Port Washington is moving forward with a tax incremental financing plan for a massive $15 billion data center campus despite pushback from local residents.
The Port Washington Common Council unanimously approved a resolution Tuesday to create Tax Incremental District, or TID, No. 5 for the data center campus.
The decision comes around two weeks after Vantage Data Centers, the developer behind the project, announced OpenAI and Oracle would be the users of the site as part of the companies’ Stargate program, a $500 billion national push to expand AI.
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Vantage will pay upfront for an estimated $175 million in infrastructure improvements for the project — including water and sewer main extensions and road improvements — through the newly created TID. Port Washington’s Joint Review Board is set to vote on the TID on Nov. 18, the final step in the process.
The Port Washington Common Council approved the development agreement for the project in August. Even so, residents have spoken out against the plans for months. More than 100 people showed up to the council meeting on Tuesday, which was moved to a banquet hall at a hotel so more people could attend.
“Be mindful, we’re not against growth,” Port Washington resident Scott Lone said during the hearing. “We’re against this kind of growth. We believe investing in people, in small businesses, in local projects that strengthen our community, instead of draining from it.”
Lone urged the common council to vote against the creation of the TID.
“Let’s stand up for responsible, transparent, community-centered development,” Lone said. “Let’s make sure Port Washington’s future is built by us and for us.”
OpenAI and Oracle’s data center campus in Port Washington joins sites in Texas and New Mexico as part of the Stargate program, an initiative that was announced in January by President Donald Trump. OpenAI is the company behind ChatGPT, while Oracle is a software and cloud computing company.
Christine Le Jeune is with Great Lakes Neighbors United, a group of residents opposed to the data center plans. Le Jeune, who lives in Port Washington, said she and other residents are concerned that the TID was “marched ahead and passed” with little input from the community.
“Especially given the massive nature of this, as a gigantic complex,” Le Jeune said after the meeting. “It’s not just one data center — this is a gigantic complex.”
Vantage has said the campus in Port Washington, named “Lighthouse,” could create more than 4,000 construction jobs. Local construction groups have voiced support for the development.
OpenAI and Oracle will have around 700 jobs at the campus. Vantage Data Centers has said they will also have around 330 employees working at the four data center buildings.
The project is expected to contribute $2.7 billion to the regional economy, according to Rebecca Gries, the executive director of Milwaukee 7 Regional Partnership.
Kaitlin Monaghan, director of public policy of North America for Vantage Data Centers, said they chose the site because of how much local officials “sought out economic development.”
“We were struck by how the city of Port Washington leaders wanted to be a part of building the future,” Monaghan said during Tuesday’s meeting.
TIDs work by capturing growth in property value within the district. They funnel property tax generated by newly created value to repay TID costs rather than having that new revenue go to taxing bodies like school districts.
Vantage will pay the upfront costs for the infrastructure improvements. According to the city, those infrastructure improvements will include expanded capacity for water and wastewater treatment facilities, upgraded water mains and sewer lines, power infrastructure and a new water tower.
The revenue for the TID for the data center campus would repay the company for the upfront cost of infrastructure improvements. The TID would remain open for up to 20 years, or until Vantage is reimbursed for all its costs — whichever comes first.
“Vantage is putting all the capital up front for all of the infrastructure. We pay them back,” Port Washington Mayor Ted Neitzke IV said during a recent common council meeting. “If they fail, project stops — we are not obligated to pay that debt back.”
Todd Taves, senior municipal advisor for Ehlers Public Finance Advisors, said the $175 million in estimated infrastructure costs is a “conservative estimate.”
“The city will receive those funds from Vantage, execute the projects, pay the contractors, and then Vantage will be able to be reimbursed again, solely from the tax increment that they create,” Taves said during an October common council meeting.
Taves also said Tuesday that the city “is not borrowing any money to implement this project.”
Clean Wisconsin releases analysis on offsite water usage
The four data center buildings are expected to need 1.3 gigawatts of electricity. A $1.4 billion transmission line project has been proposed by American Transmission Co. to help support the project.
Random Lake resident Jennifer Brinkman said a power line would run through her property under one of the routes that American Transmission Co. has proposed for the project.
“We’re arguing over minutia, when the big elephant in the room is that this (data center development) shouldn’t happen here by the Great Lakes,” Brinkman said after Tuesday’s meeting.
Once the full buildout is complete, the campus could need as much as 3.5 gigawatts of electricity, according to a Clean Wisconsin analysis released Tuesday. The analysis said indirect water needs for data centers, or off-site water use, refers to water that is withdrawn at power plants to generate electricity for the data centers.
“If non-renewable energy sources are used to meet those needs, its (Port Washington data center campus) off-site water use would be at least 54 million gallons a day,” the analysis said.
Fifty-four million gallons of water is more than twice the amount of water used for homes and businesses in Green Bay, according to the analysis.
“AI data centers require an enormous amount of power,” Clean Wisconsin clean water manager Hannah Richerson said in a statement. “If even a portion of that need is met by water-intensive energy sources like gas, coal or nuclear power plants, we would expect to see significant water withdrawals to cool those plants.”
Vantage has said the data center buildings will use a “closed-loop liquid cooling system,” designed to use less water. Dana Adams, president of North America for Vantage Data Centers, recently told WPR the campus will be a “very water-sustainable campus.”
A groundbreaking for the data center development is expected to be held in November. Construction could be complete in 2028, according to Vantage.
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