Port Washington Passes Referendum On Data Center Deals

This is an aerial rendering of what the planned data center campus in Port Washington could look like. Source: City of Port Washington

In response to concerns over a massive data center project, voters in Port Washington overwhelmingly supported a referendum Tuesday that gives residents more power over local development incentives.

The referendum passed with about 66 percent of the vote, according to unofficial results from Ozaukee County. The measure, which followed a backlash over the city’s approval of a tax incremental district for a multi-billion-dollar data center project, requires voter approval for certain large development incentives.

Great Lakes Neighbors United, a community group that’s been opposed to the Port Washington data center development, celebrated the referendum’s passage, framing it as a win for “transparency and public participation.”

The lopsided outcome reflects broader unease in Wisconsin over the rapid expansion of data center developments, seen both in recent polling and in local opposition across the state.

Charles Franklin, director of the Marquette Law School Poll, said the results in Port Washington are “very much in line with that public sentiment” statewide.

“It doesn’t look like this is peculiar to the Port Washington area, though, of course, they do have active data center construction in that area,” he said.

Since October, the share of voters who say the costs of those projects outweigh the benefits has grown from 55 percent to 70 percent, according to February’s Marquette Law School poll. In March, 69 percent of voters said the costs outweighed the benefits.

Franklin said the shift in sentiment from October to February was “the biggest shift in 14 years of Marquette polling that we’ve seen on any issue.”

“I think a big part of it is that it is a new issue,” he said. “This wasn’t an issue that we’ve been debating for 10 or 15 years, and the parties have gotten entrenched in their positions on it.”

Charles Franklin is the director of the Marquette Law School Poll. Angela Major/WPR

The March Marquette poll found 62 percent of Republican voters, 69 percent of independents and 77 percent of Democrats said the costs of the data centers outweigh the benefits.

Voters generally see benefits from data centers as jobs created by them and new tax revenue generated in their communities, but they’re skeptical about the projects’ potential water and energy usage, Franklin said.

He added that the data center issue could “hover” over elections in November for governor and seats in the state legislature.

He said the gubernatorial race in the fall will “be interesting.” He said the Republican frontrunner, U.S. Rep. Tom Tiffany, has expressed “some skepticism” about data centers, while “virtually all of the Democrats” in the race have expressed skepticism or opposition to those projects.

“It’s hard to see right at the moment where the group of supporters of data centers are in the state (and) what political leaders, public leaders, are really trying to tell what the benefits are,” Franklin said. “Instead, the focus is very heavily on the costs of them.”

He also said Wisconsin may see more local referendums around data centers, especially in the absence of statewide regulation of data centers.

In November, voters in Janesville will face a similar ballot initiative that would require voters approve development on a former General Motors site if the project’s costs are more than $450 million. The city is hoping to develop the brownfield into a data center.

A van leaves the data center construction site in Port Washington in mid-March. Joe Schulz/WPR

“Given the Port Washington vote, you have to wonder whether we’re in a position where these votes are just going to go against data centers until — or if — people ever change their minds about what the benefits and costs are,” Franklin said.

What does the Port Washington referendum do?

The referendum in Port Washington approves an ordinance requiring future Tax Incremental Districts with project costs or a base value of $10 million or more to receive approval from Port Washington voters before they can move forward.

Residents collected enough signatures to require the city council to either pass the ordinance or place it on the ballot as a referendum. The push for the ordinance came after the council approved creating a tax increment district to support the development of a massive, multi-billion-dollar data center campus.

Christine Le Jeune, a spokesperson and founding member of Great Lakes Neighbors United, said the city council’s approval of a TID to support the data center project drew frustration from residents. She said many in the community felt strongly that more people “need to have a say” in major tax increment financing decisions.

“This should not be single-handedly decided by a handful of representatives who are failing to meet the community where we’re at with all the questions that we have about this financing, how that will impact us and whether this is something that will truly benefit the community,” Le Jeune said.

Earlier this year, business groups sued the city of Port Washington, challenging the legality of the ordinance.

The business groups argue the ordinance would harm employers and slow economic development. The city’s legal filing responding to the lawsuit said that it also has “concerns related to the legality of the proposed ordinance.”

Port Washington Mayor Ted Neitzke did not immediately respond to a request for comment on the referendum’s passage.

The Metropolitan Milwaukee Association of Commerce was one of the groups that sued to block the ordinance from taking effect. In a statement, a spokesperson for the association said the ordinance’s approval raises “serious legal and economic concerns” while sending the signal that “Port Washington is closed for business.”

“Developers that bring investment and jobs to Wisconsin communities will not be willing to risk having their projects — or their names — placed on a ballot in Port Washington as a condition of investment,” the statement reads. “Adding political hurdles to an already rigorous process that has existed for decades creates uncertainty and risks pushing jobs, housing and investment elsewhere.”

Cranes are seen inside the Port Washington data center construction site in mid-March. Joe Schulz/WPR

In February, a judge declined to block the ordinance from going to referendum and allowed Great Lakes Neighbors United to intervene in the case. According to the Milwaukee Journal Sentinel, the judge said it wasn’t appropriate for the courts to stop an election or rule on an ordinance that was not in place.

A scheduling conference in the case is set for April 16 at the Ozaukee County Justice Center.

“Now that the referendum has passed, it will be revisited as we suspected it could be. That was the indication based on the last hearing,” Le Jeune said. “I just hope that the judge will take into consideration the overwhelming support that this does have.”

The ordinance would not affect the TID the city created to support the data center project. Great Lakes Neighbors United filed a separate lawsuit challenging that TID.

Port Washington voters pass referendum fueled by concerns about data center project was originally published by Wisconsin Public Radio.