T5-funded study says data center will bring in billions; opponents scoff at the numbers

A study commissioned by T5 lauds the economic benefits its Grayslake data center development will bring to Illinois, claiming it will generate nearly $10 billion in total economic output by 2031.

It’s another salvo in a fight for public support; the data center developer has undertaken to try and change an increasingly negative narrative both locally and across the country, with data centers becoming a bipartisan issue as residents raise concerns over power use, site contamination, noise, light and other potential negative effects on the communities in which these massive projects have begun to appear.

T5, as well as the village of Grayslake, have also faced accusations by opponents that the development moved forward in secrecy to avoid public input prior to approvals, accusations both have denied.

As preparations for the data center complex’s first buildings have gotten underway, residents in the area have been reporting about pamphlets being sent out arguing for the development’s economic benefits and saying it will bring no increased costs, water depletion, or excessive noise.

And Grayslake has created an updated FAQ page, promising the development has received no property tax incentives, and pushing back on common concerns raised over water and power.

Mayor Elizabeth Davies, meanwhile, has been a staunch defender of the project, which moved ahead at least partially before her tenure, arguing the region will reap major economic benefits with little negative impact.

But for opponents like those with the Lake County Data Center Opposition Coalition, which filed a lawsuit against the development, the “core concerns” remain unchanged. The project was approved “illegally” and needs to be stopped, the group says.

“The village and T5 are barreling ahead and making unsubstantiated claims about jobs and revenue while omitting the costs,” Bob Landolfi, a coalition member, said in a statement. “And at the end of the day, we can’t buy quiet or clean air and water.”

Greener Impacts

The study, which was provided to reporters prior to its public release, was conducted by Greener Impacts, an Illinois firm that conducts economic and environmental impact assessments. Its CEO is Sandy Dall’Erba, a professor of agricultural and consumer economics at the University of Illinois Urbana-Champaign. Representatives of T5 said the study was commissioned and funded by T5.

In a news release, Dall’Erba highlighted some of the numbers: nearly $1.5 billion in combined county, state, and federal revenue, thousands of jobs and nearly $4 billion in labor income across the state.

The “ripple effect is substantial” for the state, he said, adding that “every dollar of direct economic output” from the development will support “one additional dollar of economic activity … across Illinois through supply-chain purchases and household spending.”

Among various analyses on the development’s economic impact, it says that between 2024 and 2031, the project will generate nearly $10 billion in economic input across Illinois, including $7.27 billion in Lake County.

Across Illinois, it will bring $1.45 billion in tax revenue through 2031 and support 13,100 jobs a year on average during Phase 2 construction, the analysis said. Ongoing operations will support 940 “full-time-equivalent jobs” in Lake County on average per year beginning in 2027, it said.

T5 was not able to provide a yearly breakdown of the local jobs supported, and some critics have argued many of the jobs would be temporary construction work, which would end after the buildings go up.

Lake County will see $952 million in “combined fiscal revenues generated by T5 activity,” the analysis said. Phase 2 construction will make up 75% of the project’s total economic output in Lake County, it said, running from the second half of the 2026 fiscal year through 2028.

Grayslake property taxes

Davies said the village’s own survey of the development — which she repeatedly emphasized was based on various factors that could shift in the future — predicted a massive property tax windfall for the village and other taxing municipalities.

She said Grayslake is looking at potentially $5 million in property taxes a year when the development is fully built out, which she said would more than double the property taxes the village is currently taking in. Village documents from 2024 put total property tax revenue at about $4.5 million. All this without “putting anything forward,” she argued.

While the first buildings of the development are underway, the earliest property taxes likely will not arrive until 2028, Davies said. The development will be required to pay its property taxes, Davies said. However, when asked about other guarantees from T5, she said the “largest benefit we can have” is a “significant amount of property taxes.”

Landolfi questioned where Davies and T5’s numbers are coming from. What assumptions are these based on? What is considered “full build out?” He expressed distrust of any analysis coming from the village or T5, including the Greener Impacts study.

He criticized the release of the study to the news media prior to the public, arguing it is to avoid being “checked by the people it’s meant to persuade.” He called for a publication of the full study, including its methods, assumptions, and model inputs.

Davies said the development will follow state regulations regarding noise, noting several sound absorption technologies the development will be utilizing.

Regarding power, Davies said residents “will not see a rate increase in their electricity because this building is built in Grayslake,” adding a building in Pennsylvania or Indiana “would impact our rates the same way.” The power grid is a regional issue, she said, and she is “encouraged” to see work underway like the Illinois POWER Act.

Landolfi criticized her view. It is irresponsible for the well-being of citizens, he said.

“Claiming that ‘Oh, that’s not our concern.’ It should be,” he said.

If fully built out, the T5 data center will mean $100 million a year to local taxing bodies, Davies said, with $6 million going to Lake County, about $1.75 million to the Forest Preserves, $3 million going to the College of Lake County, and the remainder going to other various municipalities, including the school districts and township.

Davies said Grayslake is discussing ways to pass on some of the new funds to residents.

“We are considering direct payments to residents,” she said. “We’re considering reductions in costs and fees. We are considering many different ways.”

While “it all sounds good,” Landolfi said opponents of the project question how much is actually real, and what those estimates are based on. Much of the analysis being released comes with various qualifications, and warnings that they could change, he argued.

“The fundamental problem we have with all of this stuff (is that) we have no criteria to evaluate this stuff,” Landolfi said. “They’re asking us to take their word for it and trust them — and yet case after case, when you look at their statements, they’re not giving everything you ask for.”

The project lacks broad support, he said, proven by the “steady stream of dubious propaganda” from T5 and the village. They are answering questions that make them look good, he argued, while evading specifics.

And the coalition remains unconvinced by responses to concerns about noise, contamination, and other issues seen at smaller data center developments. He also criticized the village for “withholding technical documents” while citing the pending lawsuit.

“It’ll be the first of its kind, no environmental impact, and they won’t be running the backup generators,” Landolfi said sarcastically.

jstates@chicagotribune.com