Microsoft data center approved in Hoffman Estates, but power supply questions remain

  • A rendering of Microsoft's proposed two-building internet data center on Lakewood Boulevard in Hoffman Estates. The company is still negotiating with ComEd about how to supply the electricity needed to build and operate the second building.

    A rendering of Microsoft's proposed two-building internet data center on Lakewood Boulevard in Hoffman Estates. The company is still negotiating with ComEd about how to supply the electricity needed to build and operate the second building. Courtesy of Hoffman Estates

  • A close-up rendering of Microsoft's proposed two-building data center on Lakewood Boulevard in Hoffman Estates. Village officials on Monday approved plans for construction of the first building.

    A close-up rendering of Microsoft's proposed two-building data center on Lakewood Boulevard in Hoffman Estates. Village officials on Monday approved plans for construction of the first building. Courtesy of Hoffman Estates

 
 
Updated 5/18/2021 3:45 PM

Hoffman Estates village board members have unanimously approved the first of two 207,000-square-foot Microsoft data centers on Lakewood Avenue, north of Bell Works Chicagoland.

The 53-acre site initially was proposed as home to a "Hoffman Technology Park," but its developers instead sold the land last summer to Microsoft for an internet data center.

 

Microsoft is still in talks with ComEd on how to provide all the power the full build out will require.

Monday's approval is for the first of the two buildings, as well as work to prepare the site. The development is estimated to create 280 construction jobs over the course of the phased project, and 20 permanent jobs per building. The property's value is anticipated to be above $200 million when the data center is completed.

But addressing the full development's electricity requirements is a step beyond the land-use approval granted to Microsoft on Monday. The electricity currently available is enough for only 60% of the capacity of the first building.

To meet the demand, an on-site substation has been proposed. It would be fed by either overhead or underground lines from a power supply south of I-90 from.

Hoffman Estates Trustee Gary Pilafas on Monday asked whether the developers could commit to burying the lines, but they said they were not in a position to make such a promise at that time.

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Peter Gugliotta, the village's director of development services, explained to board members before the vote what their approval of the development that night would and wouldn't enable.

"The substation, the off-site power, those will come back to you through a separate site plan approval at a different time," he said. "This approval tonight would strictly be for all the stormwater utility stuff on the site and building the first building. They can't obviously proceed with their full build out until they solve the power solution and get the substation on-site. But they can at least get started, and there's a very long lead time for the building -- upwards of a year and a half -- which is part of why they're anxious to get this phase going while they're still working with ComEd to resolve the power lines."

When first proposed last fall, the data center was estimated to generate $2.9 million in municipal taxes and fees and $1.1 million in state taxes over 15 years. Construction costs are estimated at $450 million to $500 million.

The village ordinance approved Tuesday acknowledges that the project anticipates payment of $43,780 to the Hoffman Estates Road Improvement Impact Fee Program.

Village officials have recommended the project for a Cook County Class 6B tax incentive, but have not yet been notified of any approval by the county board. The incentive would cut property taxes in half for a decade before gradually returning them to normal during the 11th and 12th years.

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