Mark Sanchez: Kind of a wild west somewhat because you're hearing this almost daily now, somebody talking about proposing, wanting to do, fill in the blank, a data center somewhere. And sometimes they're in cities, sometimes they're in rural townships. And here's one of the issues that each community faces when folks come forward proposing a data center. And we've seen some proposed here in the Grand Rapids area. You know, Crain’s Grand Rapids Business reported last year that Microsoft had bought some land down in Gaines Township and south of town. A couple of big parcels for possibly doing some data centers.
So, these things are coming. We're in the age of AI and we need vast data storage. And there are lot of concerns about these data centers. They use large amounts of electricity, large amounts of water for cooling. And there's an issue among townships, municipalities of what's the proper zoning? Well, they're not factories, so they don't fit into that category. They're not your typical commercial retail. They don't fit into that category. So, what we're beginning to see across the state is communities looking at their land use zoning and saying, what is the proper zoning to have in place to properly plan and manage these types of facilities?
And this is a story this week by my coworker here at Crain’s Grand Rapids Business, Kate Carlson, where she took a look at this issue. And I used an example of a data center developer posing one up in Sparta, the little village of Sparta here in Kent County on a 125-acre property. Sparta went through that process of making sure the zoning's up to speed to meet this new market demand. And that's what we're talking about.
There's a massive emerging market demand for these data centers. So, where do each of these communities have, what do they have in place to have proper zoning and properly uh make sure these things are done right, put in the proper place and have the proper infrastructure. This is a classic example of the regulations, and the zoning is now having to catch up with what's going on in the marketplace. And we've seen just any number of these data centers proposed across the state. So bottom line that we're seeing is coming underneath these proposals, communities working both urban and rural communities working to try to get their zoning regulations up to speed.
Patrick Center: Local government likes it because there's tax revenue involved. But on the flip side, there's infrastructure, there's power demands, there's environmental issues, and you're seeing these public meetings are reaching capacity. So, there's a lot of public interest in this.
Mark Sanchez: A lot of public interest and perhaps some public fear. Everybody else can define and decide whether that's well-founded or not well-founded. And we've seen some of those meetings here in the Grand Rapids area where they've had to halt the meetings and we need a bigger venue because so many people showed up. And there's a lot of speculation about why there's public pushback against these data centers. Could it be just simply pushing back against big tech, the environmental reasons, the issues of high electric use, high water use, and just all those potential effects on the community. All to be determined, all to be sorted out. We'll see where these projects go.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. We have a new startup addressing employer healthcare costs.
Mark Sanchez: Yeah, we wrote about these guys last year. It's called Manifest (Provider Collective), started by a couple of gentlemen, Aaron Friedkin and Rick Abbott. Aaron used to be with Blue Cross Blue Shield. Rick used to be with Priority Health.
And I always like to start these conversations with, okay, show of hands for everybody who loves the status quo of healthcare in America. And of course, not too many hands go up. So, Eric and Rick last year started Manifest. Basically, they're creating a network of care providers, doctors, hospitals, other centers, imaging centers, that they bundle together and then they want to sell access to this network directly to the employers who self-fund their employee health benefits. And here just recently, they came out and announced that they have now signed a number of contracts with some care providers. Among them, Pine Rest Christian Mental Health Services, Orthopedic Associates of Muskegon, Cancer and Hematology Centers, some of these direct primary care practices that use a membership and subscription model. And they've got some imaging centers in their network. And this is just the start for Manifest.
I didn't really talk about this, or do I talk about this to promote them, but to make the point that there's an undercurrent beginning to flow here in Grand Rapids and perhaps elsewhere across the state and elsewhere a bit of a pushback. One of the things that stood out when they made this announcement about all these care providers they've now signed for the network is they're all independent. They're all independent practices and independent organizations that are not part of large health system. So, you're seeing this somewhat of a groundswell movement toward something different. And we've all seen what healthcare costs have been doing for a number of years.
Employers are getting hammered by double-digit increases and the costs just keep going up. So what Manifest Health is doing is basically, can we put a model together that still uses the existing system, but bundle and put together this care network, sell it directly to employers and perhaps do it at a lower cost with better quality. So, this is something they're bringing a little different model to the marketplace, and you'll see how it works out in the years ahead. But right now, I kind of define it as part of a little broader movement occurring out there in the healthcare landscape.
Patrick Center: We have an announcement today from the New Community Transformation Fund. Would you consider this a spin-off?
Mark Sanchez: It's a follow-up fund. You know, a New Community Transformation Fund was formed a number of years back here in Grand Rapids to invest in underserved entrepreneurs, entrepreneurs of color. It's a demographic that really gets real appallingly low amount of venture capital invested each year. That's changing and the New Community Transformation fund is one of the groups trying to bring some change to that marketplace.
Last year, back in June, the Michigan Strategic Fund Board awarded the New Community Transformation Fund up to $9.8 million for Fund Two, a follow-up fund to the first one that was formed five, six years ago. It's a $20 million fund. They closed last week on the first $2.5 million in their fundraising. They've got $2.5 million in capital from investors. They can now start drawing down, drawing some of that state money from the MEDC. They'll bring them another $2.5 million. So now they've got this up and running. It's $5 million that they have on hand now. They're actively looking for companies to invest in. And they'll continue the capital fundraising through the year, hope to wrap it up by the fall, and eventually get to that $20 million figure for this Fund Two, for the New Community Transformation Fund.
Patrick Center: Crain's Grand Rapids Business staff writer, Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.