Michigan City's New Data-Center Pause Exempts Google and Drops Its Tax-Break Ban

Michigan City City Hall, where the Common Council took up the new data-center moratorium on Oct. 20. Photo: Dennisyerger84, CC BY-SA 3.0, via Wikimedia Commons.

Forty years. That is how long the computers inside Google's data center on Royal Road will be fully exempt from local personal property tax under the deal Michigan City's Common Council approved in September 2025. On Oct. 20 the same council started work on a moratorium meant to stop the next data center, and the draft is written so that Google's campus, and every phase already permitted there, stays exactly where it is.

The new ordinance would halt new data center development in the city until July 31, 2028, and add a section for hyperscale facilities to the municipal code, the Post-Tribune's Maya Wilkins reported from the meeting. Google's project is exempt because it has already broken ground. WSBT covered the first reading, where protesters chanted outside City Hall before a packed meeting.

Councilman Bryant Dabney, a Democrat and one of the ordinance's sponsors, told WSBT the city has no plans to stop what is already underway. "Some people want us to stop what's going on now, but we have millions of dollars that have already been given to Michigan City with permitting fees, building fees that are happening over there," he said.

One line vanished between drafts

This is the council's second try. In September it indefinitely tabled an earlier moratorium after members couldn't agree on how long the pause should last, according to the Post-Tribune. That first version asked for environmental rules on generators, fuel storage and noise, and it said plainly that the city would not grant a tax abatement for a data center.

The new version leaves that sentence out. Resident Savannah Lyle said she came ready to thank the council until she read both drafts side by side. "In my opinion, the money is exactly where Project Maize went wrong," she said, using the code name the Google project carried before its owner was public. "My kids will be raising kids of their own before that (abatement) runs out."

What the city already gave away

Lyle's numbers match the record. When the council approved four abatement resolutions on Sept. 2, 2025, after more than three hours of public comment, none passed unanimously, the LaPorte County Herald-Dispatch reported. Inside INdiana Business laid out the terms: a 50% abatement for 10 years on building improvements, covering $257 million of the promised $800 million investment, and a 100% abatement on computing equipment for 40 years, in exchange for at least 30 jobs.

The city's own financial analysts put total taxes from the site over those 40 years at about $57 million, with just over $27 million going to Michigan City and the rest to LaPorte County. The company also agreed to pay the city $5.5 million when the first building opens and $500,000 a year for 39 years after that, plus $100,000 for sewer work and $1 million to the Michigan City Economic Development Corp. That came on top of $41 million in state tax breaks from the Indiana Economic Development Corp., the same report said.

Residents didn't even know whose project it was. Many city officials signed nondisclosure agreements, and the tax papers named a shell called Lavender Fields Holdings LLC, which Inside INdiana Business traced to the same Delaware address as other Google-linked companies. Google has since taken over the project, which the city's economic development corporation now values at $832 million on the long-vacant former Federal-Mogul site at 402 Royal Road. Councilman Vidya Kora and Dabney were both listed among the four introducers of the Project Maize taxpayer agreement on the Sept. 2, 2025 council agenda.

The lawyer's answer

Kora, an at-large Democrat, said the first phase is about halfway built and permits have been issued for the second. "The foundation has been laid," he said, adding that pulling those phases into the moratorium "would result in a huge liability for the city." Council attorney Jewell Harris told members a fully permitted project under construction can't be hit retroactively. "Any action by the council to interfere with the lawful use of property, including the lawful operation of a business, would expose the city to significant liability," Harris said.

That is a real principle, and it protects every Hoosier landowner, not just Google. A city that can change the rules on a half-built project can do it to a family farm or a corner shop. But the residents' complaint goes past what is already in the ground. Kora said any expansion beyond Google's approved phases and footprint would need zoning changes, and he pledged, "I can speak for myself, I will oppose it." Nothing in the new draft puts that promise, or a ban on future abatements, into law.

Eileen Mark told the council residents were "blindsided" because adequate notice wasn't given when the project was announced, and she wants the ordinance to bar any further Google expansion. ABC57 reported that critics also worry the draft's "vested rights" exemption is open-ended. Ashley Williams, executive director of the environmental group Just Transition Northwest Indiana, accused the council of choosing "a billion dollar corporation" over its constituents.

Councilwoman Nancy Moldenhauer, a 6th District Democrat and one of the original sponsors, said she will bring the first moratorium back at the next meeting, with changes that would let the council's planning and zoning committee hold two public workshops on what the zoning rules should include.

Amendments can be offered at second reading, which WSBT reports is set for the council's Nov. 4 meeting; a final vote won't come until third reading. Taxpayers watching that meeting will know where to look: whether the sentence about tax abatements finds its way back in.

Written by Hoosiers, for Hoosiers.