Lakefront data center won't crowd out Gary project

The Centier building in downtown Gary is pictured above. Developer Vance Kenney plans to turn the upper floors into a data center.

An Indianapolis developer hopes to start work this summer on a massive lakefront data center at the former State Line Generating Plant on the shoreline of Lake Michigan in Hammond. It would total at least 400,000 square feet and could expand to as much as 1 million square feet, potentially storing data for companies across the country.

But the proposed DataGryd Data Centers facility on the border of Hammond and Chicago, which could result in 100 jobs and as much as $200 million in investment, won't deter a similar but much smaller project in downtown Gary.

Hobart-based Gateway Partners has been redeveloping the old Gary State Bank building, now the Centier Building at Fifth Avenue and Broadway, for years. Developer Vance Kenney has hoped to fill most of the long-vacant upper floors of the 10-story bank tower with the "South Shore Technology Center," a data-storage facility that would target health care providers.

No matter how big the Hammond project is, there's room in Northwest Indiana for more than one data center that houses data for off-site companies, Kenney said. He's been looking to line up tenants in advance instead of taking a speculative "if you build it, they will come" approach.

"The Hammond project will have no affect on the data center we are developing. Our business and financing model is more conservative and ramps up based on demand by the users versus building and hoping they come," Kenney said. "This industry is driven by the ability to attract users who will make commitments to rent early before the facility is delivered, and that can be difficult at times."

With data centers, companies are like tenants in an office building who are just renting cabinet and rack space, Kenney said.

"The other component is the availability of both fiber optics and power in close proximity to the facility. Downtown Gary has all of the components in abundance," he said. "Lastly, the local market can support multiple data centers. Technology is driving us to create more data centers to store more data in the cloud. The growth of the industry is positive."

Los Angeles-based real estate firm CBRE Group estimates data center investment nationwide totaled more than a record $20 billion last year and continues to grow at a rapid pace, according to a market study.

Kenney said he might soon have an update on his downtown Gary project, which he's been pursuing for the last few years after renovating the building, adding a drive-through and bringing a Centier bank branch into the first floor.

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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.