As demand for artificial intelligence and cloud computing surges, developers and users are increasingly looking for fertile ground for data center development.
While Wisconsin has made notable strides, stakeholders say, catching the attention of multiple large-scale data center users and developers, including
two Microsoft data centers in Mount Pleasant and Kenosha and a nearly 2,000-acre proposed data center in Port Washington.
The
Commercial Association of Realtors Wisconsin (CARW) held a panel discussion recently where stakeholders discussed the state's current strengths and necessary improvements to continue to attract large-scale data center development.
Why Wisconsin?
For Adria Troyer, head of strategy, innovation and operations at Google, the case for data centers — and their urgency — is self-evident.
“I'm sure most of us picked up our phones today and started scrolling through our emails or used Google Maps to get here,” Troyer said. “That data has to live somewhere, and that's within servers and data centers. It's just the engine for the modern economy.”
Troyer emphasized the importance of Wisconsin’s sales and use tax exemption, which provides a significant financial incentive for large-scale tech investments, as a primary reason the state has gotten the attention of data center developers and users. She also said the state’s approach to collaboration has been beneficial.
Among the top factors she cited for site selection were energy availability, stable political climate and community alignment.
“We want to make sure that we're going into communities where we align from a state and local perspective, we're able to partner and help them achieve their economic development goals as well," Troyer said.
Zoning, red tape and misconceptions
Still, panelists said regulatory hurdles and community pushback can still derail projects.
Rod Carter, a real estate and telecom attorney at
Husch Blackwell, said Wisconsin is
ready for data center development's power, water, workforce and climate needs, but has work to do on its incentives and marketing.
“The most common problem is communities aren’t prepared from a land use perspective,” Carter said. “They don’t have data centers anywhere in their zoning code, their building codes aren’t equipped for it.”
He added that environmental permitting at the state level is a “nightmare,” and that the incentives the state does have need clarification and streamlining to maximize effectiveness.
Further, Carter and Troyer said communities that are ready to educate their residents on what impacts a data center are more attractive to developers.
“(Some residents think) development is bad, and you're taking away raw land, and you're going to put something there that I don't like, and it's going to bring change and it's going to emit something that's going to be bad for the health or environment, or I'm going to feel it when I'm in my bed, or it's going to interfere with my pacemaker or what have you," Carter said. "That brings us to the education component of this.”
Lessons from Port Washington
In Port Washington, Texas-based
Cloverleaf Infrastructure is planning to build a 1,900-acre data center for an unnamed user. So far, the city has annexed about one-third of that land, zoned it as a "Technology Campus District" and amended the city’s 2035 comprehensive plan to classify all 1,900 acres as “business park and industrial,” setting it up for future annexation and re-zoning.
Up until recently, however, the city was not prepared for such a development, according to Mayor
Ted Neitzke. The data center proposal came after the city lost out on a chip manufacturing plant to a city that had more entitlements in place.
“Where we lack locally, statewide, is a lack of strategic thinking and strategic design at the local government level, and then there's a disconnect between what's possible and then what we're capable of,” said Neitzke.
Neitzke emphasized the value of education and transparency with residents. Unlike many municipalities, Port Washington declined to sign non-disclosure agreements (NDAs) during the early phases of the project and has worked to minimize resistance by educating residents about the "realities of data center development."
“The controversy is a moving target. One day for us it's birds, next day, it's sound, next day, it's the forestry,” Neitzke said, adding that opposition has been "minimal," despite concerns that data centers often generate intense local resistance.
Neitzke urged greater alignment between local and state governments, along with more strategic thinking from elected officials.
“Pay closer attention to your local elections, where they pay too much attention to social issues instead of strategic issues," Neitzke told the audience.
Push for further public policy
Coleman Peiffer, senior manager of data center services for
Alliant Energy, echoed the need for forward thinking and further public policy to support data center development. He said that when Wisconsin has, it's done it well.
He cited a
tax policy in Wisconsin that exempts data center equipment, software and other costs from state sales and use taxes.
“Not only did we do it, we did it much better than everywhere else,” he said of the sales and use tax exemption. “Our sales and use tax exemption does not have a sunset clause, which separates us from our peers.”
Wade Goodsell, chief operating officer of
Wisconsin Manufacturers & Commerce, emphasized the need for the private sector to lead the charge on further public policy change.
“If the business community doesn't lead, who will?” he said.
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