Data centers are not just becoming a hot button topic among Michigan communities, but also a campaign issue in a major election year.
Bridge Michigan environment reporter Kelly House recently dove into how data centers are entering politicians’ platforms as more Michiganders learn more about these projects.
"The state has crafted policies really welcoming this industry to Michigan, and because of that, we've seen data center proposals crop up in more than a dozen communities across the state, and that has been met with almost an equal backlash," she said.
In her reporting, House found nearly 20 communities in Michigan that have put moratoriums in place on data center development. Those pauses range anywhere from several months to a year.
Communities can't generally ban outright a type of land use with a demonstrated need, but House says the question remains if it can be proved there's a need for data centers in any one community.
"It's not like a grocery store or even some of the things that communities tend to find controversial, a strip club, a marijuana dispensary," she said. "Because if there's no grocery store or strip club in your town, you have to go elsewhere, whereas, if there's no data center in your town, you can still access the products that data centers deliver, the data from a center that is not in your community."
At the state level, some lawmakers want to repeal those tax breaks, put environmental regulations in place or institute a statewide moratorium on development.
But state leaders like Governor Gretchen Whitmer and Republican House Speaker Matt Hall seem unlikely to pick up those proposals.
When it comes to those running for the state's highest office, their stance on data centers also varied. House and her colleague talked to ten gubernatorial candidates.
"I would say the overarching theme was some were walking on eggshells, some were forcefully rejecting the notion of data centers," she said. "You didn't hear anyone being a resounding yes, we should, you know, roll out the red carpet for this industry with no checks and balances."
House says as it get closer to Election Day, she'll be watching for specific proposals from candidates.
But she says as data center developers race to build capacity, communities, or the state at large, waiting to approve construction could lead to those companies pulling out entirely.
Interview Highlights
On how state lawmakers are talking about data centers
When these tax breaks were passed, there was some controversy around it. But I would say the average Michigander may not have taken note. That has obviously changed since the industry has started to physically show up. So, we are seeing legislators, including some who voted for these tax breaks, express concern about the industry in Michigan. We're seeing attempts to roll back the tax breaks, a call for a statewide moratorium, proposals to rein in their water and energy use, and then we're also seeing it show up for candidates who are running for public office in our state.
On what gubernatorial candidates are saying about data centers
I would say the overarching theme was some were walking on eggshells, some were forcefully rejecting the notion of data centers. You didn't hear anyone being a resounding yes, we should, you know, roll out the red carpet for this industry with no checks and balances. So, you know, I heard everything from people saying, "Hey, we need this industry, but we need statewide standards to make sure that, you know, communities don't have this patchwork of regulations" to you know, a couple of candidates who are literally going around the state, Tom Leonard and Anthony Hudson, and going to local public meetings and submitting public comment and really coming out and saying, "We don't want data centers in Michigan."
On how data center companies are reacting to this uncertainty
Moratoriums are not bans, but data center companies specifically are in like this global arms race to try to build as many of these things as fast as they can, to be the ones who corner this market. And so if you have a community say, "We'll get back to you next year," what we are seeing is that some developers will say, "Okay, we'll just go somewhere where the answer is a resounding yes, so that we can start constructing these things faster." So, there have been a couple instances in Michigan already where developers have has pulled back their proposals amid this public resistance.
Interview Transcript
Sophia Saliby: Data centers are not just becoming a hot button topic among Michigan communities, but also a campaign issue in a major election year.
Bridge Michigan environment reporter Kelly House recently dove into how data centers are coming into politicians’ platforms, and she joins us now. Thank you for being here.
Kelly House: Thanks for having me.
Saliby: It seems like the state wants jobs, investments, these developments and is making it more attractive for data center companies to come in, but local communities are more skeptical. So, can you break down this disconnect of where we are right now?
House: As you noted, the state has crafted policies really welcoming this industry to Michigan, and because of that, we've seen data center proposals crop up in more than a dozen communities across the state, and that has been met with almost an equal backlash.
And one of the ways it's taken shape is communities crafting moratoriums to essentially say, hey, we're not approving any data center developments until we figure out what we're dealing with. So, a story I wrote this week identified at least 19 communities in the state that have pressed pause for anywhere from three months to a year.
Saliby: You make it clear that a town, a city, a county can't just say no data centers ever, right?
House: That is the assumption, but it's actually not clear yet. So, what is not allowed in Michigan is banning a use, a land use that has a demonstrated need. So yes, by and large, communities can't just ban whole categories of land use, but I did talk to one land use attorney who argued we don't know if there's a demonstrated need for data centers specifically.
Because it's not like a grocery store or even some of the things that communities tend to find controversial, a strip club, a marijuana dispensary. Because if there's no grocery store or strip club in your town, you have to go elsewhere, whereas, if there's no data center in your town, you can still access the products that data centers deliver, the data from a center that is not in your community.
Saliby: So, a lot of questions still. Are data centers figuring into politics at the state legislature level?
House: Hugely. So you know, when these tax breaks were passed, there was some controversy around it. But I would say the average Michigander may not have taken note. That has obviously changed since the industry has started to physically show up.
So, we are seeing legislators, including some who voted for these tax breaks, express concern about the industry in Michigan. We're seeing attempts to roll back the tax breaks, a call for a statewide moratorium, proposals to rein in their water and energy use, and then we're also seeing it show up for candidates who are running for public office in our state.
Saliby: Does it seem like the leaders of the two main parties who are running the Senate, running the House, do they have the political will to follow through on what some of the legislators within their parties want?
House: I would say unlikely for some of the main proposals that have been floated. The idea of repealing the tax breaks, our governor has already said it's a nonstarter, and she will veto any bill that reaches her desk.
The Speaker of the House Matt Hall has said that he does not support a data center moratorium. Tax breaks, he's been a little more open to, so we'll see what all shakes out. But I think these proposals right now seem to be a long shot.
Saliby: And then when it comes to politicians running for statewide offices like governor, what do they say about data centers at this point in February, ahead of November?
House: Yeah, so my colleague Eli Newman and I polled 10 candidates in the gubernatorial race, and I would say the overarching theme was some were walking on eggshells, some were forcefully rejecting the notion of data centers. You didn't hear anyone being a resounding yes, we should, you know, roll out the red carpet for this industry with no checks and balances.
So, you know, I heard everything from people saying, "Hey, we need this industry, but we need statewide standards to make sure that, you know, communities don't have this patchwork of regulations" to you know, a couple of candidates who are literally going around the state, Tom Leonard and Anthony Hudson, and going to local public meetings and submitting public comment and really coming out and saying, "We don't want data centers in Michigan."
Saliby: How do you think this issue then will play into campaigns as we get into debates and closer to Election Day?
House: Well, one thing I'll note is that Jocelyn Benson, who appears to be an early frontrunner for the Democratic side, she has some personal and professional ties to Related Digital, which is the company behind Michigan's first approved hyperscale data center. It has already received some scrutiny, I would not be surprised if that becomes an issue in the primary.
And then, you know, what I'm looking for more broadly is a lot of candidates in their responses to me talked about broad notions of, you know, we need checks and balances. We need to make sure they don't overuse water. I didn't really hear specific policy proposals about how they would achieve that, so I'll be looking for that.
Saliby: And is any of this uncertainty impacting the companies that want to come here?
House: It is. You know, moratoriums are not bans, but data center companies specifically are in like this global arms race to try to build as many of these things as fast as they can, to be the ones who corner this market.
And so if you have a community say, "We'll get back to you next year," what we are seeing is that some developers will say, "Okay, we'll just go somewhere where the answer is a resounding yes, so that we can start constructing these things faster." So, there have been a couple instances in Michigan already where developers have has pulled back their proposals amid this public resistance.
Saliby: Kelly House reports on the environment for Bridge Michigan. Thank you for joining us.
House: Thanks, Sophia.
This conversation has been edited for clarity and conciseness.
