In the future, when your family gathers around the couch and starts streaming a movie on Netflix, the digital content may be coming faster into your home from a massive, industrial-sized data center on the shoreline of Lake Michigan in Hammond.

Indianapolis attorney Tom Dakich and New York City-based data center mogul Peter Feldman plan to invest at least $40 million in the proposed Indiana NAP data center at the site of the former coal-fired State Line Generating Plant on the border of Hammond and Chicago. The project is estimated to create 250 construction jobs for skilled tradesmen and would include a tech incubator, a renewable energy campus and a greenhouse for Purdue University Northwest. 

If enough companies lease storage space from the wholesale data center, a massive collection of computer servers that would be cooled by lake breezes and lake water, they would end up constructing three buildings totaling 400,000 square feet. It eventually could grow to 1 million square feet and an estimated $200 million in investment, which would result in a windfall in property taxes for the city of Hammond.

Dakich and Feldman, who has built data centers in seven cities across the country, foresee sharply growing demand for housing data for international carriers, cellphone providers, banks, telecommunications companies, tech companies, insurance firms, large pharmacy chains and content providers like Netflix and Hulu.

"All those movies people are downloading from Netflix or Hulu need to be stored somewhere, and we believe we can do it cost-effectively," Feldman said. "I don't remember how many megabytes are in a single movie, but in New York City it can be slow to download 'Frozen 2' because 100,000 people are watching it and taking up all the bandwidth. The content provider needs a data center close to the population as cheap as possible. The storage would cost twice as much in Chicago as in Northwest Indiana."

Feldman and Dakich determined the lakefront site, which they learned about because it was the focal point of Hammond's failed bid for Amazon's second headquarters, would be ideal for such a facility because of Indiana's low cost of doing business, as well as its proximity to dark fiber, the hub-and-spoke 350 E. Cermak data center, and Chicago metro's population since it's "six inches" from city limits.

"I asked, 'What were you thinking by looking in Illinois?'" said economic development consultant Matt Reardon, of MCR Partners LTD. "No matter what they give you, you're going to be spending more money. Your operational costs are always going to be higher because of the tax structure in Illinois and Cook County."

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Initially, the developers, who have worked on data storage projects since the 1990s, hope to build a 105,000-square-foot site on about 12 acres of the 77-acre site in the first phase. They could end up using 30 to 40 acres on the hard-to-develop site, which include electric transformers and high-tension power lines that transmit energy from state to state.

"We're not going to jump in the pool and build a million square feet right away," Dakich said. "We're going to build as we grow so we don't overdevelop. It's built to suit the market. ... We're not anticipating getting a huge customer. We're looking at slow and steady growth that will build on itself. Maybe if we can get a big customer we can accelerate the process, but our business plan is conservative and projects slow and steady growth."

Dakich, a Gary native and the brother of sportscaster and former Indiana University Men's Basketball team captain Dan Dakich, compared it to how tech giants like Apple will build enormous data centers in the middle of Utah, where costs are lower.

The Indiana NAP data center would trim its energy costs with solar panels and wind turbines. The project also would include a greenhouse where Purdue University Northwest students could conduct agribusiness research and, at the request of Hammond Mayor Thomas McDermott Jr., a tech incubator.

Start-ups could lease space at the tech incubator to take advantage of super-fast internet speed that comes with being so close to vital infrastructure. The developers have been in talks with local universities about potentially managing the tech incubator, which would be similar to ones in Chicago and Indianapolis.

"So far, no one's said no," Dakich said.


Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.