Michigan Residents Feel Shut Out of Data Center Decisions Amid Rushed Approvals and Growing Concerns Over Energy and Water

Brenda Stumbo, the supervisor of Ypsilanti Township, said Michigan's process for welcoming data center developers was rushed and lacked public input. She spoke at an expert panel hosted by Bridge Michigan at Marygrove Conservancy in Detroit, where more than 375 people attended virtually or at a watch party at Alpena Community College.

The discussion centered on the tension between Michigan's economic goals and the energy and water demands of computing facilities. Michelle Martinez, director of the University of Michigan Tishman Center for Social Justice and the Environment, said that by exempting qualifying data centers from sales and use taxes, lawmakers "opened the floodgates" to development with little input from residents. She said this left many feeling "blindsided by the scope, the speed and the lack of channels to have a voice in the decision-making."

Panelists offered differing perspectives on how the industry may shape the state. Jeff Guilfoyle, senior strategist at Public Sector Consultants, said annual property tax revenue in Saline Township from Oracle and OpenAI's forthcoming Stargate data center will rise from a few hundred thousand dollars annually to more than $10 million annually. That facility is also expected to employ 450 people permanently on-site while supporting thousands of temporary construction jobs.

Public opposition remains high despite these figures. Nearly two-thirds of Michigan residents oppose the building of data centers in the state, according to recent polling. Stumbo said lawmakers welcomed the industry to Michigan without consulting voters or local public officials who would be left to negotiate details with some of the world's wealthiest companies. "It was rushed," Stumbo said of Michigan's process, "and we know as individuals, in our personal lives and professional lives, when you rush something, it doesn't really go well."

Erik E. Nordman, director of Michigan State University's Institute of Public Utilities, addressed whether Michigan utilities can absorb the energy demand. He noted that state policy prohibits utilities from forcing other customers to shoulder the cost of investments needed to serve data centers. However, he said meeting Michigan's 100% clean energy mandate by 2040 will be difficult. "It will be challenging," Nordman said. "Very, very difficult. Because, when we put these laws in place, we had relatively flat demand growth .. now we have to work twice as hard."

Martinez noted that data center demand in other states is likely to lead to new investments in fossil fuel infrastructure. "In Texas, they have a 424 GW backlog for data centers alone," Martinez said. "The air that comes from Texas does not stay in Texas." The panel concluded a yearlong project called Bridge Listens, which surveyed more than 6,400 readers on top issues.