Stumbo: Michigan Data Center Approval Process Was Rushed

Ypsilanti Township Supervisor Brenda Stumbo described Michigan’s legislative process for approving data centers as rushed, arguing that lawmakers failed to consult local officials before granting tax incentives to developers.

Stumbo made the remarks during a panel discussion at the Bridge Michigan Issues Summit held in Detroit on October 26. The event gathered more than 375 attendees, either in person or via virtual streams, to debate pressing state issues ahead of the November election.

The summit capped a yearlong initiative called Bridge Listens, which relied on survey responses from more than 6,400 readers to identify top concerns. Environmental topics, including the expansion of data centers, ranked high on that list.

Stumbo said residents feel blindsided by the speed and scale of new construction. She noted that local public officials are now left to negotiate terms with some of the world’s wealthiest companies without having been part of the initial state-level decision-making.

"It was rushed," Stumbo said. "And we know as individuals, in our personal lives and professional lives, when you rush something, it doesn’t really go well."

Michelle Martinez, director of the University of Michigan Tishman Center for Social Justice and the Environment, agreed that the process left many feeling unheard. She stated that by exempting qualifying facilities from sales and use taxes, lawmakers opened the floodgates to development with little input from residents.

Despite the opposition, Jeff Guilfoyle, a senior strategist at Public Sector Consultants, highlighted the potential economic gains for local communities. He cited Saline Township as an example, where annual property tax revenue from the forthcoming Stargate data center, built by Oracle and OpenAI, will rise from a few hundred thousand dollars to more than $10 million annually.

Guilfoyle said the facility is expected to employ 450 people permanently on-site while supporting thousands of temporary construction jobs. He described the revenue increase as a key driver for the community.

Polling data presented at the summit indicates that nearly two-thirds of Michigan residents oppose the building of new data centers. This sentiment has intensified just two years after the state passed tax breaks designed to lure developers.

Erik E. Nordman, director of Michigan State University’s Institute of Public Utilities, addressed the strain on the state’s power grid. He noted that a single 1-gigawatt facility demands as much power as a large US city. While state policy prohibits utilities from forcing other customers to shoulder the cost of infrastructure investments for data centers, Nordman said the impact on rates remains complex.

In some areas, the addition of large data centers has helped lower residential rates by spreading the cost of maintaining poles and wires among more customers. In other areas, demand has outstripped existing capacity, driving rates up. Nordman called the long-term outlook challenging, particularly as Michigan works to meet its mandate to transition to 100% clean energy by 2040.

"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."