Mishawaka and St. Joseph County officials have worked together to entice Microsoft to build a data center in Granger, but they’re now in a race against each other to provide water and sewer to the site.
The city of Mishawaka has spent over $40 million to develop its newest wellfield north of Douglas Road under Juday Creek Golf Course. They did it to serve growth in the city’s north side, but also anticipating development along the Capital Avenue corridor.
Now the city fears that investment could go to waste. They’ve planned to extend city water to the data center that Microsoft plans in Granger along Cleveland Road, east of Capital.
The city's Common Council Monday night voted unanimously to tell state regulators that the city wants to serve the site. At Mayor Dave Wood’s request, the council waived their rules so they could pass the ordinance on both readings in one meeting.
Matthew Lentsch, Wood’s executive director of development and governmental affairs, said the county last week said it plans to file a competing claim with state regulators to serve the site.
"Now all that work is at risk unless we act now," Lentsch told the council. "If we wait another two weeks, it may be too late. Your action tonight ensures Mishawaka continues to lead with purpose, with foresight, and with unity. Let's move forward together the Mishawaka way."
County Council President Dan Schaetzle and County Commissioners President Carl Baxmeyer spoke against rushing the ordinance. They said the city last year indicated it wouldn’t try annexing the site once it extended its water lines there, but now they say that’s their plan.
Schaetzle said he would never have voted for the rezoning Microsoft needed if Mishawaka officials had said they planned to annex the site.
"Is this the Mishawaka way?" Schaetzle said, mocking a slogan the city uses. "I'm just deeply disappointed. I feel misled. This is not the way we should be working with each other."
Schaetzle and Baxmeyer said the city officials who said they didn't plan to annex the site included Ken Prince, Mishawaka's director of planning and community development.
But Prince denied he would have ever made such a claim.
"What I likely said, or what I should have said at that time, would be that that property is not currently contiguous to the city," Prince said. "Our policy is that when we provide sewer and water, that we annex the property, and that's likely what I would have said at that time.
"So the fact that we didn't have contiguity means we don't currently have the ability to annex it, but regarding a lack of desire, I don't believe I would have ever, ever said that."
Prince said he's also bothered by Schaetzle's premise that the site being annexed by Mishawaka would somehow be a bad thing for Microsoft and the county.
"I don't understand that when every single property owner in the city pays county property taxes. So I don't understand the jurisdictional issue of the property. If anything, it being annexed into the city has benefits to the county because they are no longer providing services, the city is providing services. So if you want to get the most bang for your buck, you would want that property to be in the city, not the county."
Baxmeyer said he had supported the city’s plans to serve the site only because he assumed, having just negotiated a deal with Amazon, that Microsoft would need the higher level of water that the city could extend to the site.
But Baxmeyer said that Microsoft said that it would not need as much water because it will use a different cooling process than Amazon.
"We're all put in a situation where the game changed, the goalposts moved, and now we have to react to that," Baxmeyer said.
So now the county wants its Soil and Water Conservation District, which operates the sewers that serve the Granger business district, to buy Granger Water LLC. That’s the small developer-owned water system that serves the Hills at St. Joe Farm subdivision near the site. The conservation district would then serve the site with sewer and water instead of the city.
"They can use the alternative of using the St. Joe Farm's water system, they can tie into the Granger sewer that goes up to Ontwa Township and then over to Elkhart," Baxmeyer said. "Why would they sign a development agreement that would require them to pay an estimated $80 million more to pay for the city utilities?"
Baxmeyer said the city has made it clear that it would not force its residents to pay to extend the lines to the site.
Following the council action, Lentsch on Tuesday told WVPE that the city was working on sending its newly updated utilities service map to state regulators, the Indiana Utility Regulatory Commission, and they'll file it as soon as possible.
