City paves way for data center, Vantage buys land

The Port Washington Common Council met for more than 90 minutes in closed session Tuesday to discuss strategies that will guide the development of a data center complex on the city’s north side while the company it is dealing with is quickly buying hundreds of acres of land for what could be the largest campus of its kind in the country.

It’s been less than a month since Vantage Data Centers was identified as the company that plans to develop the campus on as many as 1,900 acres, and work is proceeding quickly.

Also on Tuesday, aldermen agreed to start the process of discontinuing almost a mile of Highland Drive, an action needed so Vantage can consolidate the individual parcels it is buying for the campus into a single site — a process that will take at least 40 days.

Meanwhile, Vantage is acquiring the land it needs for the first phase of the data center complex.

According to Wisconsin Department of Revenue records, transactions involving 19 parcels of land — a total of 539.5 acres — within the data center complex boundaries totaling $17.8 million were recorded in the last 10 days.

The purchaser is identified as VDC Wisco Realty Investments 1 LLC, which shares an address with Vantage’s Denver corporate headquarters.

State records also show that two other limited liability corporations were registered with the state in May —  VDC Wisco Realty Investments 2 LLC and VDC Wisco Realty Investments 3 LLC, presumably to act as real estate agents for the second and third phases of the data center campus.

Vantage Data Centers, a rapidly growing global developer of hyperscale data center campuses, was identified in June as the end user that plans to develop the Port data center complex, which could be one of the largest in the world.

Vantage has 35 data center campuses, either in operation or under development, in 14 countries on five continents, and has been focused on expanding throughout the world to capitalize on the increasing demand for cloud computing and artificial intelligence capacity.

The company is currently constructing its first data center campus in the Midwest in New Albany, Ohio. That campus, reported to cost $2.25 billion, will consist of three, two-story buildings on 70 acres and use 192 megawatts of electricity. The first of the campus’ data centers is expected to be online by December.

Vantage has not submitted plans for its Port data center to the city, Bob Harris, the city’s director of planning and development, said Tuesday.

Port officials have been negotiating a developer’s agreement with Vantage for about the last month, the city’s attorney, Christopher Smith of von Briesen and Roper, who wrote the developer’s agreement for the Microsoft data center in Mount Pleasant, said Tuesday.

The agreement could cover a plethora of details, Mayor Ted Neitzke said, from timelines for construction to infrastructure improvements needed for the campus and potential tax incremental financing to extend services such as utilities to the site, which only recently was annexed to the City of Port.

Smith said it’s likely that a TIF district will be needed for the project.

“I don’t see a way you can do a deal of this magnitude without one,” he said, noting a TIF district segregates the obligations to ensure the developer pays them, not the public.

Neitzke said the city is looking at various ways to structure a TIF district. If the city were to place the entire campus into a TIF district, the payback for any debt incurred by the district is minimized. If a portion of the land is placed in a district, it would extend the payback and the time the city and school district would have to realize the increase in valuation. If the city were to place half the land in the TIF district, he said, it would almost guarantee the longest payback.

Neitzke said the developer’s agreement could also outline who is responsible for such things as repairing any roads damaged during the campus’ construction.

One thing the agreement probably won’t cover are any contributions from Vantage to projects planned by the city or school district, Neitzke and Smith said.

Smith said companies like Vantage contribute to such projects to generate goodwill, not to meet contractual obligations.

Depending on progress in the negotiations, Neitzke said the Common Council may hold a second meeting in July to discuss the agreement.

If an agreement is approved, Vantage could begin preliminary sitework in August, even before the Plan Commission reviews plans for the campus, Neitzke added.

Also Tuesday, the Common Council agreed to start the process of discontinuing roughly four-fifths of a mile of Highland Drive, which currently bisects the proposed data center campus.

Rick Fellenz, 4237 Highland Dr., asked aldermen if access would be guaranteed for people living along the road and farmers using nearby fields until the crops are harvested.

“No one’s losing access to their property,” Sam Schultz, a land use and development advisor with von Breisen and Roper, said. “Anyone who needs access after the discontinuance ... would have easements for that access for the time being.”

Schultz said the process of discontinuing a portion of the road is a lengthy one, noting the earliest the council could consider a resolution to discontinue the road is in 40 days.

In addition to the council action, he said, the Plan Commission must also consider the measure and a public hearing needs to be held.

Neitzke said he anticipates the Plan Commission will consider the measure in August.

Meanwhile, Vantage continues buying land for the data center.

State records show that VDC Wisco Realty Investments 1 LLC has purchased 19 properties, with the highest amount paid, $3,555,720 for 82.3 acres, to Weiss LLC of Lake Church Road in Belgium.

Loren Foote of Castle Rock, Colo., was paid $2,037,128 for 47.5 acres, according to the state, while James Michel  of Country Club Beach Road in Port was paid $1.5 million for 6.4 acres and Curran White of Highland Dr. was paid $1.3 million for 1.7 acres.

David Kleckner of North Lakeview Avenue in Port was paid $1,289,484 for 30 acres, and Bethel Flynn of Slinger was paid $1 million for one acre, according to the state.

The smallest amounts recorded were $217,200 each to the Janice Becker Survivors Trust of Campbellsport, the Norbert and Nancy Ansay Family Trust of Belgium, Roxane Wolske of Texas and John Ansay of Campbellsport, who each sold 20 acres, according to the state.

In addition, the Becker Trust, Wolske and John Ansay were each paid $856,000 for an additional 78.7 acres.

All the transactions were recorded with the state on June 24 through June 30.