As data centers eye metro-east, officials juggle jobs, taxes and utility fears
Federal, state and local elected officials gathered in Madison County this month to discuss the possibility of data centers coming to the metro-east.
U.S. Sen. Tammy Duckworth, D-Illinois, organized the Feb. 6 meeting with mayors and state legislators to learn more about emerging issues in Madison County. Their hourlong conversation largely focused on data centers because of a developer’s recent interest in Granite City and Troy.
The Houston-based development company Cloverleaf Infrastructure has been exploring potential locations for data centers in the cities and assessing public opinion at community meetings. Cloverleaf prepares sites for tech companies to build data centers by handling land, electricity and local zoning agreements ahead of time.
The company has not submitted any formal proposals to Granite City or Troy to consider.
Data center construction has become a booming industry as demand surges for the infrastructure to power artificial intelligence.
Local opponents have raised concerns about possible utility bill hikes from a data center’s substantial water and electricity usage, as well as fears about noise and air pollution. Proponents argue a data center will bring property tax relief and jobs.
“I would love to have one down here for the jobs that are created, but we just need to make sure that what they’re consuming isn’t going to hurt the local population,” Duckworth told Granite City Mayor Mike Parkinson. Representatives from Troy were not present at the meeting.
Parkinson referred to data centers as “the future industry” with potential property tax revenue that could “change the fate of Granite City.”
“It’s very intoxicating,” Parkinson said, “but there’s a lot of these issues that come with it.” He specifically noted the need to prevent utility rates from going “sky-high.”
“It’s not something I’m pushing and pushing and pushing. If it works out, it works out,” he added of the possible development.
“But I have to really learn a lot and figure all this stuff out in a relatively quick period of time and make sure that I put these bumpers in that protects my community, at the same time convincing everybody that government is going to do the right thing here to lower your taxes for this deal, and people just don’t believe it. ... We’ve got to do more to convince people that this is the future industry.”
Parkinson was among a group of St. Louis-area public officials who traveled to Nebraska in December to tour a Google data center.
Greater St. Louis Inc., a nonprofit economic development group, organized the trip and paid for hotel rooms and ground transportation but not flights, St. Louis Public Radio reported.
Parkinson dismissed concerns about noise and air pollution based on what he saw.
“I don’t see pollution coming out of them. You can eat off the sidewalk,” Parkinson said. “The bus that I was on was the loudest thing in that data center.”
Duckworth shared what she has been discussing with data center developers that she suggested local officials also bring up in their negotiations, including:
- Setting the expectation that a data center’s electricity usage cannot raise consumer power bills
- Asking if a data center could use wastewater instead of potable drinking water and build its own power generators
Data centers use water to keep their servers and other hardware from overheating. But Jenna Shelton, director of the Illinois State Water Survey, said during the meeting that most of a data center’s water usage — about 71% — actually comes from its energy consumption.
“You need fresh water in order to generate that liquid natural gas, to generate the coal to fire the power plant, all of that,” Shelton said. “Even if they’re coming in and saying, ‘We’re going to generate our own power,’ where is that water going to come from in order to provide that source of energy?”
State Rep. Katie Stuart, D-Edwardsville, suggested Illinois even the playing field for communities by creating statewide regulations for data centers.
“If we leave it to each of the individual municipalities to have to protect for these things, some municipalities might be more vulnerable than others, might be more desperate for these resources of property taxes or something,” Stuart said. “I think it needs to be a statewide thing.
“We shouldn’t leave you hanging on your own, because we know what happens is they’re going to try to come in and negotiate away these regulations or restrictions that you want to put on and go, ‘Well, your neighbors over here said they wouldn’t do that to us,’ and we don’t want to pit village against village and town against town.”
Other state lawmakers have also expressed interest in regulating data centers. Two northern Illinois legislators introduced a bill on Feb. 6 that would prohibit data centers from shifting energy costs to residents.
Parkinson agreed that creating regulations “as soon as possible” would help communities like his.
Opportunities for public input
Granite City is planning a community discussion on data centers with the mayor at 6 p.m. Tuesday, March 10 at The Mill Event Center, 1311 20th St. The city said the event will also be livestreamed on the Granite City YouTube channel, youtube.com/@cityofgranitecity6049.
The focus of the discussion will be utilities, jobs and taxes, according to the city.
State Sen. Erica Harriss, R-Glen Carbon, is also gauging public opinion on data centers with a survey on her website, senatorericaharriss.com/datacentersurvey. It asks residents if they support or oppose data center development and to explain why.
