A $7 billion data center project is getting closer to coming to fruition in Hammond, Mayor Thomas McDermott Jr. said.
A Chicago-based developer plans to invest $7 billion in an expansion of the Digital Crossroad data center at the former State Line Generating Plant on Lake Michigan in Hammond, right on the state line. Decennial Group filed plans with the Indiana Utility Regulatory Commission to invest $2 billion to build new buildings on the campus and another $5 billion in computer equipment that would support online activities, especially the rising use of artificial intelligence.
The project has been held up while NIPSCO sought state approval to create a subsidiary called GenCo to supply electricty to future data centers. During the time the GenCo case was pending before the Indiana Utility Regulatory Commission, more than $23 billion in data center investment was proposed in New Carlisle, just a few miles outside of NIPSCO's service territory.
NIPSCO last week received state approval to create GenCo, which would negotiate rates directly with data center developers to secure financing for any new electric generation that would be built.
NIPSCO has also been making progress in negotiations with Decennial Group, McDermott said.
"NIPSCO has been negotiating with my data center group and things have been moving in the right direction," he said. "GenCo will make it easier for NIPSCO to make deals."
Developed by Andrean graduate and Carmel attorney Tom Dakich and other partners, the Digital Crossroads data center first opened in Hammond in 2020, after the first in four phases of construction was completed. Connected directly to the massive ORD10 Data Center at 350 East Cermak in Chicago, Digital Crossroads was purchased by DX Hammond in 2021. The new owner has been plotting an expansion since 2022.
"The campus is going to be massive," McDermott said. "It's just massive. It's the biggest project in city history."
The proposed development would be one of the largest in state history, eclipsing the $4.2 billion that the BP Whiting Refinery invested in the multi-year modernization project, which allowed it to refine crude oil from the oil sands region of the Dakotas and Canada instead of Texas sweet crude.
The proposed $7 billion data center would be more than double the entire current assessed valuation of the city of Hammond, McDermott said.
"It's weird when you think about it. The city now has $3 billion in assessed valuation, and this is twice as much," he said. "And it's just computers. It's a crazy concept. It's going to be a massive power eater."
Data centers have proven to be controversial around Northwest Indiana. Residents have criticized the power use, water consumption, noise, light, effect on property values and unknown impact on public health. Projects have been detailed by vocal critics in Chesterton, Valparaiso, Burns Harbor and Union Township in Porter County after hundreds turned out to express their concerns about public meetings.
The Digital Crossroads data center is unlikely to run afoul of such controversy from neighbors, since the remote, isolated lakefront site is ringed off by railroads and power lines, McDermott said.
"For some reason, they're controversial with people who have a cell phone in their back pocket and a Ring camera at their home," McDermott said. "They support all this technology, like self-driving cars. You need computer storage capacity to do these things. If I were NIPSCO, I would try to get data centers in Hammond. It's not controversial. We want it. This used to be a power plant. It'll be a lot quieter. We want to prioritize projects like this. We don't have outrage or opponents. The only neighbors are power lines."
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