Chilly Chicagoland is Hot for Data Centers

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Poet Carl Sandburg called Chicago “the City of Big Shoulders, Tool Maker, Stacker of Wheat.” Regional real estate analysts hope it will take its place as “Home for Data Centers.” According to the Chicago Sun-Times, a new report from real-estate firm Cushman & Wakefield ranked the region as the second-best data center market globally, behind only Northern Virginia, with 52 data centers currently up and running.

The report based its standard on low land costs, reliable utilities, tax incentives, and development in the pipeline. According to Todd Bateman, managing principal of Intelligence & Strategic Advisors, the presence of some [data centers] will draw others. He noted that if infrastructure exists to keep computer equipment “cool, dry, and powered,” it will attract other companies to the same area.  

Bateman added that Illinois’ tax incentives, enacted in 2019 by Gov. J.B. Pritzker, are also a draw and “absolutely critical” to the growth. The state program affords exemptions from certain sales and income taxes and applies to projects with a minimum $250 million investment. It also requires a commitment to hiring at least 20 full-time workers in operations and maintenance, reported the Sun-Times. 

The most popular areas for data centers in Chicagoland are Elk Grove Village, near O’Hare Airport, with nine data centers and four more coming in 2021, and nearby towns such as Franklin Park and Itasca. Although some “knock” data centers since they don’t supply many jobs (typically 25 to 100 per center), according to the Sun-Times, they do tend to pay well and are a pathway to career growth. In Illinois, data center jobs must pay at least 120 percent of the applicable county’s median wage.

According to Lauren Huffman, spokeswoman for the Illinois Department of Commerce and Economic Opportunity, the state incentives have drawn more than 370 jobs and $4.5 billion in private investment. Craig Johnson, mayor of Elk Grove Village, added that data centers help with water and utility taxes and improve the economy. People employed at the centers “fill up our hotels, eat at our restaurants and buy our gas,” he said.

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