Community Group Files Suit Against Port Washington’s Data Center
Argues that subsidy not needed and tax incremental financing district invalid.
This is an aerial rendering of what the planned data center campus in Port Washington could look like. Source: City of Port Washington
A community group opposed to the planned data center campus in Port Washington is suing the city to try to block a tax increment financing district created to support the project.
The Port Washington City Council in November approved a resolution creating the district to fund around $175 million in infrastructure improvements to serve the development. The district also received approval from the city’s Joint Review Board that month.
Tax increment districts, or TIDs, are a geographic area within a municipality that’s being targeted for development, where local governments divert increased property tax revenue generated from the district’s growth to finance development infrastructure or incentives.
The $15 billion campus is being developed by Vantage Data Centers, OpenAI and Oracle. The city’s development agreement is with Vantage.
Both the data center and the TID have faced pushback for months from a group called Great Lakes Neighbors United. Three members of the group were arrested at a city council meeting in December. The group has created a website opposing the project, hosted events and supported a recall effort of the city’s mayor.
Last month, Great Lakes Neighbors filed a lawsuit against the city and its Joint Review Board challenging the TID.
The suit says the TID provides property tax reimbursement and interest payments to the developer totaling more than $458 million over the next 18 years. It argues the project does not need “public subsidy” and that the district was created to prevent the project from being developed elsewhere.
The civil complaint also argues the TID is invalid because the properties in its boundary are not blighted and that there isn’t enough evidence showing the project will improve property values in the district.
“The effect of the approval of the TID will be to reward the Developer with more than $458 Million in subsidy for merely doing what private commercial property owners are required to do by the free market, which is to maintain and as necessary renovate their properties,” the complaint reads.
The suit also says the city will pay the developer $187 million in interest payments because the company will front the cost of building infrastructure supporting the project. The suit describes those payments as a “windfall” that “unjustly and improperly” enriches the developer.
“There is no basis in TID law or otherwise for a City municipal government to promise to pay $187,000,000 to a private developer,” court documents state.
It also argues that the public will not receive any benefit from the project increasing the tax base for 18 years, with no guarantee the public “ever receive any benefit.”
The city has filed a motion to dismiss the suit, while Vantage has filed to intervene in the case and also called for the suit to be dismissed.
In the city’s brief supporting its motion to dismiss, its attorneys argued that Great Lakes Neighbors “either misunderstands or intentionally misrepresents the nature of the Developer’s agreement.” The city says the suit “incorrectly states” that it will not benefit from a property tax revenue perspective, while omitting “crucial deal points.”
To qualify for any incentive from the TID, Vantage must spend $175 million on installing, upgrading and repairing infrastructure, the brief states.
If the project delivers on the property value increases estimated in the city’s project plan, Port Washington and other local taxing authorities, like the school district, would see an increase of more than $30 million annually in tax revenue from the project, the city’s document states.
The city’s brief also says the project will benefit property tax revenues in the short-term because the TID’s base property value is being certified in 2026 instead of 2025, adding $120 million in valuation going forward.
“The Developer’s Agreement and the TID, working together, shield the City from all financial liability and will result in significant public infrastructure upgrades being paid for by a third party in addition to a substantial increase in the City’s tax base,” the city’s brief reads.
A motion hearing in the case is scheduled for March 13.
Community group challenges Port Washington’s data center TID in court was originally published by Wisconsin Public Radio.
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