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12/20/2018 4:51:00 PM
Data center developers tried in Illinois for years before breaking ground in Hammond
Digital Crossroads data center developer Tom Dakich speaks during a Lakeshore Chamber of Commerce luncheon last week at the Hammond Sportsplex. Staff photo by John Luke
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Digital Crossroads data center developer Tom Dakich speaks during a Lakeshore Chamber of Commerce luncheon last week at the Hammond Sportsplex. Staff photo by John Luke

Joseph S. Pete, Times of Northwest Indiana

The developers behind the proposed Digital Crossroads of America Data Center on Hammond's lakeshore tried for years to build it in Illinois before opting for Indiana.

Indianapolis attorney Tom Dakich said he and New York City-based data center mogul Peter Feldman had a much smoother time getting the project done in Hammond.

"Years ago, we went to Chicago," Dakich told a business crowd at the Lakeshore Chamber of Commerce at the new Hammond SportsPlex last week. "Things didn't work out ... Now we have the approval of our development agreement, our ground lease, our tax-increment financing district. Everything it took us six years in godforsaken Illinois to not get, we got in less than a year in Indiana."

The developers plan initially to invest $40 million in a 105,000-square-foot data center at the site of the former State Line Generating Plant, intended to serve national companies like Amazon and Hulu. They may eventually invest up to $200 million into 400,000 square feet of data storage that would be cooled with lake water and lake breezes.

The project germinated for seven years before finally breaking ground earlier this year, at a ceremony attended by Indiana Gov. Eric Holcomb and other dignitaries.

"Pete and I started this in Illinois in roughly 2011," said Dakich, an Andrean High School graduate whose brother Dan Dakich played basketball for Indiana University and is a well-known TV and radio sports personality. "Basically we did everything right and Illinois did everything wrong. They repeatedly lied to us. They repeatedly told us things that weren't true. They repeatedly strung us along and we fell for it."

About a year and a half ago, Dakich was at an event at his alma mater, Wabash College, when someone suggested he should consider putting a data center in Northwest Indiana instead. He brought the idea to Feldman, and then they learned of the State Line Generating Plant site that Hammond pitched as a potential location for Amazon HQ2, which eventually went instead to New York City and Washington D.C.'s Northern Virginia suburbs.

"The Amazon HQ2 pitch looked a little crazy at the time," Dakich said. "But it turned out to be smart."

Dakich and Feldman sold their vision for the lakefront property to its owners, Alan and Simon Beemsterboer, the owners of Beemsterboer Slag Corp., who had been considering a marina and lakefront housing instead. The site was ideal because it is adjacent to nine major fiber "superhighway" lines under the nearby railroads, and included permits to draw lake water, which would save an estimated $12 million on a cooling tower and make the data center more competitive on price.

They then went to the Indiana Economic Development Corp. to pursue an industrial recovery tax credit to help finance the project. 

 

"If anyone has an old industrial plant that they want to convert into a new technology, and they want to do something great with it, and it's been around more than 25 years, you can get a lot of tax credits for it," Dakich said.

A meeting with Holcomb went well, Dakich said.

"Now we basically have the governor on board, who said he wanted something to happen in the Region. This governor ... I'm not saying other governors don't care about Northwest Indiana, but there are levels of caring. This governor genuinely cares," Dakich said, mentioning Holcomb's support for the South Shore Line's West Lake Corridor and double-tracking projects.

The developers got approval from the IEDC in March, hired Hasse Construction to build the building, and had an easy time dealing with the city of Hammond, Dakich said.

"By the time Peter and I got through the second meeting with Hammond, we were saying, this is how business should be done," he said. "This is exactly the way it should be done. It was government saying we want to be your partner. Government saying we're going to tell you when there's a problem. Government saying when there's a problem we're going to find a solution for you. Government saying if you guys want to come to our city we would love to have you."

"From the moment we started with the city," Dakich said, "it was a complete and unabashed partnership with them saying, 'Let's go. Do it. Do it. Do it.'" 

Related Stories:
• Developers line up full funding for lakefront data center in Hammond

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