GAINES TOWNSHIP, Mich. (WOOD) — Activity is expected to increase around the former Steelcase pyramid south of Grand Rapids after state legislators passed tax breaks requested by a cloud data storage company.
“Next steps? Select a contractors to lead all of this. Start a hiring process. Finalize a site plan and move a project team to Michigan,” Switch spokesman Roger Martin said of the process that should begin next month.
Martin says Nevada-based Switch hopes to be up and running in the Gaines Township pyramid by late 2016.
Switch expects to invest $5 billion in the facility, which will provide cloud storage to Switch customers through their SUPERNAP Data Center.
Switch says the pyramid will create as many as 1,000 new jobs over the next decade. Some of those jobs will be with SUPERNAP, while others for their cloud storage clients.
“It could be Amazon, it could be eBay, it could be General Motors, it could be Meijer,” Martin explained.
Those jobs will be filled by an online process and there will be positions that don’t require computer or other high tech skills. For example, think of all the wiring the data center will require.
“Data center ecosystem jobs tend to pay between $60,000 and $200,000 per year. The lowest wage job at Switch is $15 an hour plus benefits, and that’s for largely unskilled positions,” Martin said.
Hundreds of workers will be needed for initial and ongoing construction at the Pyramid.
“This is a $400 million construction project to start with,” Martin said. “Could get to $2 billion over a decade. This is a lot of construction jobs in perpetuity.”
It will take a lot of electricity to power all the servers and coolers needed to run a data storage center. Martin says Switch has been working with Consumers Energy and is confident all the lights will turn on when they start moving in at the end of 2016.
SNYDER: IS IT GOOD TAX POLICY?
State legislators passed two bills late Tuesday night that provide tax breaks for Switch and other data storage companies. The legislation includes requirements Switch meets employment benchmarks and protect schools from losing tax revenue.
The legislation now needs the Gov. Rick Snyder’s signature. He said he will analyze the bills with particular emphasis on a couple of areas to see if the legislation is good tax policy for the broader technology industry or just a quick fix to lure in one company.
“Good policy is you don’t want to do one thing particularly for an out-of-state company versus saying if we’re going to do something, it should be appropriately done for an industry. So that was one of the questions, and I think clearly it’s moved in the industry direction,” he said.
Putting the question of personal property taxes in the hands of local government seems to make the bills more palatable for the governor, but those aren’t the only questions he has.
“Now the question is, is it fair to everything else and what are the revenue implications? It’s important we balance our budget in my view and I want to be fiscally responsible. So the fiscally responsible part, I’m doing separate analysis on,” Snyder told 24 Hour News 8. “On the tax policy piece of this … there is a great policy question: Is this somewhat akin to industrial processing? Because this is not a tax credit. This is a exemption for a category of tax, sales and use tax.”
As the CEO of The Right Place, Inc. — West Michigan’s economic development agency — Birgit Klohs lobbied hard for the data center. She said the legislature did the right thing.
“I think the important thing is that we showed that we can do tax policy that makes it possible for a whole new industry to come and locate here. So while we’re getting Switch, which we’re excited about, I’m as excited about the fact that we will see more of these kind of industries and businesses come to Michigan. And we said to the world and our competitors we can play,” Klohs said.
Snyder did not give a timeline for approving or disapproving the bills, but the working assumption has been that decision has to be made before the end of the year.
–24 Hour News 8’s Brian Sterling contributed to this report.