Data campus seen as 'catalyst' for future growth
A proposed $5 billion investment in western Michigan spurred a flurry of recent legislative activity related to data center tax exemptions.
That legislation passed both the state house and senate this week, clearing the way for data services provider Switch to begin construction at the former Steelcase pyramid building in Gaines Township.
"I believe that the ripple effect of this company coming here will be felt throughout the region," says Birgit Klohs, president and CEO of regional economic development agency The Right Place.
Klohs says the Nevada-based business was not initially interested in Michigan – particularly the state’s tax structure.
She says The Right Place has been one of multiple partners working with Switch behind the scenes on the projected 2 million square-foot data center, which will provide colocation services for the company's more than 1,000 clients.
News of the proposal broke earlier this winter, with state legislation providing various exemptions introduced shortly after. Two of the three introduced bills exempting data centers from sales and use tax now await Governor Rick Snyder's signature.
"We look at this both as an opportunity for retention in (high-tech) sector jobs, as well as attraction," Klohs says. "Because some of the jobs that they will be bringing – they will come from the outside, locate here, buy homes here."
"And then there are a number of employees of the companies that are leasing space in these buildings that will be coming in and out of Grand Rapids on a regular basis. Using our airports, our hotels, our taxi service (and other amenities)."
The building was reportedly purchased in May through Norman Properties, owned by Nevada developer Don, or D., Roger Norman. His company also owns the Tahoe-Reno Industrial Center, where Switch’s SuperNAP campus is located.
Prior to the sale, a group of investors had proposed building an educational campus on the site. A lawsuit regarding the sale was filed in Kent County Circuit Court in November.
In a statement this week, Switch says it intends to begin construction immediately
Klohs calls the move a catalyst for future economic growth.
"The folks that will be taking these jobs will obviously be living all over the region," she says. "They’ll be shopping, recreating, participating in the arts all over this region."
"But I also expect that there will be new commercial activity around where the pyramid now sits and where this will happen over the next few years. I think it’s a catalyst for the southeast corner of Kent County."