Microsoft planning $1B data center in Northwest Indiana

“Wow,” Dermody said of the plan. “Changing our future direction. This is amazing.”

Dermody’s remarks came Monday night after the LaPorte City Council unanimously approved a 40-year data center tax exemption to be applied strictly to the high tech equipment to be contained inside the facility.

In exchange, Microsoft will refund as much as $2.5 million, or about 30%, of its tax savings per year through the lifetime of the agreement. Those funds will be split between the city’s Redevelopment Commission and the LaPorte Community School Corp.

“It’s massive for the city of LaPorte. The jobs are all going to be quality, high paying jobs which is something we can’t have enough of,” said City Councilman Tim Franke.

Microsoft’s plan was announced publicly Tuesday morning by Gov. Eric Holcomb. A news release from the governor’s office said the data center would create up to 200 new jobs by the end of 2032, and “will accelerate cloud computing infrastructure to support growth in technology and artificial intelligence worldwide.”

Microsoft officials said the company will construct at least one 245,000-square-foot facility on Boyd Boulevard just east of U.S 35 on the far south side of LaPorte. The data center will be on nearly 500 acres of former farmland Microsoft purchased in two separate transactions, one in 2023 and one early this year, after the property was annexed into the city at the request of the former property owners, who had expressed a desire for the land to be redeveloped, said LaPorte Economic Advancement Partnership Executive Director Bert Cook.

The site is now known as the Radius Industrial Park.

Unlike tax abatements, which forgive a percentage of property taxes typically over a 10-year period, there will be no property taxes assessed on the data center equipment at any time during the exemption, Cook said.

The exemption was made possible under a law designed to attract data centers and other high-tech companies to the state. State Rep. Jim Pressel, R-Rolling Prairie, said he helped draft the tax exemption legislation signed by the governor about three years ago.

“Since we passed that, Indiana is becoming the data hub of the country. It’s working out very well,” Pressel said.

Cook said property taxes will be assessed in full, though, on the value of the building and land.

He said landing Microsoft furthers the progress into a more modern era the city has been aggressively striving for since Dermody became mayor in 2020.

Cook believes other companies and residents will be attracted to LaPorte just from having a world renowned company like Microsoft there.

“It really signals that LaPorte is a community that’s growing and it is a place where people want to be. For any of those other businesses or residents who are looking for a community to locate in, they should be looking in LaPorte and we’re excited about that,” Cook said.

The deal in LaPorte comes after Microsoft purchased over 900 acres of farmland in Granger on May 23 to position itself for possible construction of a data center in St. Joseph County. The land acquisition came after the St. Joseph County Council rezoned the property for industrial use.

Cook said the timing of construction in LaPorte will become clearer as the plans move closer to the end of the standard approval process.

“We’ll see construction in the very near term. It’s not something that’s 10 years out,” Cook said.

In addition to the incentive agreement with LaPorte, Microsoft will benefit from state subsidies agreed to by the Indiana Economic Development Corp. It has also entered an agreement with NIPSCO regarding its power needs.

The IEDC committed to a 35-year data center sales tax credit for a minimum $1 billion in eligible capital investment, the governor’s office said. For each $1 billion of eligible investment made at the site within the first 15 years, the company will be eligible for tax exemptions for an additional five-year to 10-year period, up to a total term of 45 years.

The state’s announcement of the Microsoft project noted it is the fourth major data center plan announced in Indiana in 2024, with the others in Fort Wayne, New Carlisle and Jeffersonville. Those projects are planned by Google, Amazon Web Services and Meta, respectively.

“Indiana is committed to being a central hub in the global economy of the future, and this latest announcement ensures Hoosier communities and talent will be key to widespread advancements in cloud and artificial intelligence technology,” Holcomb said in a prepared statement. “As a state, we’ve built a pro-growth business climate and implemented a future-focused framework to attract major investments in high-tech, high-growth sectors. We’re excited to welcome Microsoft’s new data center to Indiana and look forward to the incredible value add impact this will have on our statewide data driven ecosystem, new career opportunities, specifically the greater northwest Indiana community.”

Redmond, Washington-based Microsoft said it will employ critical environment engineers, IT technicians and managers, inventory and asset technicians and managers, security personnel and site managers at the data center.

“Microsoft is excited to expand our data center infrastructure into Indiana, with our first campus to be built in LaPorte,” said Bowen Wallace, Microsoft CVP Datacenters, Americas Region, in the state’s announcement. “We appreciate the collaboration with the state, city and the LaPorte Economic Advancement Partnership that has made this opportunity possible. We look forward to an enduring and beneficial relationship with Indiana and the city of LaPorte as we build and scale our data center infrastructure to support our customer and partners.”