GAINES TOWNSHIP, Mich. (WOOD) — Tax breaks designed to aid Nevada-based data storage provider Switch in efforts to bring a $5 billion investment to the former Steelcase pyramid south of Grand Rapids will go before Kent County commissioners Tuesday.
The County Finance Committee will be asked to submit an application to the state to create a Renaissance Zone for the development of a Switch SUPERNAP Data Center at the corner of East Paris Avenue and 60th Street in Gaines Township.
That Renaissance Zone, which has to be approved by the state, will allow Switch to take advantage of tax incentives OK’d by the state late last year. Those incentives free Switch — as well as current and future data storage providers — from paying both sales and use taxes.
“The renaissance zone is necessary and important as it simply finalizes the competitive tax policies approved by the Legislature and governor in December. The application specifies that Switch will pay all but two of the local and state taxes and fees,” Switch said in a Monday statement about the process. “It also demonstrates that in just the first five years during phase 1 development, SUPERNAP Grand Rapids will bring the world’s highest rated data center ecosystem, hundreds of millions of dollars in new capital investment and hundreds of good paying jobs to west Michigan. All initial budgets and benchmarks for SUPERNAP Grand Rapids remain unchanged and will be achieved in future phases of the development.”
Switch will save about $1.1 million annually as a result of the tax breaks.
The approximately 40 data centers already operating in Michigan generated about $14 million annually in taxes prior to the legislation.
Several other states offer similar tax incentives to high-tech companies like Switch.
The application also gives a closer look at the company’s five-year plan. Switch began renovations at the pyramid site in January and plans to be up and running before the year’s end. It plans to invest over $151 million in renovations and equipment at the facility by 2021, according to an application memo.
The first phase of the project would create 103 full-time jobs with clients who use the company’s services; three jobs have already been listed on the company’s website.
Switch has promised to create 1,000 jobs by 2026. The average wage for employees will be close to $55,000 per year, not including benefits.