Last year, Las Vegas-based Hyperscale Data, Inc., announced plans to scale up a data center in Dowagiac, located in southwest Michigan, to eventually require some 340 megawatts of electricity, as much power as 200,000 to 300,000 homes.
It followed up the proclamation with a press release Monday announcing intentions to purchase more property to expand its Michigan footprint, without naming exactly where.
“Both announcements were vague, and you have neither applied for nor received any approvals necessary to facilitate your expansion plans. By doing this, you’ve bred uncertainty and eroded our confidence that you will do the right thing in our community,” wrote Dowagiac Mayor Patrick Bakeman in an open letter to Hyperscale Data CEO Will Horne, released Wednesday, April 1.
Bakeman, who owns and operates a barber shop in Dowagiac, is a first-term mayor elected last year, replacing an incumbent who served for nearly three decades. His city, about an hour from Kalamazoo and 20 miles from the Indiana state line, is home to about 5,700 residents.
While on vacation with his family in Missouri, Bakeman released a two-and-a-half-minute video of himself reading the letter to the tech CEO directly into camera.
“In Dowagiac, we pride ourselves on our ability to create an environment in which both businesses and neighbors can be successful,” he said.
“I can cite many examples throughout Dowagiac where this is occurring. Our expectation has always been that your business, like the many previous industrial uses of your property, can safely and peacefully coexist with the people living in the homes near your business.”
A Hyperscale Data subsidiary purchased the 617,000-square-foot industrial building, the Business Center of Southwestern Michigan, in 2021.
It has used a portion of the property for cryptocurrency mining and now intends to scale up data center operations to meet a growing need for processing power for AI and machine learning, according to its public announcements and regulatory filings.
But city officials have said they were caught off guard by Hyperscale Data’s expansion announcements, and received no formal development plans or permit requests from the company that they can use to answer residents’ questions.
Bakeman called on Hyperscale Data to immediately announce which additional property it claims to be purchasing.
“That will end the needless speculation that has run rampant in our community. While you are likely to have NDAs with the property owner, I trust that those agreements can readily be terminated by mutual consent,” he said.
The city has spent several months preparing for a plan submission from the company, with leaders spending time and money educating themselves on the issues surrounding data centers in collaboration with experts, he said.
Dowagiac has also implemented enforceable decibel levels in its noise ordinance, following complaints from residents living near the data center building.
“We are ready to review your plans to ensure that you’re on track to achieve full regulatory compliance. We expect that you will be able to submit plans within 45 days so that we can address the concerns that continue to be raised because of your multiple press releases,” Bakeman said.
Requests for comment to Hyperscale Data sent by email and left by phone with what appeared to be an AI chatbot were not immediately returned.
The letter represents the latest flashpoint in tensions between Michigan communities and data center developers, who have fully embraced Michigan as a potential landing spot for their warehouses full of computer servers over the last year.
At 340 megawatts, the Dowagiac data center expansion would be significantly smaller than the 1,400-megawatt project for ChatGPT creator OpenAI and cloud computing giant Oracle under construction in Saline Township, south of Ann Arbor, or the proposed data center for Google in Wayne County’s Van Buren Township, rated at 1,000 megawatts.
But it is still a significant power draw and could strain other public services.
Hyperscale Data has said it has an “agreement in principle” with an unnamed local utility to meet the electricity demand. Indiana Michigan Power serves the facility but said Wednesday it does not have any “agreements or commitments” in place to provide the company with the amount of power in question.
Data centers can also require significant amounts of water for cooling, depending on the systems employed, but it is unclear if that would be the case in Dowagiac.
“We stand ready to listen,” Bakeman said. “However, no proposal has been submitted and no decisions have been made. It is your responsibility to bring forward a clear and transparent plan.”
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