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Local Column

Borek: Attracting data centers – a coordinated effort

Paul Borek, executive director, DeKalb County Economic Development Corporation
Paul Borek, executive director, DeKalb County Economic Development Corporation

Construction officially begins on the Ventus Tech Services site south of Gurler Road in DeKalb. The $800 million, 900,000-square-foot cloud data center is the first phase of development that will bring jobs and opportunity to DeKalb County and the state of Illinois. It is noteworthy to highlight the initiatives and partners that contributed to this accomplishment.

One of the thought leaders and driving forces on this project was Krusinski Construction Co. CEO Jerry Krusinski. Krusinski began this journey 14 years ago. At that time, he had a vision for how this property could be used for technology purposes.

Partnering with the DeKalb County Economic Development Corp., the two organizations began working together prior to 2010. At that time, discussions with ComEd highlighted the intersection of high voltage electrical transmission lines on the ChicagoWest Business Center site making it distinctly capable of serving high power technology operations like data centers.

In addition, the abundant availability of high-quality water from the City of DeKalb, essential sanitary sewer capacity from the Kishwaukee Water Reclamation District and proximity to multiple broadband carriers within the I-88 right-of-way were also advantageous. Data centers use municipal water to augment cooling of scores of computer server racks and broadband fiber lines that are the lifeblood of the internet and cloud infrastructure.

Krusinski wasted no time in completing site due diligence targeting the mission critical data center industry. DCEDC assembled information on infrastructure with the help of ComEd, Nicor Gas, the DeKalb Water Division and the Kishwaukee Water Reclamation District, as well as data on technology labor, education and training opportunities with the assistance of Northern Illinois University and Kishwaukee College. Krusinski Construction Co. and DCEDC joined data center trade associations and promoted the site and DeKalb County at industry trade shows.

In 2013, DeKalb was selected as one of the last Illinois finalists in competition for a $350 million data center campus but was subsequently eliminated due to the absence of data center incentives limiting Illinois’ competitiveness for large scale operations. At DCEDC’s request, DeKalb County legislators proposed legislation to address the limitation, but a broad understanding and a base of support were not yet in place. That data center campus landed just west of DeKalb in Iowa, a state with data center incentives already on the books. Other data center campuses subsequently located in Iowa, as well.

Krusinski and DCEDC collaborated with ComEd and a core group of technology, development, and data center operating industries to establish the Illinois Data Center Coalition. The purpose was to inform legislators of the significant loss of investment, tax revenue and jobs due to large scale data centers locating just outside Illinois. The Illinois and Chicago chambers of commerce supported the effort and the coalition grew to include numerous industry participants and community leaders. In the meantime, DeKalb continued to generate interest from data center prospects.

In 2018, an analysis of the potential of a data center incentive in Illinois was prepared by Magnum Economics for the Illinois Chamber of Commerce Foundation. The study found that “tax incentives were an important factor in data center development and have been passed in 30 states, including neighboring states.”

According to the study, “from June 2017 to June 2018 Chicago’s data center market lagged behind other states and only grew 7%.” The Illinois Chamber press release further stated, “In contrast, states and cities with incentives experienced much higher growth rates, such as: the Phoenix market, which grew 26%; the Northern Virginia market, which grew 16%; and the Atlanta market, which grew 12%.”

Bolstered by compelling data in the Data Center Incentive Analysis, Gov. JB Pritzker and Illinois General Assembly leaders Michael Madigan, John Cullerton, Jim Durkin and William Brady embraced legislation backed by industry and labor. DCEDC communicated the importance of the data center industry to legislators and presented firsthand experience at a press conference in Springfield organized by the Illinois Chamber. DeKalb County Reps. Jeff Keicher and Tom Demmer worked to assemble a bi-partisan legislative coalition resulting in passage of data center legislation in May 2018 and signed into law by Gov. Pritzker.

With data center legislation in place, prospects renewed consideration of large-scale operations in Illinois. Krusinski assembled the 505-acre site required by this project and provided the design and coordination of off-site infrastructure, utilities and necessary roadway expansion. This work is underway by Krusinski Construction Co. to facilitate a 1,000-acre regional development. The City of DeKalb succeeded in attracting Ventus Tech Services to acquire 505 acres for development of a data center campus.

This success was made possible with the support the DeKalb County Enterprise Zone designating units of government to amend the boundaries and incentives of the zone. These were DeKalb County Government, City of DeKalb, City of Genoa, City of Sandwich, City of Sycamore, Town of Cortland and Village of Waterman. In addition, Illinois Department of Commerce & Economic Opportunity approved the amendments expeditiously in support of the aggressive project schedule.

Also, the taxing bodies serving the site approved incentive participation resolutions required to secure the project. These were DeKalb School District 428, DeKalb County Forest Preserve District, Afton Township, Afton Township Road & Bridge District, Afton-Pierce Multi Township District, Kishwaukee College, Kishwaukee Water Reclamation District, DeKalb Park District and DeKalb Public Library.

DeKalb City Manager Bill Nicklas and city staff coordinated the annexation, zoning and permitting of the large scale project, as well as the collaboration of the city, ComEd, Illinois Department of Transportation, Kishwaukee Water Reclamation District and Nicor Gas to provide for essential road, water, sewer and utility improvements.

DCEDC commends the many partners that have contributed to attracting the data center industry to DeKalb County. As a result of this collaboration, Curran Contracting has mobilized 37 pieces of earthmoving equipment to prepare the Ventus Tech Services site for development.

• Paul Borek is executive director of DeKalb County Economic Development Corp.

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