Two Wisconsin Mayors Grapple With the Data Center Gold Rush

From Menomonie to Port Washington to Caledonia, tech companies have been eyeing Wisconsin towns and cities as sites for the next generation of artificial intelligence data centers – megastructures poised to drive the future of computing. While some mayors and community leaders welcomed the ventures, others have remained skeptical. Media Milwaukee interviewed two such leaders, one on each side of the issue.

Ted Neitzke IV has been the mayor of Port Washington since 2021. He is a former teacher and superintendent who describes himself as an environmentalist and conservationist. Beyond being mayor, Neitzke runs an education agency and was the president of the River Edge Nature Center for six years.

He is also an ardent supporter of the planned data center in Port Washington.

“We were actually in the running for a chip manufacturing plant a couple years ago,” Neitzke said. “We weren’t chosen, but it got us thinking about, you know, the economic viability of our city if we don’t grow.”

But reconciling the need for industry with Neitzke’s and his community’s affinity for preserving the environment narrowed their options.

“We don’t want to do heavy, light or medium manufacturing,” he said. “We don’t want pollution in the air. We don’t want heavy water users. We don’t want, we don’t want.”

Neitzke said Milwaukee 7, an organization aimed at economic development in seven counties in southeastern Wisconsin, recommended a project that met those requirements.

“And that’s where they were like, ‘well, data centers – modern data centers – don’t do any of those things.’”

Randy Knaack

Menomonie, Wisconsin, is in the far-flung northwestern region of the state, away from the usual data center traffic in the southeast. The city of almost 17,000 faced the same decision as many other communities: data center or no data center. 

Mayor Randy Knaack saw the proposition a bit differently and ultimately decided against a $1.6 billion data center, at least for the time being, after widespread community pushback. The company Balloonist LLC was the company jockeying for 320 acres for the project, but the operating company was never revealed.

“They give you a really good sales pitch,” Knaack said about the representatives from Balloonist. “It sounds really good on the surface, and then when you start digging into it, you find out that maybe it’s not as good as it sounds.”

Knaack’s decision to decline the data center did not mean he was shutting the door to all development.

“It’s not like we’re closing our door to industry or progression, I just don’t think a data center is conducive to our style of community at this point,” said Knaack.

Menomonie vs. Port Washington

The stark contrast between Neitzke and Knaack is perhaps best illustrated by the cities they represent. Port Washington, in every sense of the term, is a tourist town, while Menomonie is home to thriving industry and employers, including one of the nation’s largest 3M manufacturing plants and UW-Stout. Neitzke said his hometown’s survival is dependent on whether the city seeks new ways to develop at all.

“Our downtown is dying,” he said. “We have a beautiful downtown. We have business owners down there who can barely sustain on a tourist economy. The only thing we can do to support them is to grow.”

Neitzke said he feels obligated to make sure Port Washington’s economy doesn’t fade away.

“I have seen our city cycle back and forth between having a beautiful, vibrant downtown to having a ghost town,” he added. “I never want to be responsible for it being a ghost town again. And it became a ghost town when all the industry moved out, and Walmart moved in.” 

He said that a data center, which he christened a “giant computer warehouse,” will revitalize that vision.

“It will only increase our opportunity as a city to sustain and grow and be who we are.”

Knaack, on the other hand, would rather exercise the city’s option to pursue other, more beneficial business ventures. Coupled with his constituents’ concerns about the proposed data center, he remained unconflicted about his decision.

“If we were to fill that 320 acres up with other businesses, our economic benefits would way outweigh the data center,” said Knaack. “The general community, I think, is appreciative that I at least put a pause to listen to the community.”

Environmental Impact

Neitzke explained that the data center in Port Washington will be exceptional in minimizing its environmental impact. He said many of the residents’ concerns about hyperscale data centers stem from older, less eco-friendly projects.

“They’re comparing a 1965 Chevy Le Mans to a Tesla,” Neitzke said. “They’re very different operating systems.”

He added that the daily water usage of the Stargate center will be relatively low, at around 66 homes. He said claims that the project will consume exorbitant amounts of water, which has become one of many flashpoints in the community’s pushback, is misinformation.

“They have a closed-loop system, and that’s how they operate. So, they’re not using millions of gallons of water a day,” he said. “Every time you pull over and you stop your car, you don’t fill it back up with water, right?”

“We are hyper protective of Lake Michigan and Port Washington,” Neitzke added. “It’s what defines us, and we would never position ourselves to go and, you know, use a ton of water and waste it.”

Knaack was more skeptical about the environmental effects on the “prime farmland.”

“Start looking into, of course, energy use, water use, the return water, how we handle it, what kind of contaminants might be in return water,” said Knaack.

Prospects for the Future

While the data center proposition was shelved for now, Knaack didn’t rule it out entirely. But a necessary condition for plans to change is getting the community on board, which he doesn’t find likely.

“If the data center folks can sell it in a better way to the community and the community accepts it, it could possibly gain ground again,” said Knaack. “But I question whether or not the community – I think they’ve got a sour taste in their mouth. It would be a hard sell [to the] community at this point.”

Knaack approached the data center question with the concerns from his community freshly on his mind.

“I’m not really a politician, I’m a public servant, and I think what we need is more public servants and less politicians,” said Knaack. “If anybody wants to do the right thing for their community, they’ll listen and move in the direction that the mass number wants to go rather than making a decision without informing the community.”

As for Port Washington, the dye is already cast, and the city has signed a contract with Vantage. Neitzke said his community had little to say about it until after the fact. So, with no other path but forward, does Neitzke believe his constituents will come around to the project?

“My short answer is yes,” he said. “But I have watched over the course of my life where our community did not want us to build a recreational marina. I saw it divide our city. ‘No way, no way, no way.’ What defines us now?”

“If I were to foreshadow 10 years from now, people will say ‘well we’ve always had that out there,” Neitzke said. “And when they see the tax relief from the different components, they’ll be happy.”