Council Members Brief Rotary Club on Proposed West-Side Data Center
FRANKFORT — Frankfort City Council member Steve Beardsley (District 4) spoke to the Frankfort Rotary Club on Thursday about the proposed “AI Factory” data center on the city’s west side. He said the city has examined the developer closely and has put protections into the agreement. He also said a few concerns remain.
Council members Eric Woods (at large) and Isac Chavez (District 5) also answered questions from Rotarians. Beardsley made clear that the whole council will make the final decision.
The Project and the Developer
Beardsley said the developer, DataOne, first contacted the City of Frankfort about a year and a half ago. About a year ago, a group of local officials and community members flew to visit the company. He said the group was “universally” impressed.
He described DataOne as a smaller company than Meta, which is building near Lebanon. DataOne builds data centers and then leases them to large technology companies. The Frankfort plan calls for one building on about 115 acres of industrial land next to Conagra.
Beardsley said the company’s founder is an entrepreneur who can “go a little too fast.” He noted complaints about how the company handled a project in Vineland, New Jersey. That site sits in a residential neighborhood, and it now faces a class-action lawsuit over noise. He said Frankfort has written specific limits into its agreement because of what happened there. He also brushed aside comments about the company being French. He pointed to Japanese-owned NHK as one of the community’s best corporate citizens.
“Ronald Reagan said trust but verify,” Beardsley said. “I think I trust them, but we’re putting things in contract that they can’t get around.”
If approved, he said the city will probably hire a third-party consultant to watch construction every day. He also said the city had the company do so many studies that the company once complained about delays. According to Beardsley, a state expert told him she had “never seen as many studies” on a data center project.
Water and Electricity
Beardsley said water use is the concern residents raise most often. He said the facility would use about 22,000 gallons a day through a closed-loop cooling system, with some water lost to evaporation and misting in hot weather. For comparison, he said another local industrial user uses about 1.5 million gallons a day. This Frankfort customer’s current usage is over 68 times the water usage of the proposed data center/AI Factory. He said the data center would not rank among the city’s 20 largest water users.
Electric rates are the second most common concern. Beardsley said DataOne has contracts with NextEra and the Indiana Municipal Power Agency, and it would build its own substation with separate metering. He said local customers would not pay for the facility’s power. Later, the company plans to use Bloom fuel cells, which Woods said run on natural gas without combustion and give off carbon dioxide and water. Natural gas fuel cells are much quieter than combustion generators used elsewhere.
During construction, the company would build a smaller substation and then give it to Frankfort’s utility department. Beardsley said this would save the city about $10 million, which is the cost of a substation the utility has wanted for years. He said the utility would also earn about $1.3 million a year for handling the billing.
Noise, Light and Traffic
Beardsley said the Frankfort site has very few homes nearby, unlike the Vineland, New Jersey site. DataOne plans earthen berms to reduce noise and is doing a noise study to show it meets city ordinances. It must also follow the county’s lighting ordinance, which controls brightness (lumens), light temperature (restrictions on hot/white or blue lighting), full cut-off (no light above the horizon) and no light spilling beyond the property (light trespass). Note: The Clinton County lighting ordinance makes some exceptions allowable during the temporary construction process.
Beardsley admitted that construction traffic will be a nuisance for a while.
Payments and Tax Abatements
Beardsley said the project comes as Senate Enrolled Act 1 has squeezed city budgets. Before this, officials had been looking at possible cuts to police, fire, street paving, parks and holiday lights.
If the project is approved, he said the city would receive these economic development payments, on top of property taxes, into its general fund:
– $1 million within about a month after permits are approved
– $1 million during the construction year
– $5 million in the opening year
– $4.5 million the next year
– $4.5 million a year after that, growing 3% each year
Woods estimated the total at about $332 million over 25 years if everything is paid, not adjusted to inflation. Property taxes from the site would go into a TIF district managed by the Redevelopment Commission. Beardsley said that money could help pay for streets and sewers for new housing. He also said officials have tentatively discussed sending 15% to local schools.
The company would get a 10-year, 50% abatement on real property taxes, worth a little under $2 million a year, according to Beardsley. He said state policy essentially requires cities to abate taxes on the computer equipment inside, so Indiana can compete with neighboring states like Ohio. He added that abatements do not raise individual residents’ taxes.
Woods called the money “more than we have ever seen” and also indicated the project would be “an absolute game changer.” Woods said the city will need new ways to manage it and must keep working to attract other development.
Jobs
The agreement guarantees 100 jobs, according to Beardsley. He said the company expects about 200. He added that on-call workers often need to live nearby, which could increase demand for local housing.
Remaining Concerns
When asked what still bothers him, Beardsley said his biggest worry is that the technology could become outdated. Future chips might make large data centers unnecessary within a few years. For that reason, he said, speaking only for himself, the city should spend the money on community improvements rather than long-term commitments that assume payments will last 20 years or more. According to engineers at the 51 West Information Open House, DataOne buildings will be constructed with thick concrete floors and tall ceilings near rail so usage such as warehousing would always be a secondary option.
Beardsley also admitted that the few residents living near the site will be affected more than anyone else. “I feel bad for those people,” he said.
Chavez said council members know some residents feel the process is rushed. He said the council is following a timeline and continuing to listen to residents. Beardsley said he has spent several hundred hours on the project in the last three months. He encouraged supporters to email the mayor and council, noting that officials have been receiving many messages from critics.
