Impacts are minimal in comparison to what might have occurred
Seldom if ever conceded by many critics of the planned $15 billion 672-acre data center under way in Port Washington is the fact that something was inevitably going to be built there and almost invariably would have resulted in what developers and planners sometimes call “more intensive uses.”
That is, far more water pulled out of Lake Michigan, far more traffic, potentially an enormous influx of expensive students in the local schools if the development had been residential or created tens of thousands of jobs.
What’s being built there is “clean, pretty buildings, doesn’t have the noise, smells, semi-trucks, not a ton, going in and out,” said Tricia Braun, executive director of the Wisconsin Data Center Coalition. Braun was careful not to disparage any sort of other manufacturing development in what is still a big manufacturing state but stressed that the data center will have “minimal impacts.”
Pro-growth advocates would likely have welcomed another project that was previously in the works for the same land — a semiconductor manufacturer. But it’s clear that even that sort of highly sought-after tech supplier would have resulted in a very different set of challenges.
That deal, which fell through in September 2024, would have brought as many as 20,000 new jobs, water needs dwarfing the Lighthouse project, a housing and school construction boom, additions to I-43, and other far-reaching public service needs, Jeff Hoffman, the man who brokered land purchases for both that deal and the Vanguard development that is now happening, told the Badger Institute.
“There would have been a larger, soul-searching event for Port Washington,” Hoffman, a principal with Cushman & Wakefield/Boerke in Milwaukee, said. “This would have meant changing the very character of the community.”
The land is north and west of 1-43 — a barrier that gave some in Port Washington, a lakefront city of roughly 13,000, the impression that the property might never be developed. Development was eventually inevitable.
“If you look north from Milwaukee on Google Maps you pretty quickly come to the Town of Port and say, ‘Look at all that open land,’” Mike Didier, town chairman and himself a real estate agent, told an Ozaukee Press reporter. “It’s flat and clear-cut from back in the day, and if you’re a manufacturer, it’s relatively close to your source of employees and things like an airport in Milwaukee.”
Besides having different impacts, some forms of development are more economically advantageous to the tax base.
Like several cities on Lake Michigan, more of Port Washington’s tax burden currently falls on residential property — 80 percent — than the state average of 73 percent because much of the city’s manufacturing is long gone.
Bolens Corp., maker of tractors and lawn equipment, left in 2001. Simplicity Manufacturing stopped making mowers and other equipment there when Briggs & Stratton bought the company in 2004. A couple of years later, Trak International, makers of heavy equipment for the military, shuttered its Port plant.
Taxes paid by manufacturers often ease burdens on homeowners.
In May 2024, the weekly Ozaukee Press got wind that Hoffman, who was born and raised in Port Washington, was making millionaires out of farmers and homeowners west of I-43 and east of the Ozaukee Interurban Trail, buying property at $40,000 an acre, as much as four times its value.
Before he was done, he’d secured contracts for roughly 2,000 acres of land.
Hoffman prefers to keep the name of the initial client confidential, but he said, if anything, speculators vastly underrated the potential impact on Port Washington. At minimum, the complex would have required 10,000 employees. The need for water would have been “exponentially” higher than the Lighthouse project, he said.
The semiconductor project did not come to fruition. But Hoffman’s assemblage of property got the attention of Cloverleaf Infrastructure Group, which, as the Badger Institute reported last January, signed a preliminary agreement with We Energies to provide the necessary power for a data center before any formal proposal was made public.
The Port Washington Common Council in August approved the framework of what was now being called the Lighthouse Data Center. In October Vantage announced a nearly doubling of the investment to $15 billion and that OpenAI and Oracle would operate data centers on campus.
When up and running, Lighthouse will employ 300 people, not 10,000 or even 20,000. Annual water use, contrary to misinformation circulated by opponents, is expected to equal that of about 65 homes, the Badger Institute has reported.
And as part of the agreement, Lighthouse will be billed for power in a category that will guarantee residential rates will not increase. Data centers are big energy users, but if this project goes forward as planned, it will not cause rates to go up for residents.
There are certainly commitments that alter how taxes are collected and when they can be used.
Like the Lighthouse deal put together by Vantage Data Centers for OpenAI and Oracle, the semiconductor project would not have gone forward without the funding to bring sewer and water to the west side of I-43, Kathleen Cady Schilling, executive director of Ozaukee Economic Development, told the Badger Institute.
That infrastructure funding was not going to be available without Port Washington creating a tax incremental financing district.
“No way was this going to be done without a TID,” Schilling told the Badger Institute. “Whenever there was talk of developing anything west of I-43, residential, commercial, the conversation always stopped with the cost of sewer and water. Putting that in under an interstate is very expensive.”
The deal includes a promise to reimburse Vantage $175 million for what it intended to spend on initial road, sewer, water and power infrastructure, $91 million for a substation, and $187 million in interest from tax revenue generated in the tax incremental district.
The city calculated that the TID would pay for itself in 18 years and Lighthouse would return to the general tax roll.
“This project will increase investment in Port Washington, significantly grow the city’s tax base, improve our infrastructure and bring in high-paying jobs on a scale that is easily manageable for a city our size — without many of the downsides that come with other major economic development projects,” the city says on its website.
Mike Nichols is the President of the Badger Institute; Mark Lisheron its Managing Editor.
Any use or reproduction of Badger Institute articles or photographs requires prior written permission. To request permission to post articles on a website or print copies for distribution, contact Badger Institute Marketing Director Matt Erdman at matt@badgerinstitute.org.
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