Small Elk Grove TIF to help fund environmental cleanup for big data center

  • As part of a plan to build a massive data center campus, Elk Grove Village trustees on Tuesday created a new tax increment financing district to help pay for environmental cleanup on the site.

    As part of a plan to build a massive data center campus, Elk Grove Village trustees on Tuesday created a new tax increment financing district to help pay for environmental cleanup on the site. Courtesy of Elk Grove Village

Updated 10/26/2022 2:35 PM

Elk Grove Village is using a small, new special taxing district to help pay for environmental cleanup on a portion of land that's proposed to become the largest data center campus in town.

The 4.9-acre tax increment financing district, formally enacted by the village board Tuesday night, encompasses the Vulcan Construction Materials site at 1520 and 1700 Midway Court, next to the Jane Addams Tollway.


The approval of three TIF ordinances came right after the board annexed the property into the village and automatically zoned it for an industrial use.

The taxing mechanism -- where property taxes above a certain level are diverted away from local governments and into economic development efforts -- has been long contemplated for the Midway Court property. A first-reading village board vote on the TIF ordinances was taken in June 2021, but a final vote was delayed during sale negotiations for the Vulcan property.

The village purchased the site for $16.5 million in May, and in turn is selling the land to San Francisco-based Prime Data Centers Corp., which is planning to build a $1 billion, 150-megawatt data center campus across two dozen acres at the prominent northwest corner of Higgins and Busse roads. The Vulcan site is the last major part of a complex property assemblage process led by the municipality that also saw offices, a retail building and hotel being bought up, torn down, and sold to the data center developer.

Prime is planning to construct three 3-story buildings totaling more than 750,000 square feet that would house servers, wires and related equipment for it and third-party customers that lease space there. It would be the 12th data center in Elk Grove and the largest -- about double the size of what Microsoft is building down the street at the Elk Grove Technology Park.

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But as the Vulcan property contains underground petroleum fuel storage tanks and a well, village officials plan to use proceeds from the new TIF to help pay for environmental remediation. The taxing district could fund an estimated $20 million in redevelopment project costs, according to a study by Camiros Ltd., the village's TIF consultant.

Mayor Craig Johnson said he expects the new TIF to be short-lived -- maybe 5 to 10 years, though the district can last 23 years under state statute.

The district -- which covers only two tax parcels -- is wholly bounded and contiguous to the village's much larger 917-acre Busse/Elmhurst TIF, which was established in 2014 and covers much of the sprawling industrial park.

A groundbreaking for the phased data center project is scheduled for Nov. 15, with Prime starting construction near Oakton Street then developing north toward the tollway.

The final piece required is Illinois Department of Transportation approval to vacate Midway Court, a dead-end street that is currently accessed at the curve on Higgins. Cook County has already signed off on the plan, which would close the public road to make it part of the larger private development.

A closing on the Vulcan property is scheduled for December, but it will be allowed to continue its concrete recycling business there until February, officials said.

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