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Data center developer said lakefront project wouldn't be feasible without demolition
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Data center developer said lakefront project wouldn't be feasible without demolition


A few years ago contractors tore down the stately art deco State Line Generating Station that was built in the 1920s, paving the way for a massive data center project that could result in as much as $200 million in investment on the Hammond lakefront.

The coal-fired power plant was one of the worst polluters in the Chicago area, repeatedly violating the Clean Air Act before it was shut down in 2012. The main power plant building was architecturally distinguished, designed by the same firm that did the Civic Opera House, Field Museum Merchandise Mart, Shedd Aquarium and Wrigley Building in Chicago.

Workers started tearing it down piece by piece back in 2014, and the data center project wouldn't be possible today without that demolition and other steps to ready the site to redevelop, Indianapolis attorney Tom Dakich said.

He and New York City-based data center mogul Peter Feldman hope to start construction this year on an initial 105,000-square-foot Indiana NAP data center building on the 77-acre site on Lake Michigan at the border of Hammond and Chicago. They plan at least $40 million in investment, creating 250 construction jobs, and eventually could build 1 million square feet of computer server storage space for companies to lease to house their data.

They wouldn't have gone forward if they had to raze buildings and clean up the polluted site.

"If we had to wait a year for it to be cleaned up, no we couldn't do the project," Feldman said. "We'd have too much investor risk and a lot of other issues, such as when we could provide service to customers. Financiers don't like brownfield sites."

Owner Sam Townline Development Inc., which shares principals with Hammond's Beemsterboer Slag Corp., demolished the lakefront plant where workers burned coal for 83 years, initially envisioning a marina and condos there.

Michael Kaysen, a Hammond resident and owner of the Sidecar Art Gallery in the city, wishes some effort had been made to preserve the art deco building and perhaps repurpose it as an art museum or some other attraction.

"It was one of the last, grand buildings from that time period, easily the largest and most beautiful," he said. "It can never be replaced, and it is only gone because we didn't apply the imaginative power necessary to find a way to save it and we don't value our history the way we should. Northwest Indiana should take every opportunity to reclaim beautiful lakefront property for the public that it is offered considering heavy industry has dominated that land use for over a century. A lakefront park with a museum next to the marina (effectively extending Calumet Park) is a no-brainer. This would have brought massive tourist dollars to the area and, in my opinion, many more jobs. As a bonus, it would have been beautiful. Instead we get an industrial park. Yay."

The data center project will set aside some land for the Marquette Greenway Trail that connects Chicago to Northwest Indiana. It will also have a greenhouse so Purdue University Northwest students can do research there and a tech incubator that Hammond Mayor Thomas McDermott Jr. insisted on.

"The connectivity to the fiber there will mean better graphics, quicker internet, faster everything," Dakich said.

Dakich also credited the city of Hammond for making the site developable despite challenges like electric transformers, high-tension electric lines, multiple train tracks and general inaccessibility. Hammond incentivized development by placing the city in a federal opportunity zone that will make investment eligible for new market tax credits and setting up a tax-increment financing district that could fund site improvements last year while pitching the property as a potential site for Amazon's second headquarters.

"There's some flexibility with the financing," Dakich said. "They had the site ready."

Currently, the isolated, largely vacant property has an otherworldly feel.

"It looks like Mars," he said. "If you painted it red, you could film a movie about Mars there."


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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.

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