LANSING, Mich. (WOOD) — Tax breaks that would secure a high-tech data storage company’s move to West Michigan have cleared their first legislative hurdle.
Wednesday, the House Tax Policy Committee OK’d the measure that would give tax exemptions to cloud storage company Switch. The measure now moves to the House floor.
Switch wants to put in a data storage facility, which would serve as its East Coast hub, at the site of the old Steelcase pyramid in Gaines Township, south of Grand Rapids. The $5 billion project would create 1,000 jobs, Switch says.
But there is much more work to be done and not much time to do it. Switch says that if the legislature doesn’t approve the tax exemption package before the end of the year, it will go somewhere else.
State Rep. Ken Yonker, the lawmaker who represents the area where the pyramid sits, is optimistic they can get it done before the New Year.
“I probably would think next week,” the Caledonia Republican said.
The bills still need to get the approval of a Senate committee. Sources tell 24 Hour News 8 that members of the Senate Committee on Competitiveness will vote the measures out of committee Thursday.
If and when the bills make it to the full floors of both chambers, debate is expected to go much like the discussions during the committee hearings.
State Sen. Rebekah Warren, D-Ann Arbor, asked Switch Executive Vice President Jason Mendenhall during Wednesday’s hearing why data centers deserve special tax treatment. He explained Switch’s role as part of the new economy — one that by design could stem Michigan’s brain drain by drawing other new economy companies to the state.
“And the other thing is the data doesn’t leave, and data equals applications which equals jobs,” Mendenhall said.
“It is a tough issue,” Switch spokesman Roger Martin said. “There’s no question about it. We’re talking about introducing an entirely new industry to Michigan, something that is the future of this country and of this world. It’s a good, vigorous debate.”
As the bills more foreword, expect more amendment — like the one added to the House bills allowing locals governments, cities, townships and school districts to determine how much local tax relief companies like Switch will receive.
“It ultimately is their money and they get the choice. That’s why I supported the amendment. I didn’t think it was an unfair ask,” Yonker said.