Economic Development, Government, and Technology

Politician opposes incentives for data center campus

November 25, 2015
| By Pat Evans |
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Switch Steelcase Pyramid data center campus rendering
A partial rendering of the $5 billion, 2-million-square-foot data center campus planned by Switch for the former Steelcase Pyramid property. Courtesy Switch

Opposition against the planned Switch SuperNAP data center campus at the Steelcase pyramid has surfaced.

Justin Amash, R-Mich., a West Michigan representative in the U.S. House of Representatives, took to social media to urge state legislators to vote no on three tax-exemption bills in front of the Michigan House and Senate.

The bills have been deemed necessary for Switch to locate a data center campus in Caledonia, as supporters have said they level the playing field with 18 states offering the exemptions.

Amash does not have a vote on the bills.

"Corporate welfare"

A recent wave of related posts on Twitter by Amash began with a tweet with a link to a “Key Vote Alert” post on the Americans for Prosperity website, urging constituents to tell state legislators to “vote NO on cronyism and corporate welfare.”

“In conclusion, I urge you to oppose these bills and instead choose to embrace free-market principles as the best mechanism for growing our economy stronger,” says Pete Lund, Michigan director, Americans for Prosperity, in the post.

Amash followed with a three-part tweet.

“Corporate welfare — whether special tax breaks or subsidies — inherently harms the economy & destroys jobs in MI,” Amash says.

“Corporate welfare simply shifts resources from more efficient uses to less efficient uses. And, in any case, it’s immoral.

“The ribbon cutting grabs headlines for those promoting a government-favored project, while economic losses & job losses are dispersed.”

He also fielded a question on Twitter on how the using the Steelcase pyramid for a data center campus would create losses.

“The question is not whether a building should be full or empty,” Amash says. “That’s looking at only half the equation.

“The question is about the best uses of scarce economic resources.”

"Countless new possibilities"

If the bills pass, Switch indicated it will start as soon as possible, but the location is not guaranteed if the bills don't become law.

Switch estimates it would invest more than $5 billion into the SuperNAP data center campus during a 10-year period.

The company’s one-thousand-plus clients, from Sony to Google and Amazon, would host servers at the campus.

“It’s almost an industrial park for the new economy,” Jim VanderMey, chief innovation officer, Open Systems Technologies, told the Business Journal this week.

Sources told the Business Journal this week the campus’ economic benefits for the state would range from attracting a number of the businesses working with Switch and the attraction and retention of high-tech talent.

“I cannot overstate the impact Switch will have on both the greater Grand Rapids area, as well as the entire state of Michigan,” said Birgit Klohs, CEO, The Right Place, a regional economic development nonprofit in Grand Rapids, earlier this month.

“The unparalleled technology and data infrastructure investments planned by Switch will unleash countless new possibilities for growth in our state. The future of business will be driven by data, and Michigan will be well positioned as a hub of data innovation.” 

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