Martindale Brightwood data center overwhelmingly passes

Metrobloks, a Los-Angeles-based startup, is one step closer to building its proposed $500 million data center in Martindale Brightwood after the city's Metropolitan Development Commission on April 1 approved rezoning the land to fit a data center.

In front of a packed house at the Indianapolis City-County Building, the Commission overwhelmingly passed the project with the backing of district councilor Ron Gibson and the Indy Economic Development Inc., the city's economic incentives arm.

Metrobloks plans to spend $500 million to build two large buildings to house large servers on the 14-acre site of a long-abandoned drive-in theater just north of the intersection of 25th Street and North Sherman Drive. The campus would span roughly 168,000 square feet and include 36 electrical generators. AES will supply power to the 75-megawatt center, with Metrobloks agreeing to pay for 100% of fiber and energy infrastructure upgrades needed.

The Metropolitan Development Commission approved the rezoning by a 6-2 written ballot vote. The Commission did not take an oral vote, so it was not immediately clear how each commissioner voted. Commissioner Brandon Herget was not present. A motion by Commissioner Brent Lyle to dismiss the request failed earlier in the hearing.

Metrobloks has applied for tax abatements for the project and IEDI has offered an initial incentive package, the terms of which have not been disclosed.

Nearly 100 people gathered to speak against the data center proposal. Many of them addressed the neighborhood's quality of life plan and argued the data center does not create jobs or serve a greater good for Martindale Brightwood, a historically Black neighborhood where about 11% of people obtain a degree past high school.

"Our city-certified quality of life plan created by residents, for residents, outlines our priorities for sustainable development, affordable housing, public safety, criminal justice and real economic development," said Rev. Fitzhugh Lyons Jr., pastor at Galilee Missionary Baptist Church and a member of the Black Church Coalition. "A data center does not align with that vision."

Tyler Ochs, the attorney for Metrobloks, said the small-scale urban data center would revitalize a long vacant site near a powerful electricity substation. In addition, the site could generate property taxes of about $11 million a year before any tax abatements compared to the roughly $3,800 the land raises annually now, said IEDI attorney Doug Brown.

In his presentation to the commission, Ochs pushed back against what he called misnomers about the project. He said the site would use a closed-loop water system, with about 5,000 gallons a year needed to cool computer systems. Large-scale data centers can use millions of gallons of water.

Nor would the center look like a hyperscale data center campus, which can span hundreds of acres. Instead, it would look more like a professional building with about 45 permanent "high-skilled" workers employed on the site.

"We think this fits and integrates much better into the community and looks like office buildings," Ochs said.

Metrobloks initially pledged $2.5 million for affordable housing in the area if the project got approved, Ochs said. Near the end of the April 1 hearing, Metrobloks CEO Ernest Popescu said the company would dole out as much as $20 million to neighborhood efforts. However, he provided few additional details about who would be developing those homes or what organizations would receive the money.

Because the 2505 N. Sherman Dr. site has sat idle for a long time, this project represents broader economic development for the city, Gibson said.

Data centers currently don't have a place in city zoning code, leading to back-and-forth debates over where the energy-intensive, computer-filled campuses should be located. The land at 2505 N. Sherman Dr. is zoned as light industrial and is in the middle of a residential neighborhood and adjacent to a grocery store and across the street from a library.

City staff said Metrobloks needed new zoning to build on the site, which is currently used for truck and trailer parking. In the hearing, staff planners said they believed the site fit with the light industrial recommendation under the 2019 comprehensive plan. Because of environmental contamination of the site, the land also has limited use and could not become say, housing.

Some people worry that such flexible zoning approvals will lead to a free-for-all for building data centers across the city in densely populated areas.

"What is the purpose of zoning under such a plan?" Councilor Jesse Brown, who represents part of the east side, asked the Commission.

Earlier this year, the Indiana General Assembly briefly discussed some steps to provide clearer roadmaps as to where data centers in Indiana can and should be built. Discussions are ongoing at the state level.

"We are still trying to figure it out," Rep. Greg Porter, D-Indianapolis, who represents Martindale Brightwood and opposed the project, said at the hearing.

A handful of City-County councilors — Vop Osili, Rena Allen, Dan Boots, Keith Graves, Carlos Perkins and Leroy Robinson — released a statement last month calling on Metrobloks to pause or withdraw its request, citing ongoing efforts to adjust zoning law to consider some resident concerns.

The City-County Council will rubber stamp the zoning change but typically does not take a full vote on zoning approvals. Only the district councilor representing the land in question can call a proposal down to take a larger vote in an effort to overturn a decision. Gibson is not expected to force another vote, given that he supports the project.

In contrast, a proposal by Google in Franklin Township ultimately failed last fall after the company withdrew the plans before an expected City-County Council vote called by Michael-Paul Hart, who opposed that project.

Last month, the MDC approved development of a $4 billion, 250-megawatt data center in Decatur Township, which could become the first hyperscale data center in the city.

Alysa Guffey writes business and development stories for IndyStar. Contact her at [email protected].