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A data center proposal in Mason could more than double the city’s tax revenue.
Mason City Manager Deborah Stuart said city officials first met with a data center developer in late April. The developer is promising a minimum investment of $1 billion, with a minimum taxable investment of $500 million.
“That is obviously significant for our community,” Stuart said. “They did note that that minimum is significantly less than where they think they will end, but that is the commitment they know they can make for this project.”
Stuart said the city currently captures $4.3 million annually from property taxes. The data center project alone would bring in $7.6 million, bringing the city’s total revenue to about $12 million.
Stuart said the tax revenue would be impactful for schools and would likely lower property taxes for the city’s residents.
“It’s anticipated to lower, I would think, almost all of the bonds that are out there that city residents pay,” Stuart said. “The way that bonding works is that you can’t collect more than you need for that payment. So, if you have a user come in that pays more, it reduces the cost for everyone.”
Some audience members at Monday night’s City Council meeting laughed when Stuart said the data center could lead to a reduction in the city’s millages as well, but Stuart stood behind the claim.
“I think the commitment from this entire council is to reduce the millage if there’s enough revenue to do that,” Stuart said. “With this kind of revenue, that is not a difficult decision.”
The city does not know who the end user of the data center would be and officials have not signed non-disclosure agreements, Stuart said. She said the city is not planning to provide any tax exemptions for the data center developer.
Many of the attendees at Monday’s meeting spoke in opposition to data centers. But Stuart said when done right, they can be an attractive proposal for cities that are struggling financially.
“When you have financial challenges and you need new revenue, to be honest, a data center has – and people are not going to believe this – more minimal impacts than manufacturing or a battery plant, and has more long-term value than a solar farm,” Stuart said. “Those are the things that are being invested in in Michigan right now.”
The city previously established new zoning requirements to regulate data centers in preparation for any proposals but repealed the ordinance after public outcry that the new zoning district regulating noise emissions, setbacks and other concerns would be too welcoming to data centers.
Stuart said some of those protections would be incorporated in a Public Act 425 agreement for a conditional land use transfer. The data center developer has agreed to follow the more stringent noise limits that have since been repealed.
The facility would use a closed loop cooling system that reduces its water use. It would be expected to use less than 40,000 gallons of water a day for its office facilities, which Stuart said the city can “easily” achieve within its existing system. She said the commodity charge on the facility’s water use would be $285,000 per year.
“I, for one, feel that we are moving in a direction where we’re going to be able to receive the benefits of a project, while mitigating the biggest concerns the community have,” Stuart said. “The concerns that were brought up, even tonight, have been addressed by these responses.”
City Council members rejected a stricter zoning proposal Monday that was written by some advocates who oppose data centers.
Mayor Russell Whipple said the proposal included structural and legal issues that would have made it unenforceable.
“Believe me, if there was some way that we could do something like this and have our legal counsel that has served us well for many, many years tell us that it could be defendable – because that’s the person who would have to defend it – I think the council would give it some consideration,” Whipple said.
Stuart said the city cannot prohibit data centers outright or pass overly restrictive requirements that would amount to exclusionary zoning.
Whipple and Councilmember Elaine Ferris are facing a recall effort from a group opposing data centers. The group has until July 31 to submit 1,000 signatures collected in a 60-day period. If enough signatures are collected, Whipple and Ferris would be on the November ballot. Their terms are scheduled to expire at the end of 2028.
But not all Mason residents are on board. Mason resident Kathleen Schmitz said social media campaigns “appear designed to disrupt meetings, discourage unity in the community and spread misinformation.”
“I am discouraged by this behavior because it keeps the officials that were elected by the residents of the city of Mason from doing the work they were elected to do, and it creates division in our city,” Schmitz said.
Whipple introduced each public commenter by identifying whether they were a resident of the city, with a majority of the speakers being nonresidents. The mayor has said much of the opposition comes from outside the city.
Schmitz echoed that sentiment, saying many of the people collecting signatures to recall Whipple and Ferris cannot sign the petitions themselves or vote in the city’s elections.
“I find it troubling that people outside the city are manipulating ordinance approvals and attempting to disrupt the City Council membership and change the city leadership by overturning who the Mason residents voted for,” Schmitz said.
