Chicago alderman proposes data center development to boost economic growth

CHICAGO — This week, workers began tearing down the vacant Sears world headquarters in Hoffman Estates before the site is turned into a data center, a trend that has grown popular in the suburbs and now, a Chicago alderman wants to bring more of them into the city.

That alderman is the 36th Ward’s Gilbert Villegas, who is advocating for a plan at City Council to convert vacant Chicago land into data centers.

At a cost of millions annually, city government stores its data at centers locate outside of Chicago. Villegas, chairman of the Council Technology Committee, has written an ordinance requiring more city data to be stored in the city.

“We have data that we’re paying hyperscalers to store for us, and what we’re seeing, is a lot of that data is not being stored in the City of Chicago, and quite frankly, the State of Illinois,” Villegas said Wednesday.

A data center is a physical facility used to house information and critical applications. Each center has routers, storage systems and servers that play an everyday role in the common American’s lifestyle.

“Your phone is using a data center right now,” said Craig Huffman, CEO of Metro Edge Development Partners. “The data that is being stored ties to a physical building. Even when people talk about the cloud, the cloud is a data center, it may be a cluster of data center.”

Huffman and Metro Edge Development Partners want to build a data center in the Illinois Medical District on the city’s West Side using private funding.

“City of Chicago employees are required to live in Chicago, our data is not,” Huffman said. “That’s a question you should ask, and why aren’t we leveraging that for our economic development benefit?”

As Huffman makes his pitch, Villegas is telling his colleagues at City Council data centers can help the city raise new property tax revenue.

“I would say over ten years, you’re talking about north of $100 million in property tax revenue,” Villegas said. “I got this idea from taking a look at Loudon County. Loudon County, Virginia went from $100 million in property tax revenue from data centers to $1 billion in property tax revenue.”

While Villegas works to build support for his measure, some of his colleagues have raised concerns about the amount of energy data centers use, and the potential environmental impact building them could have on the area.

“In my ordinance, there’s a requirement that the sustainability officer will create an interdepartmental working group,” Villegas said. “So that way, we can analyze other new technology that’s coming onboard so that we can address sustainability.”

The Council Technology Committee will hold a hearing on Villegas’s ordinance next Wednesday, with the goal of securing final passage later this month.

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