A New Strategy for Economic Development: Data Centers 

• Data centers represent a transformative economic opportunity for Michigan, similar to the rise of the automotive industry, and missing out could leave the state behind. 

• In the short term, data centers drive construction spending and create thousands of jobs while increasing local property tax revenue. 

• Data centers create long‑term economic strength by attracting nearby tech growth, supporting critical sectors like health care, and driving population and workforce development for the future. 

• Michigan lacks the alignment and vision needed to attract data centers and must adopt a bipartisan approach to recognize and act on its economic potential. 

View the full session recording below.

During the 2026 Detroit Policy Conference, Ambassador John Rakolta Jr. led a conversation moderated by the Chamber’s Sandy K. Baruah to discuss the importance of data centers and why it’s a new strategy for economic development. 

“A data center is the most fantastic economic development opportunity in the last 150 years,” said Rakolta.

He compares Michigan’s embrace of the automotive industry 110 years ago to today’s data center revolution, emphasizing that data centers now represent a similar transformative opportunity. 

So what do data centers actually do? “They store massive amounts of digital information. They process it into useful applications and insights for all of us, especially AI. They distribute the information globally, and the facilities never stop upgrading,” Rakolta explained. 

But there are risks ahead. “If we miss out on this, Michigan will remain a backwater state for a very long time,” Rakolta warned. 

Rakolta compared the importance of data centers today to the vital infrastructure of the railroads in the 1800s, noting, “It’s not just the storage of the data itself; it’s the processing, the movement, and the adjacencies that come along.” 

According to Rakolta, Michigan has lost 50% of its manufacturing GDP since the 1970s, seen 170 plants close, and watched 400,000 manufacturing jobs disappear. Yet, as he noted, “we have this incredible opportunity to capture that economic opportunity coming back.” 

Speaking to the short-term economic opportunity data centers pose for the region, Rakolta said, “In the short-term, each megawatt of data center commands a construction-related cost of somewhere between six and eight million dollars per megawatt.”  

For example, Rakolta outlined the Saline project, a one-gigawatt (1,000 megawatt) facility with a construction value exceeding $7 billion. This project will employ more than 2,500 tradespeople, creating enormous economic activity in the region.  

Secondly, it’s important to recognize how data centers affect property taxes. Again referencing the Saline project, Rakolta said, “That site is 250 acres small. The current property taxes today are somewhere in the neighborhood of $150,000. When that facility is done, the property taxes will swell to $25 million. That’s $25 million that Saline Township doesn’t have today.” 

Speaking to data center’s long-term economic opportunity for the region, Rakolta said, “Tech companies locate within proximity to the data center. AI labs, startups, cloud providers, and financial services need low latency. The shorter the distance between the user and the data center itself is a very, very important item.”  

Regarding health care, Rakolta warned us that if Michigan does not build data centers, its health care institutions and research will have to rely on data processing from other nearby states like Indiana and Ohio, “who are, by the way, about three to four gigawatts ahead of us right now.”  

On a larger scale, Rakolta highlighted that Northern Virginia is the “brainchild” of data centers, noting that “70% of all the global internet traffic goes to Northern Virginia.”  

“Populations move to where the best jobs are. In addition, technology is where our children and their children are going to migrate to,” said Rakolta. “So this is another opportunity to keep, attract, train, and teach the next generation, and have this talented pipeline for companies like Google, Open AI, and Meta to come to our state and to help us grow into the 21st-century state that we should be.” 

Regarding whether Michigan has the proper economic development tools to continue to attract more data centers, Rakolta said, “Michigan has zero.” 

“I believe that, unfortunately, and I have mentioned this over and over again, it’s the same thing that we had on auto plants. We haven’t had a new auto plant built here in 40 years. Why?” 

“There is no cooperation amongst the power centers. Labor and management argue. Politicians argue. We haven’t solved the racial issue. Geographically, we’re not aligned.”  

Rakolta said that what companies look for is stability and forward thinking, “and as a state, we just don’t have it.”  

Providing a solution, Rakolta recommended Michigan adopt data centers using a bipartisan approach, similar to the one used when the  Growing Michigan Together Council was formed, and “we voted 19 to 1 to adopt 50-60 major recommendations.”  

“[Politicians] don’t see the advantage of these data centers. They don’t see the economic opportunity that they present. They don’t see how they can help our tax base. They don’t see the future for our children,” Rakolta said.