ask for permission to build it anyway. The Board of Zoning Appeals tends to handle requests for things like allowing buildings to sit closer to the road than the city normally allows (or as planners and developers would say, “setback variances”), fewer parking spots than the City normally allows (“parking variances”), and so on. Developers typically hire attorneys and architects to make the case to the Board of Zoning Appeals that their project still fits within the spirit of the City’s plans, and that anything about the project that doesn’t fit cleanly within the normal City standards is not going to pose a significant problem to any neighboring property owners or to the City itself.
But what if a developer wants to build something that is way different from what the city’s comprehensive plan calls for? That requires more than a variance - it might need a full-on “rezone”, meaning that the City’s plan is updated to note that a much different land use is allowed on a site. Rather than go before the appointed BZA for these larger deviations, developers must make their case before a professional Hearing Examiner who essentially holds court, hearing from all sides of the issue, before issuing a recommendation.
Both in front of the BZA and in front of a Hearing Examiner, it is possible for neighborhood groups or other parties opposing the relaxation or changing of the City’s standards to “remonstrate”, meaning “show up to oppose the project in its current format”. The developer is formally known as the “petitioner” in these cases and hearings. Whichever side does not get their way may appeal the decision to a nine-member board of appointees known as the Metropolitan Development Commission (MDC).
The MDC hears a longer and more drawn-out set of arguments from the petitioner (remember, that’s the developer) and the remonstrators (remember, that’s everybody who doesn’t want the project to be approved). Finally they vote to determine whether plans are approved or rejected by the full board.
Finally, all the cases heard by the MDC go to the City-County Council for final approval of the MDC’s recommendations. Typically these cases are all heard in bulk at the Council, like this:
The President of the Council announces “unless a Councilor wishes to call down any of these proposals for a public hearing, these recommendations will pass into law”, and without a vote the MDC recommendations are finalized.
But Councilors can take one additional step by calling for a public hearing on any of these matters. It’s been the recent practice of the Council to defer to the Councilor representing the district where the development is being proposed. But the law says the District Councilor “may” take this step - it does not say that the Council President cannot call for a vote for a public hearing, nor that other Councilors cannot call for a public hearing.
Which brings us back to the question at hand tomorrow evening: who can call for a public hearing to stop the Metrobloks data center from moving forward unopposed?
I believe that any Councilor can make this call - but think more importantly, the President can choose to put a vote for a public hearing on the agenda.
At the end of the day, this is not a legal question - it is a political one.
In situations like this where the law is ambiguous, elected officials are faced with a choice. No matter how they choose to proceed, this could end up in a lawsuit. Metrobloks may attempt to sue if a Councilor other than Ron Gibson initiates the vote for a public hearing. But if we don’t, Martindale-Brightwood residents might sue (just like Decatur Township residents are).
So the question becomes: do you upset the out-of-state developer pushing to install 36 massive diesel generators in a historically wronged community?Or do you upset that community itself?
Which side are you on?
I know which side I am on. I hope to see you all tomorrow at the meeting. Now go make those calls!
In love and solidarity,
Jesse