Former Steelcase pyramid to become $5B data center

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GAINES TOWNSHIP, Mich. — After years of vacancy and a deal that didn't quite go through, it looks like a new chapter is about to start for the iconic 'Steelcase Pyramid' in Kent County.

State lawmakers are working hard to approve tax incentives that would give West Michigan the win in a race to secure a multi-billion dollar investment, with a company out of Nevada called Switch.

The data center is looking to build a $5 billion, 2 million square-foot SUPERNAP data center at the former Steelcase office building.

The deal is contingent on the passage of three bills currently in the Michigan legislature.

The $5 billionfigure reflects the costs for both the data centers and the computer servers that will be placed inside the buildings over a multi-year period, according to the company.  SUPERNAP Michigan will be the largest data center campus in the eastern U.S. and will serve Switch’s current and new clients.

FOX 17 spoke with James VanderMey Monday afternoon, the co-owner of Open Systems Technologies in Grand Rapids, who works to provide companies like Johnson Controls, Steelcase and NASA with data service centers much like 'Switch SUPERNAP'.

VanderMey says, not only will Switch create lots of jobs in West Michigan, it'll act as an incubator for other companies around the state.

"Switch SUPERNAP Data Centers are the best commercial data centers in the world. They're extraordinarily sophisticated, they have hundreds of patents, this is really the industry leading company,"  VanderMey said. "This is now a facility that will host companies like Ebay, Amazon, the internet scale companies of the world that's really an opportune to bring that to Grand Rapids."

Vandermey says a data center of this size attracts big name clientele and provides companies digital storage in need of Switch's cloud space.

"We see it as a positive because the kind of services Switch will provide to its customers are the kinds of services we can leverage to create new products for our clients," Vandermey said.

Switch says they have 1,000 clients, including eBay, Intel, Shutterfly, Amazon, HP, JP Morgan Chase, Google, Amazon, Fox Broadcasting and many more.

“We are excited to be working with Governor Snyder, the Michigan Legislature, the Michigan Economic Development Corporation and The Right Place, Inc. to bring Switch and its 1,000+ clients that make up the largest data center ecosystem in the world to Michigan,” said Executive Vice President of Strategy for Switch, Adam Kramer in a press release.

But according to Birgit Klohs, the President and CEO of The Right Place, it's not a done deal yet.

"Until this legislation is passed, there is no deal, nothing has been signed, no building has been sold, no contract has been signed, no one's been hired," she said.

Klohs says legislators need to act fast because West Michigan isn't the only place in the running for this build, as other states already have tax incentives in place to make it happen.

Lawmakers in West Michigan said the proposed bills for the tax breaks should start moving through Lansing by the end of the year.

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8 comments

  • Name Withheld

    Color me confused. Where are they going to get 1000 people to fill tech jobs when we can’t fill the tech jobs we have in the area now? I am in charge of one of the areas very large IT groups (over 500 IT employees), and I can tell you that I am having to hire telecommuters from other states, new college grads with no experience, people here on visas who speak no English whatsoever, and all manner of totally unqualified people to do the jobs I have here because there simply are not any quality programmers with any decent experience in the greater GR area who are looking for jobs. When the quality experienced IT worker in GR goes looking for a new position, they invariably leave the state because nobody here is willing to pay them what they can make out of state. We have an enormous tech worker vacuum here, and this is only going to make it worse. Until we are allowed to pay these professionals what they are worth, we will continue to see them leave. Whether it is 1000 new jobs, or 10,000 new jobs doesn’t matter. We are all facing the same situation in this industry in this state…when a senior programmer can make $120K in FL, $150K in NC, or $200K in CA, why would they stay in MI to make only $80K? The cost of living difference is not THAT great, it is not even close!

    The Right Place is really good at what they do, but I think that they only do half a job. They sell the West Michigan area to outside investors really well, but they don’t encourage the companies already here to to more to make themselves more attractive to the people who outside investors will need to be relying on if they locate here. Big companies like the one I work for need to be pressured to make themselves desireable places to work. If they don’t get that pressure from the business community, they won’t expend any effort in doing it. Our local development bodies need to step up and pressure our businesses to make West Michigan more attractive for the people who will be needed to work in the companies which relocate here. The #1 way you do that is through competitive salaries. And this area is radically behind the rest of the country in that area.

    There are 1000 new jobs coming to the area in a field where there are already not enough qualified workers. From a purely mathematical standpoint, the end result can not be job growth. There are more positions than can be filled already.

    • Michael S Hogan

      You may be correct regarding not enough qualified individuals in the area and those with qualifications leaving. I have not done the research. Simply based on what you are saying, your company needs to start paying a more competitive salary. And the pressure will not come from the existing community, but from this outside business who will bring with it new talent and attract talent from all over. And will have to pay to keep that talent. So your company who states that there are not enough IT skilled professionals will see these jobs be filled at a pay that they do not understand and it will be up to your company to take that pressure and increase salaries to keep the best talent.

      Also, an influx of workers will help to improve the local economy and be better off for us all.

      I will color you confused, but I think that the confusion is because you are looking for the local community to pressure your company and they are doing so by inviting in outside business and it should be you that brings this to your company to state that the game is on.

      • Name Still Withheld

        Oh believe me, I do everything in my power to pressure the powers that be to raise wages! We have projects failing left and right because we simply don’t have the disciplined coding talent needed to make these incredibly huge and complex programs work. Millions of dollars are being annually spent on these speculative projects that end up going nowhere simply because they are unwilling to free up an additional couple million to spend on staffing. I am at the point where I have to assign my talented programmers to tasks that are way beneath their level of expertise simply to do CYA on projects with federal regulations governing them. Other projects, the ones that are supposed to be making the company money, are then run by people who don’t even know what a project plan is, let alone how to create and follow one. So my company is being told what the problem is, and they have been given concrete examples for years.

        I think a large part of the problem is that they don’t understand the first thing about computers, so they fail to recognize that the modern IT professional is actually a professional in the same sense as a research scientist or physician. Computer programming is a white-collar, advanced science position. The old traditional stereotypes that you see on tv and in the movies were fairly accurate 30 years ago, but today the technology and the field has advanced so incredibly rapidly that the people who do IT have had to do the same. Switch is a great example. They run what is essentially the largest data warehouse in the world. It is full of sensitive data that must be kept both secure and accessible. The software running the data warehouse has to be able to make those distinctions accurately, at speed, and on a scale that is mind-boggling. That code has to be rock solid. Do you think they trust it to a cobbled-together, bargain-basement 3rd party software package like Informatica? Hell no! They hired the best programmers money could buy to write code specific to their needs. But in order to do that they had to do two things: They had to know what their needs were, and they had to trust their professional IT staff to tell them what those needs were. Where I work, some purchasing manager falls for the sales pitch of a 3rd party software vendor, talks his boss into buying it, and we end up being forced to use a tool that makes our job harder (and in some cases impossible). It makes me wonder if they tell their auto mechanics what tools to use as they are working on their car.

        Lest you think that it is just my employer, I can assure you that in attending conferences across the country I have found that it is not. It is happening in every state where the economy is doing poorly. The big businesses, big enough to weather down economies, are keeping wages as low as they can simply because there is no reason not to. They have financially captive communities in which to operate. So when I see a company like Switch coming in to the GR area, I have mixed feelings about it. Here is 1000 new jobs. Let’s assume half of them will be filled by current Switch employees being brought in. Most of the rest of them will be entry level, certainly. Even so, if they pay higher wages in order to get quality people, those people will have to come from somewhere. Nobody in Texas is sitting in their house thinking “Hey, Switch is opening up a datacenter in MI, let’s move up there so I can work for them!” People don’t look for work in a location unless they are already planning on moving there. So these new jobs are going to make the tech situation for the remaining companies in West Michigan even harder. And if they don’t offer higher wages, if they pay the same as everyone else around here, they won’t get the staff they need.

        So on one hand, while I like the thought of a company coming in here and paying people what they are actually worth, thus providing the pressure on the other IT businesses around to do likewise, it will at the same time further drain the talent pool in a lot of local major businesses that are already far too thin in that area. The key thing here is that in order to draw in new talent from other cities you need more than one big company coming in with good pay. You need the prevailing wage for these jobs to be higher. One company, even one as big as Switch, can not make that happen.