Land deal to pave way for largest data center in Elk Grove Village

Elk Grove Village has purchased the site of a concrete recycling business - the last major parcel needed for what will become the largest data center campus in town - as part of a complex property assemblage process led by the municipality.

The village's $16.5 million purchase of the nearly 5-acre Vulcan Construction Materials site at 1520 and 1700 Midway Court follows its previous acquisitions of offices, a retail building and hotel on the northwest corner of Higgins and Busse roads.

The village, in turn, is selling back the land to San Francisco-based Prime Data Centers Corp., which is planning to build a $1 billion, 150-megawatt data center campus across two dozen acres on the prominent entryway of town.

Village officials have been pursuing the Vulcan site for at least a year - even considering using their eminent domain powers to acquire it.

But the parties were able to reach a sale price in lieu of going through the expense and delay of legal proceedings, according to the 16-page sales agreement approved by the village board this week.

Village officials said acquiring the property would foster increased economic activity in the area and generate up to $4 million a year in property and utility taxes. It also would allow ComEd to add another substation next to the one it opened in late 2021 at 1500 Midway Court.

That substation is critical for the completion of the Prime Data Center development, Mayor Craig Johnson said.

Prime is planning to construct three 3-story buildings totaling more than 750,000 square feet that would house servers, wires and related equipment for it and third-party customers that lease space there.

It would be the 12th data center in Elk Grove and the largest - about double the size of what Microsoft is building down the street at the Elk Grove Technology Park, officials said.

The village also is in the process of creating a new tax-increment financing district in the Midway Court area aimed at helping pay for environmental remediation at the Vulcan site, which contains underground petroleum fuel storage tanks and a well.

A first-reading village board vote on ordinances establishing the TIF district was taken nearly a year ago. A final vote was delayed during negotiations for the Vulcan property. Under the special financing mechanism, property taxes paid to local governments like schools will be frozen at a set level, and taxes collected above that level will go into a village fund to pay for the environmental cleanup and other costs.

Johnson said the new TIF district would be short-lived.

Elk Grove first must annex the Vulcan property. A closing on the land is set for Sept. 1, and Vulcan must vacate by the end of the year.

A groundbreaking on the first phase of the data center project is scheduled for a year from now.

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