- Microsoft has delayed construction of data centers in Licking County, Ohio, but local leaders hope the projects will eventually proceed.
- The company cited a need to evaluate the sites in line with its investment strategy, but remains committed to funding infrastructure improvements.
- While disappointed, local officials expressed understanding and emphasized the importance of Microsoft's commitment to infrastructure upgrades.
There was supposed to be construction equipment pouring into Heath, Hebron and New Albany later this year to begin building Microsoft data centers.
Replacing the tangible evidence of massive developments, however, are visions of future construction based on a hope and belief that Microsoft will only delay the work and not cancel the projects.
The hope comes from Microsoft's public announcement on Monday and private communications local leaders had with the company, but they acknowledge there are no guarantees what the future holds.
A company spokesman said: “After careful consideration, we will not be moving forward at this time with our plans to build data centers at the Licking County sites. We will continue to evaluate these sites in line with our investment strategy. We sincerely appreciate the leadership and partnership of Ohio government officials and the support of Licking County residents."
Microsoft planned to invest $1 billion in the construction of the data center campuses and also bought land in Pataskala. The land purchases in the four communities total $153 million for almost 1,000 acres. Microsoft still owns the land and said it remains committed to funding infrastructure improvements around its proposed data center locations.
Heath Mayor Mark Johns, Hebron Mayor Valerie Mockus, New Albany Mayor Sloan Spalding and Licking County Commissioner Tim Bubb said they believe the projects still have life.
"They reached out to me at the very end of March to let me know," Johns said. "Obviously, it was news that I didn't jump for joy at. I was not left with the impression they are permanently canceled."
Mockus said she had the same impression as Johns, but it still affects village planning.
“They indicated to us it’s delayed, but the wise thing to do is prepare for either,” Mockus said. “They have to follow whatever trajectory their technology is leading them to. I don't think any residents are upset there will be corn and soybeans there for a while."
In Heath, Microsoft purchased 227 acres on Thornwood Drive for $32 million. The company expected to break ground on the data center this year. It was expected to eventually employ 250 workers.
The company's commitment to spend at least $12 million to improve road and utility infrastructure around the Thornwood Drive site is as important as the data center itself. The city and company reached a written agreement stating what each expects of the other.
Microsoft said in its Monday statement that it will follow through with its development agreements for road and utility upgrades.
"Microsoft's commitment along the Thornwood corridor and areas near their site, I have every reason to believe they will (honor it)," Johns said. "I made it clear the city will be upholding its obligations under the infrastructure agreement, and I expect they'll do the same. I have no inkling they would do anything but that."
In July, the company paid $17 million for 223 acres on High Street in Hebron. Construction was expected to begin by the end of the year on a six-building data center on land west of State Route 79 and THK Manufacturing.
Hebron also expected financial assistance for roadway and utility work around the Microsoft land on High Street but did not yet have a written agreement.
“I’d like to get something in writing,” Mockus said. “That would have made me feel a little bit better. But we’ve developed a relationship with them, and I was looking forward to working with whomever it would be.”
In October, the city of New Albany signed off on plans from Microsoft to build a $420 million data center on Beech Road. That project was scheduled to start in July.
“The City of New Albany has been informed by Microsoft that it is revising its build schedule for the planned data center development within the New Albany International Business Park,” Spalding said. “We understand that large-scale projects like this require flexibility, and we appreciate Microsoft’s continued engagement with the city throughout this process.”
Bubb said Microsoft reached out to Grow Licking County, the county's community improvement corporation, to let it know about the delay in data center developments.
The reasons for Microsoft's decision could be varied, Bubb said, including the economy, its competitors, tariffs and the strain on the county's energy resources.
"It's really a confusing world right now," Bubb said, noting the Intel opening delay and Microsoft's delay in starting construction.
kmallett@newarkadvocate.com
740-973-4539
Twitter: @kmallett1958
