Michigan City approves tax abatements for Phoenix Investors data center amid sustained public opposition

Michigan City Common Council members voted this week to approve several tax-abatement measures tied to Project Maze, a proposed data center at 402 Royal Road, where Phoenix Investors plans to renovate the former Federal-Mogul plant into a multistage data facility. The council approved a real-property abatement, an economic-revitalization-area confirmation and a tax-abatement agreement; one initial effort to table consideration failed.

The project team and utility partners told the council the site is suited to a data center because it is adjacent to existing utility infrastructure and an existing substation. John Perret of Phoenix Investors told the council, “I know there's a lot of misinformation out there about this project and a lot of skepticism about who the end user is. What I can state at this moment about the end user is it's not Elon Musk.” Rick Kalinski, director of economic development and public affairs for NIPSCO, told the council the utility will use a model that keeps the cost of generation and transmission for this large customer separate from NIPSCO’s rate base: “We will not compromise our reliability or affordability,” he said.

Why it matters: the city will receive upfront and recurring cash payments tied to the developer's agreement and the assessed value of the redeveloped property, while neighbors and community groups pressed council members on noise, generator testing, water use and local hiring. Council supporters cited new tax revenue, construction jobs and long-term local economic development; opponents cited potential noise and health effects, generator testing and the scale of state and federal incentives.

Project details and mitigation plans: Phoenix Investors proposes to adaptively reuse the existing 400,000-square-foot structure on the former Federal-Mogul site. The developer said the site will use two new NIPSCO feeds…