The Rochelle City Council on Monday voted unanimously to deny a development agreement with Midwest Power Investors for a proposed data center within city limits.

The 48-megawatt, 300,000-square-foot data center would have been located north of Steward Road, west of the BNSF railroad and south of Interstate 88.

The developer has owned the potential site since 2013, contacted the city in 2024 and has been working with it on the project since. If the development agreement was approved, the developer would have then worked to find a data center client to fit the project.

At its March 23 meeting, the council voted to table a vote on the development agreement, which would have seen city-owned Rochelle Municipal Utilities provide power, water, sewer and fiber services to a data center. The agreement also included language for the developer to pay for all $6.9 million in RMU electric, water and sewer infrastructure improvements, along with roadway improvements to Steward Road.

Along with 48 megawatts of power, RMU would have provided up to 50,000 gallons of water per day to the data center, along with fiber optic service. The developer would have posted surety bonds to make sure it pays for all required infrastructure improvements and power purchased to serve it.

City officials have said in the past that the data center would have brought 15 to 25 full-time jobs and that the project would also bring 500-800 temporary construction jobs.

The development agreement included language for potential second and third phases of the data center, which would see it expand to 100 megawatts and beyond 150 megawatts, respectively. Representatives from Midwest Power Developers withdrew their interest in future phases at the Monday meeting after concerns were raised by council members.

Each council member shared their thoughts on the proposed data center and development agreement Monday. Multiple council members said the 48-megawatt ask was too much, and said they’d consider a smaller-sized development. RMU’s largest electrical service customer is about 10 megawatts.

“I don’t think 48 megawatts is a project we need in this community,” City Council member Kate Shaw-Dickey said. “I think our responsibility is to say what number we’re comfortable with. There are some greater needs in our community. In order to do some of those things we need to make sure the power grid is able to support it.”

Rochelle is already home to three data centers. Two are owned by Allstate and Northern Trust and the third is owned by the city. Those data centers have been in Rochelle for 16 years and use a combined seven megawatts of electricity. DeKalb is home to a Meta (Facebook) data center, which is about six times the size of the proposed project in Rochelle.

“Let’s see if we can lower how many megawatts the developer is going to need from us,” City Council member Tom McDermott said. “We have three data centers now that have been up and running for 16 years. Has anyone heard of any negative impacts that we’ve had so far?”

Benefits of the development agreement for the city and RMU, detailed in the meeting’s agenda packet, would have included expanded infrastructure along Steward Road, additional revenue to RMU in excess of $1 million and the city’s utility tax fund of about $400,000 annually, and additional property tax revenue to local taxing bodies.

The data center would have been eligible for the state’s 50% property tax abatement for six years, as are other businesses located within the Lee-Ogle Enterprise Zone. The data center development would have paid between $5 million and $8 million in property taxes per year. After abatement, it would have increased to $10 million to $16 million per year.

The city held a public meeting on the topic of the proposed data center development Nov. 18. The city has seen social media reaction to news of it talking with a developer about a data center. A petition, titled “Reject plans for a data center in Rochelle, Illinois,” had 1,018 signatures as of April 28.

The meeting April 27 saw two residents, Ben Baar and Christian Bailey, speak against the proposed data center. Baar raised concerns that included the lack of jobs brought in by the data center and taxing the power grid. He asked the council to focus on different needs, such as housing and other economic growth.

Bailey works as a telecommunications electrician in the data center field and raised concerns about water use and noise.

“The developer does not live here,” Bailey said. “We do. This agreement is our leverage. Once it is signed, our leverage is gone.”

Zach La Motta and John Favia of Midwest Power Investors spoke in favor of the development agreement during the public comment portion. Favia spoke about the development’s property tax benefit to local schools and other taxing bodies and said it’s “on an appropriate site” and offered to address any concerns the council has, such as noise or water use.

La Motta said the project is on a “modest and manageable scale” that can be “easily absorbed” into Rochelle.

“This project is a tremendous opportunity for Rochelle, with significant benefit to the school system and great community,” La Motta said. “It does not prevent other development, nor does it compete with housing or business growth.”

If the first phase of the data center would have located in Rochelle, RMU electric would have had about 75 megawatts of power available remaining to serve additional customers.

Mayor John Bearrows cited concerns about future power grid strain and said Illinois is projecting a power capacity shortage in early 2029.

“We have to make the decision that’s right for our community’s future,” Bearrows said. “Every new project we consider must be weighed against the current financial burden and limited electricity availability. We must remember that we currently have limitations on our two transmission lines feeding our current distribution system. While we consider the revenue stream that seems to be the main topic, the positives are there. There’s no doubt. However, in my opinion, there are many unknown risks that have not been talked about. The largest of which is electric.”

RMU

The council unanimously approved four expenditures for Rochelle Municipal Utilities during the meeting. The first was for the purchase of four electric transformers from Wesco Distribution for $267,962. The purchase was made to replenish RMU transformer inventory.

The council also spent $38,730 on the repair of the pump and motor at Well 12 by Municipal Well and Pump. The pump at Well 12 saw equipment failure on March 31. Repairs were made and reinstallation started on April 22.

The RMU water department also saw $41,104 approved to repair its vactor truck, which had seen performance issues and was taken to Standard Equipment for repair of its fans.

Finally, the council approved the repair of an aeration blower at RMU’s wastewater treatment plant for $37,343 by Aerzen.

Parking lot

The council unanimously approved an engineering services agreement with Willett Hofmann & Associates not to exceed $36,700 for a new city parking lot on the northeast corner of North Main Street and West Fifth Avenue.

The city’s work on a partially grant-funded downtown improvement project is underway in the same area, which will see the city’s current lots off North Main Street reconstructed and the addition of new public restrooms, stage and storage structure. The new city parking lot will replace the spots filled by the structure.

Proclamations

Bearrows read two proclamations at the meeting. The first was in honor of Arbor Day on April 24. The second was in honor of Motorcycle Awareness Month in May.