Correction: An earlier version of this story contained a spelling error. The Tribune regrets the error.
SOUTH BEND — St. Joseph County officials said the Microsoft data center project in Granger will not seek any abatements or exemptions, resolving questions about whether the project would receive a tax break.
But whether it will be placed in a Tax Increment Financing (TIF) district remains to be seen.
The data center will sit on over 900 acres of farmland at St. Joe Farm, located at the northwest corner of Bittersweet and Cleveland roads. In May 2024, according to previous Tribune reporting, the county council approved a petition to rezone the farmland, and in June 2024, Microsoft purchased the site for a new data center. The county council voted to rezone an additional 40 acres along Cleveland Road in May 2025 to add to the existing 929-acre site.
Bill Schalliol, the executive director of economic development for St. Joseph County, gave an update about the project during a presentation at the Feb. 17 St. Joseph County Board of Commissioners meeting.
Per company policy, he said, Microsoft won’t ask for any tax abatements or exemptions for the project.
“The real property, personal property and enterprise technology will be paid in full for the project moving forward, as well as paying for utilities,” Schalliol said.
Because of that, he said, he believes the county should “capture that revenue” by establishing a TIF district “so that money can be applied for water, sewer, roadway improvements.”
But TIF districts have been a source of concern for some community members.
Granger resident Emily Trausch, who is an admin for the “Neighbors of Granger, IN” Facebook group, previously told The Tribune that any tax revenue collected from a data center in a TIF stays only within a consolidated area instead of supporting the county at large. Funding from a data center in a TIF district usually goes toward developing other industrial businesses, she added, rather than paying for things such as schools, libraries, police or fire departments that benefit the community as a whole.
Other development updates
Schalliol said the majority of the development is currently planned to sit north of Cleveland Road, which will include the main campus building and the power plant; that portion will consist of five or six buildings, Schalliol said.
Around 250 to 300 acres will be set aside for a conservation easement or a green zone within the property, he said.
As of right now, Schalliol said, a general contractor hasn’t been selected, although he anticipates there will likely be “strong union representation in the workforce on the site.”
The site will be served by American Electric Power, not Northern Indiana Public Service Company (NIPSCO), Schalliol said, and the City of Mishawaka will provide water and sewer services, per an agreement with the county. NIPSCO will be the site’s natural gas provider, he said.
Schalliol said Microsoft will pay for all of the extensions, upgrades and new utility constructions, adding that there could be up to $60 million in needed utility improvements, such as for roads, water and sewer. He said the data center will also use a closed-loop cooling system, which is considered more efficient than open-loop systems.
Schalliol also outlined several responsibilities for the county, including creating and implementing an effective traffic management plan before moving forward. He said information about the plan will be made public in the coming weeks.
Another task, Schalliol said, will be improving the sewer and water utilities to the site, as well as repairing and widening the roads afterward.
And finally, he said, the plan is to invest the revenue generated in the data center area in improving the utilities and other aspects over the next few years — thus, Schalliol said, a TIF district is needed.
“The way revenue comes in in non-TIF areas wouldn’t be substantial,” he said, “wouldn’t really move the needle as far as creating revenue in the general fund to do any of these improvement projects.”
Next steps
Schalliol said the next step in the process is “getting the economic development there in place.”
So far, he said, it’s gone through the redevelopment commission, the planning commissions and the board of commissioners, but it still needs to go through the common council and back to redevelopment for a confirming resolution.
Taking care of that will allow the county to sell a bond, Schalliol said, which will provide working capital to work on projects before construction on the data center begins.
He said a long-term goal for the project is to extend municipal utilities to more residents currently using a septic system. The revenue from the data center would help the county provide water, sewer or both to as many people as possible, Schalliol said.
“But for a project like Microsoft, we’ve never had the revenue to be able to manage a project like this, to get utilities up into the Granger area,” he said. “The total package of work is well over $100 million, so we’ve got lots of work ahead of this.”
Email South Bend Tribune staff reporter Rayleigh Deaton at rdeaton@usatodayco.com.
This article originally appeared on South Bend Tribune: Will Microsoft receive tax breaks for St. Joseph County data center?
Reporting by Rayleigh Deaton, South Bend Tribune / South Bend Tribune
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