Ozaukeepress.com – Campus would cost billions, use more than a gigawatt of power, cover as many as 2,000 acres of town land annexed into city
By KRISTYN HALBIG ZIEHM
This story, first published on Jan. 7, was updated on Jan. 8
Plans for a sprawling data center complex that would cost billions of dollars to develop, requires a gigawatt or more of power to run and is proposed to be built on roughly 2,000 acres in the Town of Port Washington — land that would be annexed to the City of Port — were presented to the Common Council Tuesday night.
The complex, which would double the city’s valuation, will likely consist of multiple large buildings of one to three stories, the number of which would be determined by the amount of power available, and will be phased in over the next five to eight years, Aaron Bilyeu, chief development officer for Cloverleaf Infrastructure, told Ozaukee Press in an interview Monday. Each building would require an investment of about a billion dollars, he said.
The amount of energy needed would be so large that We Energies will build substations on the site, Bilyeu said.
A gigawatt is enough energy to power about 750,000 houses.
The complex would create a large number of jobs during construction, Bilyeu said, and between 50 and 100 permanent jobs per building. These jobs, he said, would be filled by skilled workers who are not required to have a college degree.
Cloverleaf has an aggressive timeline for the complex. Within the next 30 to 60 days, plans for the complex will be submitted to the city, Bilyeu said, and construction could begin this fall, with completion of the first phase in the next three years.
The city could begin the process of annexing the land in the next 1-1/2 to two months, Port Mayor Ted Neitzke said.
Neitzke said at Tuesday’s Council meeting that at this early stage the proposal looks promising for the city’s future.
“I believe the pros far outweigh the cons for the City of Port Washington,” he said.
He added that he shares concerns expressed by some residents, but that the proposal merits further consideration.
“There are debates to be had and discussion to be reviewed,” he said.
In a press release, Ald. Dan Benning, the council president, said, “Every conversation we have had in the early stages of this process has made us confident that a data center, built responsibly with accountability and transparency as our top priorities, can provide long-term benefits for our city’s economy without significantly changing our daily life here in Port Washington.”
Cloverleaf Infrastructure, which is based in Houston, develops plans and secures permits for data center projects, then sells the project to a technology company to build and operate. Bilyeu, who previously worked for Meta and Microsoft, said Cloverleaf is “fully prepared” to buy the necessary land and has created a real estate entity, Red Granite DevCo, to do so.
Ultimately, he said, the complex could be owned and operated by one of the major players in computing, such as Meta or Microsoft, adding Cloverleaf hopes to have this company in place early in the process so it could buy the land.
“That buyer is not in place yet,” he said. “The buyer will likely be a very large data center company.”
He noted that Cloverleaf is only talking to firms from the United States.
“We won’t bring anybody here from China,” Bilyeu said.
That company would likely use the data center for its own purposes but could also lease parts to other tech companies, Bilyeu said.
The complex will not be used for cryptocurrency, Bilyeu said. Instead, it will likely be used for some cloud storage and primarily for artificial intelligence processing.
The land the complex would be situated on stretches from the City of Port’s north border north to Dixie Road and is west of I-43 and east of the Ozaukee Interurban Trail. The intent is to annex the land to the city, Bilyeu said. However, Town Chairman Mike Didier said Monday that much of the property is in a no-annexation zone created when the town and city reached a border agreement in 2004.
That agreement ends on Dec. 31, and Didier said the city approached town officials to see if they are willing to end the agreement early and allow the land to be annexed before the end of the year and what concessions might be required to make this happen.
But, Didier said, the town was told that this isn’t a prerequisite and Cloverleaf is willing to wait until the end of the year if necessary.
The Town Board met in closed session Monday for about an hour but took no action on the matter.
The extension of utilities such as water and sewer services would likely require the city to create a tax incremental financing district for the project, Neitzke said.
“The city can’t afford to bond for this or run the infrastructure out there otherwise,” he said, adding it will likely be a pay-as-you-go TIF district where the risk is placed on the developer, not the community.
However, a TIF district will also mean virtually all the property taxes from the development will go to pay for the infrastructure for decades instead of being available for the city to use elsewhere.
But, Bilyeu told the Common Council, tax payments could be negotiated through a developer’s agreement.
The data processing proposal has been widely rumored for some time, but the property involved has been in the public eye since last year, when Jeff Hoffman, a principal with the Milwaukee commercial real estate company Cushman & Wakefield/Boerke, purchased options to buy what’s been described as 1,800 to 2,000 acres for a microchip manufacturing facility.
That deal, brokered with help from the Wisconsin Economic Development Corp., fell through, but officials said they planned to market the land for other purposes.
Neitzke said that he approached WEDC and the Milwaukee 7 Partnership to try and find a company that would meet the city’s development goals.
“That (the microchip factory) was somebody else’s dream,” he said. “We asked them (WEDC and M7), ‘What can you imagine with us?’”
M7, working with We Energies, brought Cloverleaf in to talk to the city, Neitzke said, noting the state has been looking seriously at the potential for data storage.
A data center, Neitzke said, brings with it the potential for extending the city’s border — and utilities — to areas where it’s desired by developers. There have been numerous residential developments considered along Highway LL but the cost of extending sewer and water has been prohibitive, Neitzke noted.
“This meets a need,” he said. “It’s not pollution. There are no smokestacks. There aren’t 18-wheelers 24 hours a day. Our stock of housing isn’t going to be inflated.”
It diversifies the city tax base and could attract other companies that work with the data computing industry, Neitzke said, and create partnerships with schools and other entities that will benefit the community as a whole.
For Cloverleaf, the fact that land and power is available was the draw, Bilyeu said.
“It was a very attractive property from the beginning,” he said, particularly because there is power available to run the servers.
The data center industry is rapidly evolving, Bilyeu said, with AI changing the profile of these centers, increasing the power requirements and scale of the facilities.
Bilyeu said that much of the power needed to run a data center is needed for the computing. Cloverleaf has reached an agreement with We Energies to bring additional “energy assets” to the area, agreeing to pay for this power generation so other ratepayers won’t have to.
Water, once a requirement of these large computing centers, is no longer a factor, Bilyeu said, because the way these facilities are cooled has changed.
“With the evolution of designs, there’s little to no water consumption,” he said. “That simply doesn’t happen anymore. They use cooling systems that are reliant on electricity.”
Noise is a frequent concern with data centers, Bilyeu acknowledged, but he said that facilities today are “very quiet” and this site has few residential neighbors. To mitigate noise, he said, the company uses mechanical screening, siting and other design features to minimize noise.
Fans, which were traditionally used to cool data centers, have been replaced with other cooling systems that aren’t as loud, he added.
“The interstate generates more noise (than the center),” he said, adding the noise generated by the data center will be masked by the sound of freeway traffic.
The data center, which is two to three miles from the interstate, won’t require any freeway access beyond what is currently available, he said, nor an expansion of existing roads.
“It’s not a ton of truck traffic,” he said.
Bilyeu doesn’t know how many buildings will be constructed on the site but said they will look like warehouses, will be set back from the road and be shielded from view with berms and landscaping.
That’s important, Neitzke said, adding, “I don’t envision this being chain link fences and bright lights. I see trees … a forest.”
There will be an office component to each building, Bilyeu said, where employees will do their work separate from the actual data center.
“The data centers are dark and the servers go blinky blinky all day long,” he said.
Bilyeu said that it’s unlikely the data center will expand beyond the original site in the future, in part because of barriers such as I-43.
Neitzke said Tuesday that the process of dealing with the proposal has only started, saying, “This is going to be on our agendas for the foreseeable future.”
Aldermen on Tuesday began to frame their negotiating strategies, and it will need to amend its zoning code, which currently doesn’t address uses such as data centers, he said.
“We can write the rules and expectations,” he said.
“There’s nothing that’s been negotiated or promised. We’re not going to dance to the developer’s needs. They will have to meet our needs.”
Original article on Ozaukeepress.com