Firm to pay city’s data center review expenses

The Port Washington Common Council on Tuesday unanimously approved a predevelopment agreement with Red Granite DevCo, the real estate arm of Cloverleaf Infrastructure, following a closed session.

The agreement notes that Red Granite is seeking to acquire approximately 1,900 acres in the Town of Port for a data center and requires the firm to reimburse the city for its cost to study the proposal.

These expenses, including the cost of legal, financial, planning and engineering services, will be automatically reimbursed to a maximum $750,000, according to the agreement.

If the costs exceed that amount, the city can seek additional funding from Red Granite, the agreement states.

In return, the city agrees to coordinate with the company to design and locate public infrastructure for the project, such as road and sewer and water extensions, pursue legal avenues to annex the project site from the Town of Port and begin the process of creating a tax incremental financing district to pay for infrastructure work and cooperate with Red Granite in terms of zoning and permit processing.

But, the agreement states, “the city has made no assurances to Red Granite that the city’s obligations ... will be approved by the relevant authorities necessary to secure various approvals.”

The city’s special counsel for the project, attorney Christopher Smith of von Briesen and Roper said, “the idea is the city isn’t going to incur any costs as we explore (the data center concept).”

It was an agreement, he said, Cloverleaf approved before the closed session.

Mayor Ted Neitzke said, “We will not explore this at a cost to the taxpayers. This will not cost the City of Port Washington a dime.”

The closed session, which lasted about 1-1/2 hours, was held so aldermen could discuss negotiation strategies as the city works to annex land for a proposed data center and strategies regarding the predevelopment agreement.

Neitzke said Tuesday’s “work session” of the Common Council, which preceded the closed session, was the first time officials had a public discussion of the data center concept, adding there will be more to come.

“We’re at step one of maybe 1,000,” he said.

The concept, he said, is attractive for the city because it will help reduce the tax burden on homeowners, who currently shoulder  a disproportionate share of the tax burden.
  Residential properties make up about 70% of the city’s valuation, Neitzke said, while commercial properties constitute 18.25% of the valuation and manufacturing 2.3%.

“We have to be strategic in finding ways to spread that tax burden,” Neitzke said.

A data center campus, he said, not only fills a need for computing power, it is also relatively low impact.

“We don’t want invasive traffic. We don’t want to have to redo our interstates. We don’t want pollution. We don’t want smokestacks and semis running all of the time,” he said.

Cloverleaf  Chief  Development Officer Aaron Bilyeu presented rough plans for the data center complex, answering aldermen’s questions and common concerns.

The presentation was given before a standing-room-only crowd, with only two residents commenting on the plan.

Pat Morrissey, 120 Dodge St., told aldermen that while she appreciated the session, rumors that have been spreading for weeks about the proposed development have eroded public trust.

“The secrets up until tonight that you hold keep the public in the dark about the economic and environmental risks of these projects,” she said.

“How do you know if this is in our best interest? Why is the City of Port Washington so urgently pressing this matter?”

Neitzke said the city will take residents’ questions about the data center and post the answers on a website it is developing, along with Tuesday’s presentation. Questions can be posted at economicdev@portwashingtonwi.gov.