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'Transformative' lakefront data center to open in Hammond early next year

'Transformative' lakefront data center to open in Hammond early next year

HAMMOND — Construction has been completed on the shell of a $40 million building that will replace a former coal-fired power plant on Lake Michigan with a state-of-the-art data center that will help power websites, email and e-commerce.

Indianapolis attorney Tom Dakich said the first 105,000-square-foot Digital Crossroads data center building he and developer Peter Feldman are constructing at the site of the former State Line Generating Plant should be operational as soon as the end of the first quarter of 2020. It's the first phase of what could grow into a $200 million project that potentially could store data for large national companies like streaming services, health care systems and e-commerce sites.

"It's an enormous deal," Lakeshore Chamber of Commerce President Dave Ryan said. "It's replacing the coal-fired State Line Generating Plant and bringing $200 million back into Hammond."

Dakich said NIPSCO's recent decision to retire its own coal-fired power plants and cutting carbon emissions by 90% by 2030 in favor of wind farms and other energy sources would be big for business since many major Silicon Valley firms are conscious of their carbon emissions.

"It helps draw customers," he said. "The Facebooks and Amazons require huge amounts of energy but don't want to be involved in coal-burning. NIPSCO's been an amazing partner."

Local officials, including Hammond Mayor Thomas McDermott Jr., have touted the data center project as potentially transformative for the Region, as the digital infrastructure could help attract or foster more high-tech companies that could modernize and diversify the workforce. 

More than 300 construction workers have been building the first structure at Hammond's border with Chicago.

"We have walls up," Dakich said. "We are moving ahead very quickly with all the fiber aspects. We're hoping to continue to get good weather."

Regardless of temperatures, construction crews should be able to continue to make progress through the winter months since the building is under roof. Workers now are installing the floor and hooking up fiber infrastructure that will transmit mass quantities of data to and from the site.

"We're putting in fiber conduit and getting it connected," he said. "We're getting the routes put together. People at NIPSCO and (the Northern Indiana Commuter Transportation District) have been great. They've been very helpful. We've been getting Northwest Indiana connected to the superhub in downtown Chicago."

Digital Crossroads operator DX Hammond OpCo named telecommunications and data center industry veteran David Hood, former president and CEO of Backplane Integrated Networks Corp., as its managing director of operations, and its leadership team has been seeking customers for the past two months.

"We've had meetings with 20 different companies throughout the country," Dakich said. "It's been going very well."

The data center will be filled with rows and rows of computer servers that will be cooled with water and lake breezes from Lake Michigan. The cluster of computing power, which will employ a skeleton staff of technicians and security personnel, can be used for cloud storage, to support instant messaging and enable online video games, among a number of other internet activities.

"Our customers will put in the servers," Dakich said.

Demand for data centers has been exploding nationwide as Americans spent more time on their phones and social media, as well as on online activities like streaming, shopping and gaming. The rise of the Internet of Things — as more and more cars, appliances, speaker systems, lights, thermostats, security systems and devises become wired — is expected to propel the U.S. data center market to revenues of more than $69 billion nationwide by 2024, according to a study recently released by

The first building could have as few as four customers and as many as 20. Dakich, the brother of former Indiana University basketball standout and sports radio personality Dan Dakich, estimates it likely will end up serving about a dozen companies.

Once the first building of the Digital Crossroads data center is entirely leased out, construction should begin on the next phase. It could ultimately have 400,000 square foot and 40 megawatts of power.

"We're right on schedule," Dakich said. "I have to give a shout-out to the labor force. Randy Palmateer and Dewey Pearman have an unbelievable labor force here."

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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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The new Digital Crossroads data center is now open for business at the border of Hammond and Chicago on Lake Michigan. Construction was completed on the $40 million 105,000-square-foot building where national companies will store their data. Indianapolis attorney Tom Dakich and developer Peter Feldman built out the first phase of what could grow into a $200 million project.

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