mic mic check
Good morning, the meeting of the committee on economic
capital and Technology development is called to ordered
when I have a roll call to establish Quorum. Please note
that your present.
Response will be deemed a yes vote when this quote calls
used as a as a reference vote for for later Mr. Venegas.
Please call the role.
chairman vas president
vice chair Mosley
Alderman Espada
Alderman Hall
Alderman Mitchell
Alderman Chico
alderwoman Lee
alderwoman Gutierrez
Alderman Lopez
alderwoman tatis
alderwoman Cruise
Alderman Cardona
Alderman W gets back
alderwoman mitts
it's a woman mitts know president by remote. Yep.
Alderman not the politano
alderman Reilly
Alderman Reilly
alderwoman Mana happened
We have a quorum.
Thank you. Ladies and gentlemen, we have a quorum
alderwoman mitts and Alderman Curtis have requested
participant in today's meeting remotely under rule 59. Can
I get a motion to allow them to participate remotely to uh,
Vice chair. Mosy motions to allow Alderman mitts and Curtis
to participate remotely all those in favor, please say I
any opposed
Continue to share the eyes have it. Both all the persons
are permitted to participate remotely. They will be marked
as president on today's Quorum call.
Thank you chairman.
Thank you.
Uh for today's meeting we have received, uh, several
written public comments. These written comments have been
shared with the ectd committee members via the 1 Drive Link
included in the public comments as a communication from the
Chicago Police Department supporting to substitute
ordinance on data centers that will soon be discussed at
this time. We will begin the public comment period public
comment is limited to 30 minutes out of respect for
everybody's time. Each speaker is limited to 3 minutes.
I've been informed that we have 5 speakers that have signed
up for public comment. We will need the applicable
provisions of the sergeant-at-arms protocol.
our first speaker will be
um
Caesar demoi Orden
That's a Caesar. Yeah, Cesar.
Oh, thank you.
um, our next speaker is um
Laura Goldberg
good morning, chairman and members of the committee. My
name is Laura Goldberg and I'm testifying on behalf of nrdc
the natural resources defense Council as its Midwest
Regional impact director. And our DC's mission is to
safeguard the Earth and while nrdc Works across the country
and internationally. We also have staff in an office right
here in Chicago. Um, and I am a city of Chicago residents
resident and have been for 12 years and live in the 35th
Ward.
Nrdc is concerned about an opposed ordinance 0202481, uh on
data centers and the substitute ordinance as well, which
would ensure a substantial amount of the city's data is
stored within Chicago city limits.
Before adding more data centers to Chicago greater study is
necessary to understand the full impact of these centers on
communities as written. This ordinance does not properly
account for the environmental health and Community impacts
of expanding these centers.
Data centers consume massive amounts of energy it is not
unusual for a single data center to consume as much energy
as 3 small cities. This huge increase in energy load has
not been planned for and it will lead to grid instability.
Data center should leverage and be accountable to the clean
energy transition to meet Chicago goals in comply with
State energy laws like fgen seizure.
Protections are needed to ensure the growth of the grid due
to Data Centers is green and clean and does not undermine
the historic progress we have made.
data centers in Chicago should also be required to
Benchmark track and Report their energy usage meet energy
star ashrae and other similar Energy Efficiency standards
and have a 100% of their energy usage come from renewable
sources.
Equally important data centers use a lot of water large
data centers can use up to 1 to 5 million gallons of water
a day data centers in Chicago should be required to track
and Report their water use and meet water efficiency
standards any infrastructure or system upgrades needed to
connect to Data Center to the city's water and sewer system
should be paid for by the data center. In addition water
usage by the data center should not exacerbate water on
affordability.
Any upgrade should not be allowed to be subsidized by rate
payers the city should ensure it understands the access
water capacity. It has and use existing infrastructure
whenever possible.
finally, we're deeply concerned about this ordinance and the
fact that it may increase the number of data centers placed
in communities already harmed by existing emissions and
other impacts from industry without proper safeguards these
These communities May face increased pollutions decrease
property values and other negative impacts data centers
should be required to conduct and share data from
cumulative impact analyses have Community benefit
agreements and any impact communities should be uh met with
we're not exacerbating negative effects in short. This
effects in short. This ordinance leaves many questions and
concerns on addressed. We urge the committee to hold this
ordinance. Thank you for your time. Thank you. Miss
Goldberg.
Our our next uh speaker is um Brad tits.
Good morning. Good morning members of the committee. My
name is Brad T VP government relations and strategy with
the Chicago land Chamber of Commerce. The chamber
represents over a thousand businesses of every size and
from every sector across Chicago land including all the
data center hyperscalers and many colocation data center
companies. It is on behalf of our diverse membership that
we urge the committee to oppose the data residents the data
residency orders before you today, the Chicago land region
in recent years has become a national and Global Hub for
data center growth, which has led to billions of dollars of
investment into our local communities significant property
tax revenues generated and thousands of Union construction
jobs put to work to construct and maintain these products.
Projects however, while Chicago has attracted several
significant data center projects to the city proper most
data center development in the region has occurred in the
Chicago suburbs as Chicago nears a precarious fiscal moment
as Federal pandemic funds expire along with many other cost
drivers. We have appreciated the sponsors desire to attract
new data center developments to Chicago as a way to grow
our tax base. We also agree that data centers are a
significant property tax generator compared to other
property types and most importantly we agree that data
center development represents an immense opportunity to
inject billions of dollars into Chicago's South and West
side. That is why the chamber and coordination with the
National Data data center Coalition provided the chair and
proponents a list of 8 policy recommendations from zoning
and permitting reforms incentives to support minority owned
data centers to end, uh incentives to diverse and diversify
and build the data center work force along with property
tax certainty ideas. That would actually generate data
center project interest in Chicago.
But instead the chair and 1 company, I'll repeat that 1
proponent company are proceeding with an ordinance that is
designed to support only 1 company while simultaneously
doing nothing to attract data centers to Chicago yet
imposing Antiquated procurement requirements on city
government agencies. We have asked the proponents
repeatedly how this ordinance will work in practice and
have yet to receive a straight answer their fact sheets
contradict the ordinance language and they continued to
State this has been tried elsewhere in the country for the
record. It has not for my organization the results could
simply mean no new projects coming to Chicago for Chicago
city government. The impact could be far more devastating
from threatening data.
Security and privacy to limiting Chicago's ability to take
advantage of new and Innovative Technologies from limiting
vendor choice to actually incentivizing Antiquated model of
data processing and storage the impact to the city's
operations is extremely concerning and unknowable as we
have no idea how many City vendors will elect to store all
of their data in Chicago and Illinois again, we urge you to
ask how this ordinance will work and practice and who the
ordinance will apply to good luck getting a straight
answer. There is a reason the Johnson administration had to
throw Hail Mary substitute ordinance yesterday simply to
make sure they could comply barely comply with the
ordinance despite remaining concerned with the overall
impact and the policy itself rather than imposing
burdensome harmful and unnecessary requirements on data
centers and Cloud providers. We urge you to oppose the
Antiquated data residency orders before you and encourage
the the sponsor and city council to work with us to enact
meaningful and proven ways to attract data center to
Chicago. Thank you for your time.
Thank you Mr. Tits.
Our next speaker is prior. Um before I do that. Let me
acknowledge. Uh, all the women lie Alderman Mitchell and um
alderwoman guitarist, uh, virtually,
All and also um all room and Crews.
Our next speaker is Iana Simba.
Uh, good morning chairman viegas and members of the
committee.
My name is Ayanna Simba and I'm testifying on behalf of the
Illinois Environmental Council as their City programs
director IEC. We've been around since 1975 and we represent
about 150 different environment organizations, including
many here in Chicago.
We are concerned about ordinance. So 2024 D 0008201 which
will require a substantial amount of the city's data to be
stored within the Chicago city limits as written. This
ordinance does not account for the environmental impacts of
expanding data centers within the city.
while we understand the time cost and Security benefits, we
believe this ordinance may have unintended a consequences
not just on the environment but communities that are
already overburdened with industrial facilities.
We do recognize that data centers are are necessary for
operation our digital world. But again, we must consciously
ensure their growth protects the grid our water resources
and Community Health.
data centers consume a massive amount of energy in order to
maintain cool temperatures for the computers in this 24/7
hour this 247 operation places a strand on our already
burdened electricity grid data centers should be required
to report energy usage and use Energy Efficiency measures
equally important data centers use a lot of water according
to the 2020 report by the US International Trade Commission
midsize data centers consume about 300,000 gallons of
water.
Water a day or as much as a thousand households. We suggest
requiring data centers to report water use in monitoring
water quality to discourage irresponsible water use
Additionally we are concerned that this ordinance may
increase the number of data centers placed in communities
already experiencing Urban heat island effect, and those
that are harmed by existing emissions from nearby industry.
This ordinance does not include insufficient protections
for communities that would house these data centers. And so
without proper safeguards these communities May face
increased pollution decreased property values and other
negative impacts on their quality of life.
In short this ordinance made leaves many questions and
concerns and addressed.
And without proper consultation, it could have far-reaching
consequences. We urge the chairman and the committee to
hold this ordinance and we ask the auditor and vas were
collaboratively with the environmental groups
community-based organizations and relevant stakeholders to
ensure that we are storing data in a way that is not
harmful to our environment and are already overburdened
neighbors. Thank you for your time.
Thank you, Miss Simba. Um, our next speaker is Mr. George,
Blakemore.
Right more the warming up the Earth climate pollution air
pollution ecology demand relation with his environment.
I didn't have the agenda, but I jotted down.
uh kept putting on this little piece of paper, uh data
share because you didn't have the agendas out here and
you're 30 minutes late.
30 minutes late you were supposed to start at 9:30. So
again, this is an ineffective, uh, a body here this
government.
so pollution
now most of the pollution have always been in the black
neighborhood. I always play the race card.
But Mr. George Blackmore plays the race car now will it
have a negative effect in in in the black communities? And
I'm part technology.
And 1 thing that I always remember when when we was
enslaved we did not embrace the new technology the white
European had the guns and the gunpowder not a superior
culture.
A history, but they had the new technology the gun and the
gun powder that us right where we are black people must
Embrace this new technology.
We must do it and we must but we the new technology should
not be dumped on the US what I heard something about water
so much water gonna be used for the uh, uh, uh new uh,
database the negative effect that the environment would
have on us. They always put the doodoo in the black
neighborhood and sir you right here you too. You too. The
you you getting paid by
The people to serve and when the public person come up to
speak you for the turnaround.
Don't care Mr. Blake Mark Mr. Blakemore, please speak into
the microphone.
Please speak into the microphone, sir.
Thank you.
What you think I'm a joke that that come to all these
needing and look how many people are here. 1 2 3 4. Uh, and
you you're late.
you didn't start on time and you're going to be so
disrespectful after I
how to treat up if they don't know how to so let me get
back to this topic again about this data base
Uh, we must in the black community make sure it has no
negative effect on our environment.
Thank you, Mr. Blackmore that concludes.
This the blackmoor thank you that concludes the public
comment portion of our meeting. Excuse me chairman. There's
1 more public speaker on Zoom Jim Keaggy who signed up. Oh
he is going to be a subject matter expert uh to answer any
questions. So should the uh members of the of the committee
have any technical questions. Thank you. Thank you. The
first order of business is approval of the June 2024
monthly report which all members of the committee should
have received are there any questions or comments, uh from
the committee members regarding the report?
Seeing none. May I have a motion to recommend approval of
the June? 2024 monthly report by the same roll call vote as
was applied to determine Quorum Alderman leppo moves here
in no objection. So ordered um items 1 through 3 on the
agenda are series of a reappoint. It's a very special
service areas. The following individuals are being
considered before the committee.
reappointment of Carlton F Daniel Mets as member of the
special service area number 18 North hosit commission
located in the 44th and 46 warts reappointment of Kirby Jay
kyzer. Also as a member of the special service area number
18 North hosted Commission reappointment of Duke miglin as
a member of special service area number 75 Oak Street
commission located in the 42nd Ward at this time Mark
Roshan the assistant commissioner with the Department of
planning and development is available to answer any
questions.
Of the ectd team has confirmed the support or non-objection
from the following council members to reappoint within
their respective impacted boards.
alderwoman clay
Alderman Lawson Alderman Reilly
at this time with any of the members of the committee or
council members like to make us uh statement or ask any
questions in the committee members.
Seeing none. May I have a motion to recommend approval of
the reappoint by the same roll call vote that was applied
to the terminal Quorum Vice chair Mosley. So moles hearing
no objections or ordered the new pass recommendation of the
array appointments will be reported out at the next city
council meeting.
Congratulations to the reappoint. We look forward to
working with them, uh and partnering them in their new in
their positions. Uh at this time. We are going out of the
regular order of our agenda to item number 12, which is an
ordinance calling for amendment of Municipal Code chapter,
2- 68, uh by adding a new section 2-6-6-2
City data to be processed stored transmitted and disposed of
of within the jurisdiction of the United States. We have a
substitute ordinance that members should have received
electronically and also have a card copy of this morning.
Can I have a motion to accept the substitute ordinance?
Vice chair mosy motion to accept the substitute hearing no
objection. So ordered the substitute ordinance has been
accepted.
um
as as as we uh, before we begin and hear from our CIO and
also from I'm sorry for our our um, Chief Information
Security Officer, uh, Bruce coughing, uh, and also from uh,
Jim Kay
Um, I'd like to make a statement. Uh
You know, we we and January of um early this year in
January. We had a subject matter hearing around data
centers, uh, and how we were looking at Loudoun County, uh
who saw their tax revenue, uh, increased 10-fold from 100
million dollars to 1 billion dollars. Um, and not to say
that our revenue is going to go from 100 million to 1
billion, uh, what we see this as the chamber stated as an
opportunity to increase Revenue separate and apart from the
traditional methods and levers that the city of Chicago has
traditionally followed which are property tax increases
fines fees and tips sweeps. So we think this is a new
Innovative way to create increase Revenue, um, which which
was not regressive but in a way to increase our tax base,
um something that folks, um in the business Community have
wanted. Um,
We have 37 billion dollars in unfunded pension liabilities.
Uh, we have arpa money that has run out, uh, just last
week. Um, there was a committee of subcommittee on Revenue,
um that hosted a meeting chaired by uh, chairman Hall, uh
to take a look at innovative ways to create revenue from
the city again separate and apart from the traditional
levers that the city of Chicago has had uh to to move to to
um to pull in order to create Revenue. Uh, I would also
mention that
Um increasing Revenue without impacting our taxpayers, uh,
and and burdening businesses with additional, uh taxes is
something that we should be looking at. I'm also a huge
proponent of making sure that within our technology, uh
spend that we're creating efficiencies. Uh, and that's why
uh, I'll be introducing a resolution at the next city
council meeting to ask the CIO to work with some of the
vendors that we have in place in order to realize and
challenge the vendors, uh, to create savings, uh through
the utilization and modernization of Technology from the
city of Chicago. We spent a ton of money. We spent a ton of
money utilizing technology, uh, and this data ordinance
this data residency ordinance is not a novel idea. Uh, it's
occurring in uh, Europe, uh, California, Connecticut, uh,
and it would be akin to requiring local residency hiring in
the in in your ward. If you have a project that's going on
you want to have people from your community participating
and so as we have data which is valuable, uh, and we're and
we're uh,
Send sending uh, our data to other parts of the of the
country. All we're saying is let's require a little bit of
that data to be stored here in the city of Chicago which in
turn creates a market so that way we can get new property
taxes, uh on the road, um in your packet, um, we heard
today from um, some folks from the environmental, uh, you
have a an environmental sustainability of data centers
both, um for in new construction and for existing, uh, and
I'll say that moderate moderate modern modern data centers,
uh built from the ground up use newer energy efficient and
sustainable Technologies based on lessons learned from 30
plus years of data center Technology Innovation data
centers are increasingly designed to be energy efficient
reducing overall energy consumption and integrating
available renewable energies resources. In fact, the city
of Chicago has a detailed department policy departmental
policy of sustainability through a point-based manual
strategy and requirements for new construction, uh data
centers have to to meet the 100 plus sustainability
standards outlined by the city.
Chicago for new construction data center, um Energy
Efficiency supporting sustainability affect designed to
earn energy star rating and plus n plus 1 design built to
tier 3 standards, uh, can can Source renewable energy
power, uh power sources through utility water usage
efficiency of of zero exceed storm water ordinance by 25%
achieving points for types of landscape and tree planting
Water use reduction by 25% Bike Share sponsorship. Um, so
there's there's a a lot of things that take into
consideration, uh around sustainability, uh with data
centers. Um,
So again, this is this is a a an idea where I think it
allows the city of Chicago to create a market. Uh, what
we've seen is that data centers are built built being built
all around the city of Chicago and yet um, the hyperscalers
are not building in the city. Um, I sent a letter to the
uh, General Assembly, uh to help uh deal with the issues of
bipa. Um, and um, and as as as as a result of that our
letter was incorporated, uh, and the sponsors, um, made
some changes along with uh, the chamber and other data
center folks that were advocating. Uh, I I will also um,
Um say that uh, when it comes to creating new Revenue ideas
without pulling the traditional levers, this is an option
that we're looking at. Um, the other thing I'll say is that
this is an opportunity to uh, again draw people into the
city of Chicago and and have our data which is our data
which is valuable um and take advantage of it. And so
that's what we've done. We've had a hearing in January. Uh,
we we worked closely with the administration. They did have
some concerns around the original ordinance. And for those
of you that that know me, uh, I'm I'm always willing to to
try to find a way to get to compromise and as a result, we
had multiple discussions. Um, and and what you see now is a
collaboration between the committee and the um, uh, and the
uh, and the mayor's office. Um, I would also add that um in
in meeting with some of the um organizations, um, the the
Chicago land chamber did in the data center Coalition did
put forward several recommendations around development.
And I can tell you that um, we'll be looking at trying to
figure out way to codify some of these things in talking
with the data center, uh Coalition. They had mentioned that
in some other areas in this in the country that they've
been able to go from uh permits to Commission in 10 months.
Uh, and and that's music to our ears because we all want to
see development done in a quick fashion. And so, um, I have
committed to the chamber in working closely with them and
the hyperscalers to put forward. Um, uh and codify
Um recommendations on how to get development of data centers
done quickly. So that's where we're at right now. Um, we
have uh, 2 2, uh speakers here. We have Bruce Bruce
coughing. Uh, who's the deputy? Uh, I'm sorry the Chief
Information officer, uh, he can talk a little bit about the
uh, The Substitute ordinance Bruce
Thank you. Good morning. My name is Bruce coughing. I'm the
Chief Information Security Officer for the city of Chicago.
Chairman vas members of the committee we think chairman vas
for working with us on this ordinance and his leadership on
important issues like MBE opportunities and innovative
ideas for better technology.
We think chairman vagus for adopting our suggestions for
changes as this ordinance has progressed.
We think share vagus for pledging to work with us on
adjustments and
future changes as we work to implement, uh the legislation
We look forward to continuing to work to increase MBE
participation with Chicago's technology spending DTI is
seeking to grow minority owned technology company
opportunities by hosting networking sessions with these
companies to learn more about DTI future plans and seeking
to award smaller projects in order to grow capability and
capacity to help these organizations grow.
We think that building Chicago's technology Workforce is key
key to Tech equity and opportunity as technologists who use
data centers access them remotely.
We still have some concerns that we will work to address in
future ordinances while we have worked through scenarios
exercises to understand the implications of this ordinance.
We will not fully understand the effect of the ordinance
will have on operations until we have more time to study it
and prepare for implementation.
We will continue to study it as it takes time, especially
with each new version of the amendment.
Chicago does not have the same tax structure as other
jurisdictions that have seen substantial revenue from data
centers and increase in a data Center's property tax.
Is 1 of the only ways Chicago stands to gain which will not
produce the revenue stream seeing in some other locales
such as the example in Virginia.
Data centers create minimal permanent local jobs as most
technicians and customers interact with data centers
remotely.
Storing data exclusively within Chicago boundaries is
counter to best practices for both security and performance
such a practice puts operations in a single point of
failure such as a disaster weather event electrical outage
or connectivity issues. Chicago has seen these types of
events in the past, which is why we store data in multiple
places as a best practice.
software as a service providers which is much of modern
technology build their products at scale for all their
customers and store data across the country. We will have
to incur extra expense Andor limit our choices when it
comes to Technologies. We buy as we implement the
ordinance.
Using modern it practices. We rarely procure data storage
on its own as its own procurement data storage is combined
with SAS or software as a service products offered by
companies that could not cost effectively architect their
services in a way that restricts data locally.
Implementation of the ordinance has the potential to
require a significant time and resources for the
Department.
As I mentioned earlier, we do greatly appreciate the
partnership in working through the ordinance to date and we
look forward to continuing to work together to make sure
that this is in the best position for the city of Chicago.
Thank you.
Thank you, uh Bruce for your testimony. Um
I'd like to welcome our expert witness on this issue Mr.
Jim kagi was founding and managing director of Omega P Mr.
K. You will speak on the ordinance and is available to
answer any questions from the members Jim.
Hey chairman, uh and thank you for inviting me to speak
here. My name is Jim kaggy. I was um, uh, I've been in in
working in the hyperscale, uh, data compute and storage, uh
industry for over 25 years my background. Um, I actually
started out as a US Army Officer, um shortly after 911
after spending over a decade in the Army. Uh, I had the
opportunity to join Amazon web services the largest
hyperscale cloud provider in 2013, and as a a subject
matter expert in cyber security, uh, data security and
implementing, uh, highly regulated, uh, constructs for
financial services governments and uh other uh customers
that that have certain security reg regulatory, um needs
around their data, uh, starting in 2013 Amazon web services
began providing classified, uh,
Cloud Computing Services to the US federal government
including the US intelligence Community. Um and the
Department of Defense and in that role there, um, we worked
really closely, uh with the US government and with
Regulators on uh, and and policy, uh makers such as nist on
putting together data security standards that made sense
for some of the government's most sensitive data. Um, for
example the dod Cloud security requirements guide,
I was a key contributor to to that document and I also
co-authored the department of defense's cloud security, um
architecture requirements, uh policies, um with the defense
Information Systems agency.
um
You know, I I think 1 of the most important things so I've
been you know, I was at Amazon for about a decade. I I left
about a year ago and in my role at Amazon, um, I was uh
managing director that uh, uh participated in the um,
expansion and growth of our data center operations
globally, um, my team personally, uh, um, invested over 150
million dollars of capital expenditures and local
communities across, uh, the United States, um, because as
the you know, as a mobile devices, uh, flourished and as
more more more cities to States and governments and really
the whole book in 50 subtle adopting cloud services and
technology that it became more and more important that uh,
that data data was uh from a from a latency perspective
Network latency perspective was available in close to local
communities. It improves the services, um that you
experience on your
Your mobile devices, it improves things like internet of
things and City sensing, uh type devices. Um, there's a
whole bunch of advantages by having data available locally,
um in in regards to the ordinance, um,
You know, I've been Consulting with uh with the all the
hypers scales and scalars over the last couple years since
I left Amazon working on things with the Regulatory and
privacy needs, uh in Europe, um, working with local um, and
and state government officials across the United States on
how to um get more value out of their data right is
generative AI, you know, so you see with chat GPT has kind
of shown the whole world that the data such as the city the
data the city has is a valuable, um resource it's something
that um that every every uh, uh government and every every
corporation um is is understanding that with you know, new
machine learning and open Ai and all these other types of
generative AI algorithms that um that data is now a
commodity that is that is valuable. Um, and and so when you
look at an ordinance like what what is being presented
here?
I I think there's a few things where clar clarifying, um,
you know, some of the concerns brought up where I previous
speakers 1 this ordinance number 1 it what it requires is
that city data is stored within the United States. You
know, I think this is uh, um something that's super
important from a cyber security, uh perspective, you know
right now today, um there without any existing regulation
ordinance or law. Um, it's actually possible for city of
Chicago data to be possibly stored. Um outside of the
United States. This ordinance is actually brings the City
to Chicago in line with what the US federal government, um
has required for over a decade. Now the US Federal
government's fat ramp policies, um for federal, uh, data,
uh, you know, everything from uh, Homeland Security to
Health and Human Services Medicare Medicaid, um, you name
it if it's a federal program. It's been a requirement at
the federal level for us.
State government agencies to uh store their data within the
boundaries of the United States since 2013 at this point.
Um, and so that's that's number 1 this ordinance is not
100% requiring, um all data to be stored within the city of
Chicago. But what it does do is incentivize folks to uh
companies to store their data within the city boundaries
and so beyond, you know Point 1, which is you know, there's
a huge cyber security benefit the story in the data, uh
within the United States, you know, the economic incentive
here raised similar to the benefits we've seen allowed in
County, Virginia and Columbus, Ohio, uh, San Antonio,
Baltimore and Maryland, uh, the state of Oregon. Um, you
know, these are all communities that North North Carolina,
in fact Apple, um, apple apple invested over, uh, a billion
dollars of capital expenditure and investment in in North
Carolina, um Google invested in
Missouri and Alabama and Georgia these Investments by the
hyperscalers, uh, you know amount to tens of billions of
dollars of capital investment and improvements and
By incentivizing expanded data center, um participation
within the city boundaries, uh, you you're essentially
increasing a couple things your property tax revenue, uh
sales tax revenue on the Computing equipment inside of the
data centers, and also, you know, you know as I was saying
alluding to earlier your your data is is even more valuable
now with Denver of AI that was um, even just a few years
ago and by incentivizing folks to uh store the data here
locally in the city, you know, you're also encouraging new
Innovative Technologies and companies to come to Chicago to
invest right in the technology sector in Chicago. Um, and
and uh, and and I think like we we have seen a lot in
County, right we've seen in these other locations. I named,
you know, there's potentially tens of millions of dollars,
uh, not just tax revenue, but then also the uh,
you know the job creation opportunities, um, and you know,
I I think it was mentioned earlier that yes data centers
themselves, right the the actual internal workings of the
data center. Um, you know, that that is not necessarily
where the job creation comes from. But what it does comp
job creation does come from is construction, right, uh
comes from the support again maintaining and operating, uh,
the HVAC systems the the cooling and the Water Systems, um
and and expanding
Um, obviously an expanding Tech Innovation Innovation sector
high and paying jobs is always a positive benefit for any
other City lastly. I just wanted to comment on the
environmental concerns raised, um, you know in the last
decade in Amazon, we we uh spent uh, probably close to a
half billion dollars of of research and development funding
in, you know, making our data centers, uh, operate more
efficiently, you know, there's a benefit not only to the
local communities to do that. There's also a little benefit
obviously to Amazon Google and Microsoft and Oracle and
others to um, you know to from an environmental perspective
to maintain the data centers and the power efficient, uh
manner to lower the harm and damage, you know, cause to um,
you know, the community and you know, I I know water
discharge issues have been brought up with several times
here 1 of the key Investments that that the hyperscalers
are made over the last 5 years in Data Center Technology
improved
improvements is an advanced cooling Technologies heat reuse
and water water treatment. In fact, the vast majority of
data centers that are built in the United States today.
They work on closed loop systems. In other words water is
uh brought in to uh, external water tanks. And this is gray
water. This is not fresh water. In other words. The water
is not taking out of any local, uh, water treatment plant
or water system in the mun from a municipal.
Perspective it's actually brought in um reused uh, within
the data center and instead of being discharged back into
the community. It's actually retained recycled and then uh
used to to to cool, um, you know the equipment and then
from a heat reuse perspective as as you would imagine a
data center generates a ton of heat and thermal energy. Uh,
What mo most modern Data Centers do today is recycle, um,
the thermal energy, uh from that discharge and then uh, uh,
and then use that uh again to continue to maintain and
operate the data centers. So yeah, I think you you'll
you'll see with
uh, you know, the the types of Investments the hyperscale
is made and like I said earlier, I'll just kind of close
out. Um, they they've uh, literally invested, uh tens of
billions of dollars in art research and development and
capital expense or in the United States over the last 10
years. And I think um, you know as we've seen the benefits
brought to other companies bring that into Chicago is gonna
um, and the law term is is going to generate a substantial
amount of of Revenue and of improved the lives of the
community of people in the community that are bringing in,
you know, this, uh, expanding the tech sector and and
creating more jobs. Thank you chairman. Thank you. Thank
you Jim. Um, I have any questions for the members.
aluminum SP followed by
Yes, thank you Terry. I just want to make I appreciate
everyone who gave public comment today number 1. I I want
to make sure I'm operating off of all the information that
I can and I got to admit some of the the testimony that we
heard really gave me pause on this miss Mr. Heath correct
with Department of Law.
Gentlemen, I'm sorry your name again. Just a coffee. Sorry,
Mr. Coffee, Mr. Coffee. Yes, apologies. Yeah.
You when you were speaking you talked about?
I I feel like you spoke to some of what's in front of us
particularly. We're talking about this from a revenue
perspective. You said the main Revenue benefit that we
would see would be through increased property taxes. Is
that accurate?
Based on the research that we've done so far and the my the
understanding of the current tax structure that's in place.
That's our understanding.
okay, okay, because
Correct. So chair maybe you can get into this for us
because I can imagine if if we had a municipal income tax
we would see benefit there if we had a sales tax that
covered Services we could see benefits there. We don't have
either of those. So is the idea that to gain revenue.
We we increase the levy to account for the data centers.
Can you talk more about the revenue? So so we're talking
about um
Realizing property tax revenue we're talking about the
creation of data centers. So as the property is actually
being constructed and um being utilized there's there's an
assessment property tax that's associated with it. So we're
talking about new property and ultimately comes back down.
So the idea is then that we raise our Levy to account for
this the we we have to do that anyway for new property to
get new property on the tax, like once a building is built.
We have to we have to allow for that property tax to be uh
for us to appropriate that and tax it so what we're saying
is this is new construction. This is new construction that
we're going to be recognizing in our budget. And so we're
trying to increase the tax base instead of going to the
traditional levers that we've had the pool, uh around
property tax increases, uh finds feet. Go ahead. Okay,
All right. So I I I understand where you're talking about.
Yeah, the Mr. Coffee the other thing you mentioned was.
Because I didn't know this before coming in today and it's
information that matters to me is whether we're operating
off of governmental best practices.
You said in your testimony that what we are what is in
front of us is counter to best practices related to data
storage. Can you?
Either elaborate or repeat that testimony.
certainly
so, um the 1 point that I I do want to call out so that the
first part of the ordinance the The Substitute ordinance
that uh calls for um data to be stored within the
jurisdiction of the United States that has been a part of
um City it policy or some time and we um,
Enforce that through um, our procurement process. So, um,
that is a best practice that's already in place and I
believe the the gentleman that uh, spoke, uh via Zoom was
calling that out as well. So that is something that is in
place, um, and certainly uh, having that in an ordinance
certainly provides additional um structure for that so that
that is good. Um,
The the comment that was made, let me see because my my
obviously my remarks were prepared. Um,
that um
Solutions today are are you know many of the solutions that
we acquire are software as a service or SAS applications.
And so we're acquiring those um through companies that are
already have. Um,
uh, their data center footprint optimized for all of their
customers and um, it's on the part where there's incentive
that starts to um tilt the table to solutions that are um
hosted in Chicago which you know on the surface, you know
more business for Chicago is good, but it also puts us in a
position where um, some of the SAS Solutions may not that
the best SAS Solutions may not uh, maybe challenge in terms
of um that
That that requirement so the notion is that we would amend
our current procurement process and separate out how we're
Contracting data storage to
account for this
Ordinance well there so there's 2 things right there and
and that's part of what we're talking about is that there's
still work to be done to understand how we would Implement
kind of, you know, take this from the paper and
operationalize it and so that's those are the scenarios
that we have not yet. Um fully worked through to understand
what would be the impacts, you know, certainly, you know
procurements that are solely storage focused. You know,
those would be more cut and dried. Um for where storage is
incorporated into a broader Solution, that's more of the
scenario planning that we have to work through as we
operationalize the finalized ordinance.
Okay, I appreciate that. I I had 1 more question. Um, this
is a dpd related question because it's related to the
sustainable development policy. I'm I'm glad that this was
the the data center that we're referencing here.
Appears to have been a plan development perhaps someone can
confirm that and did abide by the sustainable development
policy. I'm curious because a couple people gave testimony
related to Indoor Water use
they say under their abiding by the sustainable development
policy that they're going to reduce their Indoor Water use
by 25% Can anyone speak to what that looks like where data
centers are concerned?
Jim do you want to
respond to that
Yeah, most my the vast majority of modern data center
builds right now have very large water tanks, um external
either on the rooftop or right right next to the facility
water is brought into the tanks and then recycled
throughout the facility so that I you know from a reference
of a 25 percent reduction that typically refers to um, uh,
you know, the need to tap into any type of vocal freshwater
or any other type of local water treatment or water influx
from external to the facility imagine, you know, kind of
like a big
Water tank literally rolling up to the data center and you
know much like a fuel tank. Right but a water tank, it's
come come uh, uh, a water tanker essentially comes fills up
the water, uh Reservoir with with gray water, um from
another source outside of the city and then that's that
water is constantly cycle through the data center. It's
it's cooled it it is used to water cool, um, the a few
infrastructure and the power distribution units and then
recycled back into um other water reservoir tanks.
Is this is this dpd is understanding as well on how they
they'll meet the aspect of the sustainable development
policy.
How to put you on this. I know this isn't quite your value
with Tim. But uh, yeah Tim Jeffries managing Deputy
Commissioner. I I don't think anyone here from dpd can can
speak to this but um, I can have um our sustainability
group look at it and get your answer.
Okay.
Those are all my questions for now. I
I have to admit like chair like the
usually the more I learn about an ordinance the more I want
that to get me closer to a yes. I feel like my concerns
have grown throughout the course of this meeting. I'll be
curious to hear any questions about by the rest of my
colleagues, but I appreciate the conversation. We're having
I appreciate that and and we'll we'll get that response to
the chair for you. Okay for the standard. Um, Ottawa Manor
Lee then Cruise
Thank you chair.
I appreciate all of the work that you've done since the
hearing. I I do have a couple questions and I'm jumping
around.
Can I get through the chair who's a part of the data center
Coalition that you mentioned?
That's different from subcommittee or yeah data.
Yeah, we we'll provide you the the information on that.
so
this is hard for me to understand.
but I I just want to make sure that I have it right so a
data center is going to take everything that we're
storing in
Our public um data, right? Um
and
keep it here closer to us so that we can generate more.
Revenue for the city through tax through the incentive. Um
And and I'm trying to think of it through um, my
perspective as the 48th Ward where we're very Consolidated
and we don't have a lot of land to to develop but say that
we did. Um,
And I imagine that we would need acres of land. Is that
right?
Well, I mean it.
There are different models that are being utilized. Uh,
there are vertical, uh data centers as well.
Jim do you want to talk about any specific examples that
are are going going throughout the country as it relates to
uh, whether there are vertical.
Yeah, so when you think about a hyperscale cloud provider
like in Amazon the horrible, um Google they have different
models of data center builds. They have the very large, you
know ones which could you know prop potentially go for data
centers across multiple Acres. They also have smaller what
they call local zones and the local zone is where you have
a smaller footprint maybe a 40 so think about 40 racks at
computers so of servers about 40 to 100 racks and and they
can be put into a data center that um are building
essentially that
A data center that has multiple floors. For example in New
York City, uh, Google owns the port author the Old Port
Authority building in uh on 14th Street and that is
actually a 12 story data center facility. Um, but the
actual you know footprint of it right imagine in New York
City, you know typical New York City building. It's it's
actually rather small as far as the footprint goes. That's
that's really helpful to know that that's a possibility.
So, um, what I'm I appreciate about Metro edges design is
that it's uh lead certified, right? Um, and that um,
And that it's energy efficient and and all those standards
are there. I'm trying to think of I'm trying to imagine it
in a 48 Ward. Um, and also is that something that is
standard for all of the data centers, that could be built.
yeah, um, I'll I'll I'll comment and I'll allow Jim to look
at Best Practices across the country, but I I think um,
it's it's our responsibility to to hold developers, uh
accountable for making sure that they're using sustainable
best practices. Is that is that a is that in this ordinance
though? Well dpd already has a plan around new
construction. I read um,
Some of the the requirements for new construction for data
centers Energy Efficiency. There's a list of items that are
required so dpd already has a checklist on on data centers.
okay, and then I
I heard a comment earlier about um the possibility of
um
Lowering actually the um the property values because of
data centers being built in neighborhoods. Actually. I
don't know how my neighborhood would react. If for instance
I propose that the CTA land that's being used as a staging
area for the RPM is um could be a great data center versus
affordable housing. Um, I think actually they they
they they would say the data center might not bring um more
property value to to the neighborhood. So can you speak a
little bit on that? Because actually I like my ward would
not be a great Ward to build a data center because it's so
consolidated.
Yeah, so I I think that
when we're talking about increasing property Tech, uh
receiving a new additional property tax revenue, we're
talking about land that currently is being not developed,
uh, or maybe Conte contaminated and he's being encapsulated
in order to build data centers. So we're not talking about
um areas where there's a lot of potentially a lot of
density like in your ward where it's it's it's a pretty
dense Ward we're talking
More where there's a lot more available land or maybe
there's some industrial areas that are just not being
utilized and there may not be any type of manufacturing
coming back taking a look at at those types of scenarios.
So this is more of a this is a city-wide strategy on how to
create revenue for the city. Um, so it would if if your
ward or anyone's Ward had available available land and and
your community decided that as you proposed this type of
development, they were in favor of then then they would
move forward with it. But there's a lot of available land,
uh throughout the city. So just a matter of making sure
that it fits
I think um
Yeah, it'd be interested in hearing what other Alders who
have more land that could be developed. If this is
something that they and at the same time we have to figure
out creative ways to increase, uh Revenue in the city. So I
pre again. I appreciate this.
This ordinance being put forward. I I am mostly concerned
about the number of calls and the texts and the emails that
I've been getting from. Um environmental groups. It's 1 of
the um biggest concerns in the 48th Ward is how we're
addressing and implementing our climate our Citywide
climate action plan and everything that we do um, and so I
would
I would actually like to hold this in committee so that we
could have more conversations with the commissioner of our
environmental, um office.
um to talk about how we can
How we can do this in a responsible way?
Well, I would I would argue that. Um, well, I'll take up
your matter 1 second. But I like to comment saying that uh
dpd already has a uh has a sustainability plan as relates
to new development and they've Incorporated, um issues that
have been vetted by sustainability officer. Uh, and I'm
sure they work hand and glove when talking about
development. Um, so I'm sure that uh dpd has been working
closely in putting forward their uh, their requirements for
new data centers. Um, but again, you've you've made a
request of holding it. Um, I will
I guess take a take a vote on that if you like.
I would I would love to do that. Um, but I know that others
have questions so I would love to hear those questions as
well because we're we're here to to learn more about this.
Um, and
I think at the end of the day, we all want the same things,
but also it's important for us to coordinate.
And and also think about sustainability and our climate
action plan and how it's it's being addressed in this or
ordinance. Yeah, and and and and then I would say I would I
would uh, just mention that dpd has a sustainability plan,
uh that I'm sure they work closely with the sustainability
officer in the city of Chicago in order to draft that since
dpd's role is about development. And so the sustainability
is offers about making sure that the climate plan is, uh
part of any type of development. So I'm sure those
discussions took place but
Yeah.
Hold on a second, uh Alderman on the spot.
Alderman Daniels by the first word, uh point of
clarification on the sustainable development policy. Just
so colleagues are aware that plan that policy is currently
undergoing revision, uh through the plan commission. So
we're in the process of revising how that policy operates.
Um, it should actually be have a new um, whole segmentation
of points by the end of the year. So that's something to
keep an eye on. Um, also as we've talked about in Council
really over the last few years.
That policy applies on an individual by individual
development by development basis rather than the the
cumulative impact that I think some of our neighbors are
reaching out to us. So just a point of clarification. Thank
you for that. Thank you.
worth
yeah, I again I I would just be interested in knowing um,
because I know that you've been working very hard with uh,
with many agencies for instance, um CPS and the CPD, um
even housing um, and I appreciate all that but for I've not
been in those conversations and I just want to be able to
understand what we're doing so that I could explain it to
my constituents who are very concerned about. Um, how the
city is moving forward in implementing a climate action
plan that benefits everybody no matter where you live.
Thank you.
Um, I would I would love to hear the other questions that
um, my colleagues have okay. Thank you, uh almond Lee
follow almond Cruise.
Thank you chairman. Um and I'll I'll Echo the the
appreciation, um for the work that's been done on this
ordinance, um and the language and the substitute. Can you
I'm all for generating more revenue for the city. I think
we all know that that's something that is needed. Um and
and not just here and there like across the board. Um, just
the nuts and bolts of the of what the ordinance says. Can
you just explain that at a high level like in your own
words? Yeah. So what I'm going to do is allow the uh, uh
Bruce coughing the CIO, um to explain that and then Jim
what time in as well? Okay Bruce. Thank you.
Sure, good morning Bruce coughing Chief Information Security
Officer. So the current substitute ordinance calls for
Essentially 2 things first of all, uh city data must be
stored in the United States 100% in support of that. Um, as
I I mentioned we have um it policy uh to that extent and we
have for the time that I've been here, um from a cyber
security perspective. We have sought to keep to to to
enforce that, um with the with city data,
the other part of the ordinance, uh gets a bit outside of
my wheelhouse, but it's around procurement and it's
providing. My understanding is it's providing an incentive,
um for bidders to uh for their proposal to
host
city data in
locations that reside within the boundaries of um, the city
of Chicago and I'm not sure if somebody here from procure
if somebody's here from procurement that can kind of speak
to the nuts and bolts of that, but that's my understanding.
So just to be clear and thank you for that. So it's it's 2
things and I'm I'm all for the city data in the United
States. Um, I'm curious as to how we enforce that as well.
Um, and the second Point, um, is that from a procurement
perspective this creates an incentive 6% for data the city
data to be housed in Illinois 8% if it's housed within City
Limits, um,
and this applies to so
it's sounds optional.
The way that it's written, is that correct? Well, and and
and that language came from the chief procurement officer
because they wanted to have some flexibility the similar to
when we do a construction project that we put these goals
on there as long as they're demonstrating good faith
efforts. We we have to allow for that to take to take be
taken into consideration. So that language uh came from the
cheaper current officer because they wanted that
flexibility to make sure that we wouldn't putting ourselves
in a position that that uh, if that 6 or 8% wasn't being
met as long as there's an opportunity to explain why it's
not being met now because we're trying to we're trying to
build this this operate this Market of having local, uh
data centers.
So the 6 or 8%
Credit, um is about the the the base sort of cost of the
contract. It's not actually 6% of data or 8% of data.
It's a a bit incentive. It's a bit incentive. So there's a
okay. Um, so that actually doesn't have anything to do with
the amount of data. Um, okay have other questions. Um,
Can someone talk to me about what the industry standards
are for uh redundancies for data security?
Yeah, I have uh Bruce from the city and then also Jim,
okay, uh speak about best practices across the country.
Thank you. Sure. We're we're happy to provide that back
through the chair.
For Best Practices around data security. I mean can so. Can
you just talk about what data security looks like today?
Like I don't know where our data is today. And I think
that's part of what's been missing for me is this
understanding the size and scope of what this actually
impacts. So, can you give me some sense of you know, how do
we handle? Uh what this data security look like today.
Where is our data housed today?
Sure, I mean and I know it's all over the place for
different. So take 1 department for me as an example. You
don't have to run through everything sure and and uh Bruce
coughing and Chief Information Security Officer. Yeah. It's
not even so much by department, but generally speaking so,
um, you've got
Kind of I I look at things in buckets. So you've got things
that we host ourselves. So we have um data centers that the
city has 2 Data Centers that we host ourselves. They're
within the city limit. That's that's where we host. Um
applications and data that are on-prem.
Uh, we also have uh,
Cloud solutions that we employ so, you know, I think um AWS
Azure, which is Microsoft. Um and uh Google Cloud so the
the 3 primary providers as well as Oracle, so they have um,
Cloud data centers that we leverage as well then kind of
the third bucket that I put things in to our software as a
service applications or SAS applications as I mentioned
before and that's where you have, uh, the least control
over where the data resides you're buying essentially a
service, uh an application that and kind of all in that
package is the application the security the data hosting
and it's you can there there are some small choices that
you can make, um, where whether you know, they have terms
uh in the industry such as Government cloud and Commercial
Cloud, um, and to an extent you can
Select regions in some cases of where your data is hosted,
but that's really dictated by the SAS provider. Um, so
those are kind of like when when you're talking about, you
know, kind of where is our data hosted that's kind of how I
break it down.
So
if this ordinance passes the way that it is, um, there
would be
A an advantage is essentially to anybody who's offering to
house all of the data in in the city of Chicago or in
Illinois. Um, it's not necessarily a requirement. Um, so
and I would say not all of it because if you take a look at
6 and 8 that's 14 to 86% can be stored anywhere else in the
US.
Similar like that was my question earlier 6 and 8 like so
talk to me about the 6 and 8% Is that 6% of the data?
It's a bit the bid incentive. Um, and and listen. I I
apologize that I didn't understand that John like so yeah,
please carry on. Um, Jim do you want to explain that
please?
Yeah, this this experiment said this is a bid incentive.
Right? And so, you know as a Sizzle was also saying, uh
Cloud providers, you know, Google Azure Microsoft Wright
interviewed us. They have multiple data centers in what's
called Data Center regions throughout the United States the
way to US federal government, uh, manages the data security
and data redundancy right now as they typically use. Um,
Either multiple Cloud providers or they use multiple regions
from a single cloud provider. For example in Amazon World
Amazon has a GV cloud in Oregon and has a govcloud in Ohio.
So most US federal government agencies leverage both the
Ohio region and the Oregon region, um, you know, as far as
you know, how where you know, how does this uh ordinance
incentivize right? Um, they did incentives would
incentives. So let's say the city put out a new uh, it
procurement contract next year. Um, uh, let's you know say
this ordinance was passed and that procurement contract the
way this would be implemented very similar to how other
States cities and the federal government implements these
things in the in the in the uh, statement of work and the
performance work statement of the contract. Uh, the bidder
will be required to to make a statement that at the very
least. All the data is going to be stored in uh, um, uh in
a in a data center within the United States the vast
majority I'd say about 90%
For the software as a service providers that were referenced
earlier, they build their services on top of AWS Microsoft
or Google and so in fact, you know, you might be buying
something from Salesforce, which is a software as a service
provider. You might be buying Office 365 to Microsoft. You
might be buying um, you know, some type of Oracle, um, HR
System those softwares or Services themselves are actually
built on top of the underlying hyperscale cloud provider.
And so Indies government procurement contracts, what you do
is you stay, you know, hey, we need we need uh, we need
redundancy, right? So, you know, whoever is going to bid
the software as a service for some kind of data storage.
You have to provide at least 2 locations within the United
States. We also require you to uh at test right to where
uh, where generally the data is going to be stored. Right?
And so what this ordinance is doing is saying if you bid on
this contract and you can make a test that you're using
data,
data storage and or software as a service or some other it
service that we're trying to procure as a city you got if
you get a test that you're You're Number 1 you have to
attest that you're storing it within the United States
asking for the data to be left. If you can additionally
attached it your software as a service is leveraging a data
center, uh within Illinois or Chicago and I I will remind
everyone that every hyperscale cloud provider does have a
presence in the state of Illinois, uh what this ordinance
is doing is incentivizing Google Amazon Microsoft.
to expand their data center presence in in Illinois and in
Chicago and so in these new contracts, you're essentially
saying hey, we we are we have to legally store today in the
US. So as a contractor, yes, I'm doing that and number 2. I
am now saying that I'm using I'm telling myself. There's a
service or I'm telling my client provider. I want to use
the Illinois and or decision Chicago data center region the
store City specific data.
So that's storing All City specific data, not 6 not 14% or
6% or 8% of the data. I and again, I'm sorry that I'm not
like wrapping my head around that if that's the case well,
and I think those are implementation details right that the
Chief Information officer and others would um Define right
further Define in executive agency type policy, right? You
know, what what is the amount of data? What is the
procurement asking for right? Um, you know, for example if
the procurement is for a specific City agency the
procurement could be very specific to a 1 system like this
is a system that is going to manage and track um traffic
data for the Department of Transportation for example, and
you know out of that traffic data, we expect to generate,
you know, 50 gigabytes of data per day and what what you
have to attest to as a contractor is essentially that you
know, all or some of that data is being uh stored in a
Data center with being Illinois and city that would be up to
to procurement specialist to Define what that what that
measure should look like.
So that doesn't currently live in the ordinance.
Chairman if I may Bruce, uh Bruce coughing Chief
Information Security Officer just a point of clarification
as currently worded. It does call for all city data the 6%
and 8% is related to the bid incentive. So as worded, um
for the bidder to um, whose awarded the contract
Again, as I understand things and is an execution for them
to achieve their um incentive they would have to show that
all city data was stored, uh within the state. There are in
this substitute ordinance. There are there is language, um
that does Define out city data. So just want to call that
out it does uh in the most recent version does have a call
out for backup and Recovery that is out of scope, which I
greatly appreciate. Um, but uh, just wanted to call out uh
to your question that uh, as currently worded. Uh, it is
all city data.
Thank you. So.
So essentially the way it reads. It's a 100% of city data
and I know Mr. Keg just said like all or some of the data.
No. No, that's not. Yeah, that's well. I I don't I don't
agree with um, the gentleman on that on that point it it
defines what in the substitute or and B1, you know, it says
unless otherwise prohibited by federal steroid law, you
know for any contract for the storage of city data the
procurement officer shall out right and so it doesn't make
any um, you know legal assertation that all right the word
in quotes all all city data has to be stored in this
manner.
Um, so if you again using the example of an actual contract
bid, that would go out, you know, if it was the Department
of Transportation or you know, you name your city agency,
you know, they would State we have a requirement for uh
traffic data to you know, be stored in an IT system and and
uh, you know, this data must be stored within the United
States are going to be on this.
And also if I'm fitting on the contract, I could say hey I
am using uh, an a hyperscale cloud service that uh will
store that data within the city of Illinois, but based off
that the current uh specialist is the the 1's designed in
that contract to say in the procurement in this in the
performance work statement. Essentially, they could stay um
as long you know for any provider.
That stores, you know, 100% 50% 75% of City traffic data, um
will be eligible for this, uh incentive right? And so
you're actually stating in the request for proposal what
the definition is, as of of of of what you need to do as a
contractor to uh to be eligible for this incentive, right?
And so it doesn't have to be all data, right? So if it's a
city traffic data in the into RFP and in the performance
work statement you could say hey it's 80% of traffic data.
It's 50% of the data.
Okay, I get there's a Point of Departure and sorry go
ahead. Hi chairman and uh Alderman, uh, this is Christopher
Cole with the Department of Law assistant Corporation
Council. I just want to clarify, uh, the language in the
ordinance to this question. So it provides in B1 as
mentioned that um, the bid incentive goes to uh for
ensuring that all such city data.
Meaning all the city data that is subject to the contract.
So it's outlined in C in the bottom here in C. Yeah. Yeah.
So the the definition for city data is obviously, uh fairly
wide sweeping but not every piece of information that the
city generates is going to be the subject of every contract
that the city engages with with a you know a
data storage provider and I would uh defer to DTI on that
point, uh, but as written the uh ordinance would require
that all the data as defined that is subject to the
contract. So if the contract is for uh, you know, police
related data all of that data, uh would need to be stored
either within the state or within the city to receive the
applicable, uh earned credit, right and all means 100% as
defined.
Yes, okay. Um.
So that leads me to my next question about in enforcement.
I you know determine I know that this is meant to be an uh,
an incentive and people have to attest to it. What what are
we doing to ensure that? It's actually happening.
Well again, that's why the chief procurement officer put
this language in because they're going to be responsible
similar to any other type of contract where people are
testing to meeting any type of incentive or goals. Uh, the
cheaper criminal officer has a compliance officer has to
deal with this and so they'll be working closely with DTI
to make sure so do we have anybody from procurement here
that can speak to this?
I'm just concerned about offer. This is a great incentive.
And you know, I have a data center. That's right next to
the ward that I just toured cuties. Um, and I know that
this is a a growing industry and it brings in.
A lot of tax revenue. Um, I what I want to make sure is
that you know, we've got a mechanism in place to ensure
that whatever this wants to do, um actually accomplishes
that so and I'm sorry is is it okay? I've got a couple more
questions. Yeah. So so what I'll say is that again the the
cheap procurement office, uh
These the the the deputy which is Patrick call was very uh
engaged in making sure that the language is related to
procurement was was part of these were part of the
substitute. Uh, and the compliance portion will be uh
respond the C. The procurement officer is compliance
Department. We be working with DTI to make sure that
there's some compliance
similar to
every other contract that we have in any type of incentive
or any type of goals that are put forward got it. Okay. Um,
so
Let me move on to the other ones do we have some sense at
this point of what we in? I don't have a sense of size and
scale of what city data looks like how many data centers
like physically need to hold all of the how much are we
talking about here? And how much do we think that this is
potentially going to create the opportunity for to to build
more capacity? Yeah, so I'll defer to DTI that
responsible for that
Sure, Bruce coughing Chief Information Security Officer, um
to the points that were made earlier. Um, this is specific
to um contracts, uh that are in scope for this going
forward. So it's to my understanding how it's been written.
It's not reflective of current practices, but on in scope
procurements going forward.
Okay, so maybe through the chair, um, if we can get from
procurement, uh, I just like a a schedule of current city
contracts. Um, and when they expire that would be impacted
by this ordinance.
Okay, we'll do yeah, thank you. Um
I know there was a lot of conversation about sister
agencies and I was told that there was a curve out for them
is that not the case say again, uh sister agencies CPS CPD
CPD, um, you should have received. Um, if you didn't
receive it, it's in the 1 drive 1 data 1 Drive CPD is
actually supportive of the substitute. Okay, um, and then
because I did get we all got calls from well and and and I
have to I have to say, you know, this this ordinance we
introduced it in. Uh, I think februari March, uh, and uh, a
lot of folks had had the opportunity to take a look at it
as drafted initially. They had some concerns. I listened to
the concerns so over the weekend. Well, a lot of people
were grilling hot dogs and flipping hamburgers. I was
talking to the Law Department, uh, DTI CPO CPD to make sure
that we could make them comfortable. Uh,
And as a result of that the substitute is what you have
before you that um CPD is in full support of okay.
CPS and Cha still
I mean, it's
I was under the understanding that there was a carve out for
sister agencies. Is that not the the case at this point?
I don't I don't see I
carve out for it was just something someone said to me
chairman. So I'm just trying to validate it 1 way or
another.
I Alderman uh again Christopher Cole this is incorporation
council with the Department of Law. Uh, this ordinance
would not apply to Sister agencies. Uh, we don't have
authority to uh, find them in this way, right? Yep. Okay,
thank you. But but I would say that we did take it to
consideration some of their concerns, but I would say that
I think buying power of the city and its sister agencies
allows us to leverage a better price. And so I think at
some point as this keeps moving, uh, hopefully they'll put
forward policies that uh resemble what it is that we're
trying to accomplish here.
Okay, um.
Thank you. I have um, let me see if I've asked all of my
questions here.
And maybe this is through the church. I don't know that Mr.
Kaufman can can answer this. Um, how many contracts and
what are the what's the value of um, the contracts that we
have exclusively for data storage.
We can certainly work to provide that back through the
chair.
Great. Thank you. You know a a lot of my questions are just
around size and scope. I don't I don't really have a a big
concept of um.
All of what this is going to impact obviously ter, you
know, there's been a lot of conversation. Um, and I know a
lot of people coming to this late to the party. I know this
has been around for a long time. Um,
and I would say that we've Incorporated a lot of what the
mayor's office wanted as well as what the chief procurement
officers wanted DTI wanted CPD Etc. So they make to make
sure that we're providing and taking into account some of
the concerns and addressing them again how we get to create
additional revenue is what the intent is. Uh, and so I
heard from those departments that were concerned with the
original ordinance and that's why we have a substitute that
incorporates.
The majority of the language that was put forward by those
departments. Got it. Um, thank you. I'm going to end my
questioning. Thank you. Thank you. Thank you all woman
Cruise.
Thank you chairman. I do also have other questions as you
can see there's a lot of questions and uncertainties when
it comes to um this or uh resolution but let me ask a
couple questions. I I want some clarification. So can you
clarify which company is going to be the uh facilitator
who's going to be managing this data?
Is a Metro Edge it said who who is it?
I I have gone 2 different names. Um, but I want to hear
confirm who is
because we talked about only 1 company.
Being the business or again the company running this who is
it? It's a Metro Edge is a data storage for Amazon who is
the company
there is there is no company. This would allow for an
opportunity once procurement is going to procure data
storage. It would be an RFP that everybody would bid on.
So you would have um Amazon Google Oracle.
Microsoft all the hyperscalers would have the ability to
procure and perform on these projects. So where does that
Metro Edge come from? Like is is that somebody you're
speaking with like for advice or how the how the this name
came up when it comes to Metro Edge. So um, this is a
minority-owned firm that is providing, uh, or developing a
minority-owned, uh team that's putting forward and getting
into the data center business. And so this is an
opportunity to diversify an industry that has no diversity.
Uh, and so again, the procurements are going to be followed
under the under our code. It'll be all Public public rfps.
People have to respond to the cheap procurement officer
would do the proper vetting as as under our code DTI would
make sure
That the language that's being procured is exactly what
they want. So, um again, that's somebody up the waters that
this is an industry that has zero.
zero participation zero minorities zero women in the
industry
Um when it comes to can you clarify Jim's title and who he
works for? I I didn't catch that at the beginning Jim. Did
you want to um
Talk about who you were for now.
Yeah, I work for my own company. Oh my pee. So I I started
and created my own Consulting business. So we could solve
with federal state local and international governments
across the world. So he's a consultant. What is the name of
your company?
Omega p
Omega P Omega, okay.
Um
And as you can see, there is a lot of hesitation from
others public speakers that were here. Um, and you know
other questions that have been asked around how will this
work and how this will be implemented and you know, there's
some but you know answers given and then you know, there's
a little bit back and forth going here. Um, just when it
comes to all of this I think taking a vote today will be at
the service, um, because there's still a lot of questions
to be answered when it comes to this. I understand that
this has been presented to us for you know, since um early
at the beginning of the year, but I believe that we need to
bring more people into the table and you know, we have a
great Partners who have are against this
and we have seen in other ordinances where not only the
administration comes into play but every other sector as
well, um, if you can hear from all of us, we have been
receiving a lot of concerns throughout this, um ordinance
and we want to make sure that everybody comes in and and
address those questions. So I'm you know, there's a lot of
hesitation and even some of the answers that were provided
today. Um, I don't think you know, we're we're ready to
move forward uh with this but that's just my um personal
opinion and but I appreciate that and you'll have the
you'll have the ability to to vote. Um, that is right. Yes
or no. So that's up to you. I mean, I think I think we can
allow perfectly to be the enemy. There's been a lot of
discussions with the Departments a lot of discussion with
the mayor's office to come forward with a substitute that
we've all agreed upon. Um, and an ordinance is a living
document as DTI has mentioned as they continue to as they
continue to try to implement this if they see issues
they'll come back and say hey we need to amend the
ordinance in order to account for this type of thing that
we could
account for
so, um by all means, um, you know, you're you're the
representative from the 30th Ward and if you feel that you
don't want to vote in the affirmative. That's your that's
your prerogative. Um, but I but I would say that it's been
a lot of discussion. Uh, a lot of times there are opponents
to everything. No, but if you even if you hear it here, I
mean we had a lot of questions being asked already as well
when it comes to this is I can send you a certain, you
know, there's a lot of uncertainties when it comes to how
will this going to work? You know, what is it really going
to be in?
Implemented. I know there's a lot of information that's
going to be done to to the chair that will allow us to you
know, have more time to to do this. But absolutely I know
what I can do when it comes to my vote. So I don't need a
reminder on that. But just want to let you know when it
comes to you you're hearing the questions here. No, I
appreciate and I appreciate the I appreciate the comments
from uh, the colleagues and uh, um.
And is there always going to be opposition?
There are people that will complain if they get 100 bucks
and singles. So the reality is is that we can't allow
perfect to be the enemy and we're going to put we're
putting this forward. There's been a lot of collaboration
between uh, the mayor's office DTI the CPO CPD to get to a
point where everyone feels comfortable. Uh, and and the
ordinances is is a living document and so as we continue to
try to implement it if we see that there's things that we
couldn't account for we'll come back, uh in DTI, we'll ask
us to make the amend the changes in order to in order to
account for the the some of the barriers that they're
facing.
So again, I I I've I've committed to working with my
colleagues. I'm committed to working with DTI. Uh and DTI
has uh, and the mayor's office have asked that if they find
out issues bring it back. I'm more than happy to do that at
the end of the day. We're trying to create Revenue separate
and apart from from property tax increases Tiff sweeps
fines and fees and this is this is something that um, um,
I've heard from some of our colleagues their support of uh,
and then there's some that are not supported and so again,
I'm I'm okay with that. I would love to get the unanimous
unanimous vote but some people uh have different
prerogatives. I'm okay with that. So, um, that's where
we're at right now.
But I appreciate your uh inquiries automatic Cruise any
other questions.
All right, um at this time.
I comment again and say I I appreciate all the work that
you've done for this and I um and the intent of it. So, um,
I I would just hope that we can
we have more time to bring other voices to the table,
including our uh commissioner for environment or at least,
you know, take take seriously, um what we can do better and
challenge, um challenge us with time like can we have a
little bit more time?
To hold this thing committee to have more conversations to
build off of the good work that you've already done and
that's what I'm asking for. So you're asking you're asking
to hold the ordinance and committee. Yes. Okay. So what
we'll do is we'll go ahead and take a vote. Uh, let me get
some of the other members that are part of Aviation to come
back so we can take a vote.
Um now this recess for a couple minutes while while we have
my staff go get
the committee members from Aviation
All right. Um.
The uh, comedian economic tech technology development is
called to order.
Um, there was a motion to postpone.
Consideration until the next meeting of the committee. Is
that accurate? Um
Yes Alderman. Yes. Sure. So on that motion. Um, we will
take a roll call vote.
Your voting yes to hold the voting no to move forward and
have a vote on The Substitute ordinance. Uh that was agreed
upon by. Uh, the mayor's office CPD and DTI.
Alderman mostly
Alderman chairman viegas know
alderman laspada
Alderman Hall
Alderman Mitchell
Alderman Chico
Yes.
Alderman Lee
Alderman woman Gutierrez. Yes.
Alderwoman Taris
alderwoman Cruise
Alderman Cardona
alderman waguespack
alderwoman mitts
Yes.
Sorry, can you repeat that? Yes.
Alderman Napolitano
alderwoman Mana hoppenworth
the yeses have at 8 to 5.
So the motion to postpone consideration until the next
meeting.
Uh has passed and so we will hold uh this until the next uh
meeting of the committee on the economic capital and
Technology development.
Um going back into order.
Um at this time, we're going to return to our regular agenda
order and consider item number 4, which is an ordinance to
approve the issuance of a Class B tax incentive for
property at 5201 West Grand Avenue in the 37th Ward Beth
Maguire project manager for the Department of planning and
development is here to present in support of the item and
of the item and will be available to answer any questions.
We also have members of the development team available to
answer any questions Mr. Maguire.
Good morning, chairman viegas and members of The Economic
Development Committee for the record. My name is Beth
Maguire project manager with the Department of planning and
development.
I'm here today to request your approval of a Redevelopment
agreement between the city and mctd LLC for the purposes of
authorizing a class 6B property tax incentive.
Also in attendance is the owner of the company of mcdi
Daniel. Jordaan and that company owns mover, Chicago.
The property is located at 5201 West Grand in the 37th Ward
represented by Alderman mitts who is in support and has
submitted a letter to the chair.
And within the Belmont Craig and community area in the
Northwest planning region.
The property is on the southwest corner of West Grand
Avenue in North Laramie Avenue surrounded by mix of
commercial and Industrial uses the subject parcel is
outlined in red.
Shown here is the property in its vacant condition. The
site was formerly occupied by various users over the years,
but had been vacant for more than 5 years.
Mover Chicago is a moving company, which has been in
business for more than 10 years and is currently located on
the northwest side. They've purchased this empty building
and will perform an interior remodel to accommodate the
needs of the growing moving company.
There is currently 8000 square feet of office space with
room to create an additional 10,000 square feet.
And also storage space in this is all situated on 2. 5 6.
They currently employ 60 people but will create another 20
permanent jobs as well as temporary construction jobs.
The developer is requesting a class 6B to offset
development and operating cost at this location. The area
is home to other light industrial facilities. So this
development will be compatible with the surrounding uses.
The total sorry.
The total project costs are $3 million funded approximately
30% with equity and 70% with debt.
The current taxes are approximately 103000 in the estimated
abatement to the applicant is 8366000 over the 12 year life
of the incentive the city share of that is 193,000.
The project will have many benefits for the city in
surrounding Community such as retaining 60 full-time jobs
and creating at least 20 full-time positions with up to 20
temporary construction jobs, providing continuing support
to the city's efforts to revitalize this indoors Industrial
and Commercial area with the 3 million dollar investment in
addition to removing a large vacancy.
They will also support minority women owned businesses
throughout the construction process.
Thank you for your consideration and we are happy to answer
any questions.
Thank you. Thank you Miss McGuire. Um alderwoman admits has
provided a letter of support for this item Alder alderwoman
mitts. Did you want to comment on this project?
Yes, sir, Mr. Chairman. Thank you so much, um committee
members and chairman. Um, I'm happy today to be able to
take out vacant property on utilize uh business in the
community to bring forth new business, uh movers Inc as a
company that uh able to so they'll be able to move um,
constituents throughout our community or in the city of
Chicago or either a store, uh merchandise until they're
able to move so it's a business that uh,
currently we don't have uh that are growing and I'm hoping
that um, we could support their effort today, uh in
supporting the class 6B so that uh, we'll be able to
utilize this facility, um and put manufacturing property
back.
on the tax role and provide
um revenue for the city of Chicago, so I'm asking the
committee for their support and look forward to uh,
continue to improve um movers Inc in their efforts to
relocate to 37th award.
Thank you all minutes. Are there any questions or comments
from members of the committee?
May I have a motion to recommend passing this item by the
same role call was applied to establish Chrome aluminum
crew so moves here. No just ordered the new pass
recommendation reported out the next city council meeting.
Um item 5 on the agenda is an ordinance to approve the
issuance of a Class 6 B tax incentive for the property at
9165 South Harbor Avenue in the 10th Ward.
Robert bumpers financial planning analyst is with the
Department of planning and development is here to present
in support of the item and will be available to answer any
questions. We also have members of the development team
available to answer any questions Mr. Bumpers. Please begin
the presentation when you are ready.
Thank you, uh, good morning chairman viegas and members of
the economic committee for the record. My name is Robert
bumpers financial planning analysts with the Department of
planning and development.
I'm here today to request your approval of a Redevelopment
agreement between the city and packet Corporation for the
purpose of authorizing a 6B property tax incentive renewal.
The property is located at 9165 South Harbor Avenue.
Within the South Chicago community area and the 10th Ward,
this is Alderman Chico's Ward who is in support? And this
is the far south planning region.
Property is located on the South County. Meaty River at the
corner of South Harbor Avenue and South Ewing Avenue.
Shown here is a property in its current condition the site
houses the packet Corporation.
It's founded in 1957 as an outsourced contract packager
operating out of a 15,000 square foot building on Chicago's
Southeast side in 2001 to meet customer demand and under
the direction of the new owner Marco Molly packet purchased
the 105000 square foot former nalco chemical facility on
the Southeast side of the city.
the move allowed packet to expand its lines and offerings
packet recognized the need to offer R&D and new product
development compounding services to fully integrate the
entire supply chain for online and e-commerce focused
customers packets reinvestment philosophy continues to this
day and has allowed packet to cater to almost any
outsourced contract packaging customer need
current photographs of the interior
and this is a floor plan of their new lab space.
The project is to improve the property by substantial
Rehabilitation of packet corporation's lab building to
provide a world-class.
Space for its growing research and development as well as
quality and Regulatory teams, the improved structure will
offer packets R&D team. The resources needed to service
consumer Brands within the health and beauty and household
and cleaning products categories the rehabilitation of the
lab building consists of a complete interior Demolition and
new buildout of the Interior Space.
This is the final phase of a nearly $4 million project that
began in 2019 that includes substantial Capital investments
in upgrading buildings machinery and plant equipment.
Total project costs are roughly 3.9 million with sources
being a combination of equity and debt.
the estimated abatement to the applicant is 984,000 with a
net present value of 715000 City share is 227000 with an
npv of 165,000.
since the purchase of the site in 2000
through 2022 packet has invested over 5 million dollars
with further upgrades being made.
Uh their job growth over the years, uh has been uh, quite
substantial for the company prior to 2001. They had 11
employees then moved to 58 employees and by the end of 2023
at 82 employees this project created 10 to 12 full-time
equivalent positions and 22 Construction.
jobs
also, uh packet Endeavors to hire within the community.
Again some in summary. There's a job creation numbers the
investment of the company and uh the abatement figures.
I'm joined here today by Marco Molly president and CEO of
packet, and we can answer any questions that you may have.
Thank you so much.
Thank you, Mr. Bumpers. Um almond Chico has provided a
letter of support for this item. Are there any questions or
comments from members of the committee automatic?
Thank you very much. Chair, uh sounds like a really
fascinating project. I'm glad for the job creation that
we're doing in ottoman Chico's board. I was curious. You
said at 1 point that this was a former chemical plant. Did
I hear that accurately? Yes, is there any need for either?
Internal or external environmental environmental remediation
as part of this project know that was taken care of when
they originally purchased the product, uh, the project site
in uh, 2000 appreciate it. Thank you so much. Thank you
chair any other questions?
Or comments from the committee.
Seeing none, uh ottoman laspata makes a uh makes a motion
recommend passing this item by the same role call that was
applied to establish Quorum hear me. No objection. So
ordered to do pass recommendation reported out the next
city council meeting.
Item 6 on the agenda is an ordinance to approve the
issuance of a Class 7 a tax incentive for property at 5100
South Damen in the 16th ward.
Antoinet Maxwell financial planning analyst for the
Department of planning and development is here to present
in support of this item and will be available to answer any
questions. We also have members of the development team
available to answer any any questions Miss wax miss waxwell
when you have an opportunity. Please present begin the
presentation when you're thank you.
Good afternoon. Um.
Chairman ven members of the committee. I for the record. My
name is Antoinette Maxwell for natural planning analysts in
the department of Planning and Development. I am also
joined today by members of the DS group. I believe Reuben
Diaz as well as tomorrow George's uh, the legal
representative for the developer.
So I'm here today to request the approval of an ordinance
supporting a Class 7 initial property tax incentive for the
DS Group LLC. The developer the DS group has been a
family-owned business for 45 years providing landscaping
and no snow, uh removal services.
The project is housed in the 16th ward within the new City
community area and alderwoman Stephanie Coleman has
provided support for the project.
So this is a area view with a little uh small red square
long Damen Avenue of 51st Street.
and this slide
shows the current condition of the site's exterior, uh,
which was once a local community bank.
the next slide also provides current conditions before and
after renovations
Okay.
So again, the building has been vacant and boarded up since
2015 which housed a Community Bank the developer the DS
group purchased the property in April of 2022. They have
improved upon the property for the purposes of establishing
their headquarters and administrative offices for the for
their um for the organization, which again is providing
landscaping and snow removal services.
And the estimated uh tax savings to the developer is
approximately 239000 over the 12-year incentive period uh,
the project investment is roughly 512,000 and the
renovations were complete in November of 2023.
The next slide shows the budget of the 500 roughly 512,000
which includes hard costs of 200 and 7,
Um
I'm sorry, 271,000 and also the purchase of the property
which was roughly 200 and 7,000 and then also a small um
NLF Grant.
Tax analysis, uh shows over the estimated, um, estimated
that over the 12 years the tax savings to the developer
would be roughly 230 9000 with the city's portion being
55,000 and the uh, the total estimated net benefit to the
task taxing districts. Um is roughly a negative -6
And as a recap, uh, the recommendation, uh dpd is in
support of this project that is brought nearly 512,000 and
Investments to the new City community area. The project has
also created, uh, roughly 75 new full-time jobs 75
part-time jobs, uh, the company has retained, uh, roughly
287 full-time employees and 112 part-time employees and the
developer will save approximately 239,000 over the duration
of the incentive.
Additionally the community and the city benefits from um
not having the boarded up, uh property which uh was uh,
experiencing declining property value and has set vacant
for almost 10 years.
And thank you for your favor consideration of this request.
I can take any questions in the development team is also
here as well.
Thank you, Miss Max. Uh, Miss Maxwell, uh, alderwoman
Coleman has provided a letter of support for this item. Are
there any questions or comments from members of the
committee?
uh, I'll say that um
I know Mr. Diaz, it's it's um, it's funny Alder you might
Mr. Diaz provides snow removal service.
For Chicago public schools and was able to give me some
figures as to what the projected cost would be for a plow
the sidewalk pilot program.
Yeah, so, uh any questions or comments from the committee
members, uh, seeing none. Um,
Alderman carto makes a motion to recommend pass this item
by the same roll call vote that was applied to established
Chrome, you know objection so ordered the new pass
recommendation will be reported out at the next city
council meeting.
Thank you, Miss Maxwell. Thank you. I have the next 2. Oh
you do. Oh perfect item 7 on the agenda is an ordinance to
approve the issuance of the class 6B tax incentive for the
property at 2841 South Ashland in the 12th Ward.
Antoinet Maxwell present and supported this item will be
available to answer any questions. We also have members of
the development team available to answer any questions Miss
Maxwell begin the presentation. Thank you chairman. Again
Antoine Maxwell B financial planning analyst and dpd. I'm
also I believe I am joined with um, yes it uh Freedman of
the Google, uh commission company as well as believe Mark
Rogers who's a legal representation. And again, I'm here
today to request the approval of an ordinance supporting a
class 6B which is an initial property tax incentive for
Google Foods, uh, and Google Foods constructed a new 37,000
square foot facility on land that was uh, an event
abandoned, uh building and then demolished so it was on
vacant land.
And that building was that particular building was
demolished in 2012 and the new facility houses Google FS
distribution and processing plant.
The project site is in the 12th War within the Lower West
Side Community area and alderwoman Julia Ramirez supports
the project.
And uh, here's an aerial view of the neighborhood contacts
the properties in the small red square along Ashlan Avenue
and the Riverwalk
Okay, so a couple of slides here, uh showing the current
condition of the site exterior, uh photos.
Here you see, uh pictures of inside of the building of the
production line.
and then also another uh photo of
the of the warehouse section
okay, so the project again, uh is
The project again is a newly constructed 37,000 square foot
facility on land that was vacant. Um, and again that was
demolished in 2012 the new uh, facility houses Google Foods
Distribution and processing plant. They moved from its uh,
30-year facility, which was in the full 10 Market
neighborhood.
Uh, the facility is currently used for receiving processing
and shipping poultry products throughout the Midwest. The
site is also used and available, um by the public for river
access and which gives them access to the walking path and
to fishing
Okay, the estimated project cost was 14.7 million and the
project was completed in 2021.
the budget, uh, 14.7 million includes the purchase price of
uh, 2.1 million and heart costs of 9.5 which is funded by
owners equity.
And we have here the tax analysis impact the estimated 12
year tax savings are roughly 2.8 million with the city's
portion being 660,000. The total estimated net benefit to
all taxing district is uh, 1.4 million.
And as a recap dpd is in support of this project that is
brought nearly 15 million in investment to the Lower West
Side Community area. The project has created.
30 new full-time jobs and has retained 40 full-time jobs
for a total of roughly 70.
And again the applicant, um expects to save approximately
2.8 million over the life of the incentive.
And the city benefits also from the activation of a parcel
of land that has been sitting on utilized since 2012.
Uh, thank you that concludes my presentation.
And I'm I'm open to any questions. Thank you.
All all the women Herz has provided a letter of support for
this item. Uh alderwoman. Lee followed by autumn laspata.
Thank you chairman. Um, I just wanted to offer my support
for this tax incentive. Uh, this borders the 11th ward.
It's just across the the River from us. Um, and the the
work that they've done on the Riverwalk, there is great.
Um, I was this is a cross the street from the data center
cuties. Um, so this Corridor I think has seen some some
great new development. I and you know, I appreciate the
investment. Um from Google Foods in the community and the
jobs that it's created. So this has my full support.
Thank you so much cheer. I mean you'd love to see folks.
Who?
both like are leaving vult and Market based off of what's
happening there but finding new spaces to expand and the
city that is what we want to see which is awesome. I was
wondering if you could go back to the the uses and costs
slide.
This does not impact my vote but to be able to do a policy
like this solely out of equity is well, they I believe they
they sold that other facility and so they were able to find
that there's the narrative that is fascinating that says
something about Fulton Market. Uh, that is absolutely
genuinely fascinating. Thank you very much. Thank you
cheer. Thank you happy to make a motion to pass.
Thank you, uh Alderman laspada, uh, because its neighboring
the 11th ward aloman Lee.
Uh makes a motion recommended pass this item by the same
role call those apply to establish Quorum hearing no
objections or order to do pass recommendation will be
reported out the next city council meeting. Um item 8 on
the agenda is an ordinance to approve the issuance of a
Class 6 B tax incentive for property at 1621 to 1625 West
Carroll in the 27th Ward Miss Maxwell will present in
support of this item will be available to answer any
questions. We also have members of the development team
here to answer any questions Miss Maxwell, please begin the
presentation when you are ready. Thank you.
Again, Antoine and Maxwell financial planning analysts and
dpd. I am also joined today I Believe by Nick Wright from
uh, grey M's property development team.
So I am here today to request the approval of an ordinance
supporting a class 6B property tax incentive renewal for
the grayman Properties LLC located at 1621 through 1625
West Carroll Avenue.
The project site is in the 27th Ward within the near West
Side Community area and Alder Alderman Walter Bernett
Junior supports the project.
and you will see the um
the area context sorry
Go.
Area contacts here of the neighborhood and the small square
along West Carroll Avenue, which is also located in
McKenzie industrial corridor.
That's another area of view of the facility of the
location.
And this also is a uh, fosa photo, uh, which depicts the
current condition of these sites exterior.
So this has 2, uh 2 organizations within this site. So
there's um a picture of each each floor. This is graymont,
um on 1 floor and then there's an architectural firm on the
the other floor.
And this this shows um pulse Renovations these photos.
And so Grandma properties, uh, they purchased the building
in 2017 and they currently leases to uh, graymont equipment
distribution as well as um, Landon bone Baker architects
lbba
They did substantial, uh Renovations and 20 2017 and 2019
included a partial demolition improvements to a HVAC system
the fire protection whether W whether rice Windows elevator
improvements electrical upgrades structural modifications,
uh, which also created uh, breakout areas conference rooms
and work spaces. Uh, Greymon Properties LLC is a real
estate holding company, which comprises of 3 business
owners
and the tenants within the building, uh, which is again
Greenmont equipment distribution, which is a durable
medical equipment equipment distributor, which was founded
in 2012 and does service patients across the the Chicago
land area.
Uh, the other organization lbba is the Chicago based
architectural firm. Um that was been established since 1987
and the firm has a a strong focus and affordable housing
and neighborhood planning.
And the tax savings is estimated to be 584,000, um with a
total investment from the developer of roughly 1.3 million.
The total project cost again was is roughly 1.3 million
which consists of
of 1.1 million funded by the owner's equities loans and um
small nof Grant.
The estimated 12 years tax savings, um are 583,000.
Within the with the city's portion being 136,000.
Okay. So the recommendation um is a recap is a dpd is in
support of this project that has brought nearly 1.3 million
in investment to the near Westside Community area. The
project has also created 60 new full-time jobs.
The company has retained approximately 78 jobs in total.
and again, the they will say roughly 584,000 over the 12
year, um period of the incentive
And thank you. If you have any questions, I'm available to
take your questions as well as uh member of the development
team. Thank you, Miss Maxwell. Uh, Alderman Bernett has
provided a letter of support for this item. Are there any
questions or comments from members of the committee?
All right, seeing none. Uh Alderman Cardona makes a motion
recommend pass this item by the same role call that was
applied to establish Quorum here. No objection. So ordered
to do pass recommendation will be reported out at the next
city council meeting.
Um items 9 and 10 in the agenda are an ordinance to approve
the issuance of a class 6B taxing Center for property at
4500 West Chicago Avenue and a scr class 6B taxing center
for the property at 4545 and 4533 West Augusta Boulevard.
Both properties being located in the 37th Ward.
In Fogle Financial Planning and analyst for the Department
of planning and development is here to present in support
of both items which are linked together as 1 compass with
multiple addresses.
Um, we also have members of the uh development committee.
I'm sorry. We also have members of the development team
available to answer any questions. And I'd also like to
acknowledge former Alderman shelter who's in the audience,
uh, who's part of the team that's advocating for this, uh,
incentive Mr. Fogle. Uh, please begin the presentation
here.
Thank you and good morning chairman viegas members of uh the
committee.
For the record, my name is Aaron Fogle financial planning
analyst in the department of planning and development.
I'm also joined today by Craig Freedman dick Ginsburg and
Dora Cornelio from the development team.
I'm here today to request the approval of 2 ordinances
supporting class 6B property tax incentives for Freedman
seating company for the purpose of expanding and
reconfiguring its Westside manufacturing facility.
Freedman is applying for a class 6B property tax incentive
for its project at 4500 West Chicago Avenue.
as well as a class 6B sir, which is sustainable emergency
relief property tax incentive for its adjacent and
connected project at 4545 and 4533 West Augusta Boulevard.
Please note that both projects seeking class 6B status are
inextricably linked.
The project sites are located at 4500 West Chicago Avenue
and 4545 and 4533 West Augusta Boulevard.
Respectively which are in the 37th Ward The Humble Park
Community area the West planning region and the Northwest
industrial quarter.
Older woman Emma mitts has provided a letter of support for
the projects.
I'll first describe the 4500 West Chicago Avenue project in
more detail.
Here is uh an aerial view of the site, which is located at
the northwest corner of the West Chicago Avenue and North
Kilbourne Avenue intersection.
Here's a view of the current conditions of the site from
the exterior the site comprises.
um this comprises of 1 and partly 2 story industrial
building totaling 260 square feet the area that Freedman
seating proposes for its expansion will be limited to
approximately 160,000 square feet.
Here's a view of the current conditions of the site's
interior showing warehouse and Office Space.
the developer plans to expand into
uh a new facility
and strategically reconfigure its current facility the
developer plans to renovate the second floor of the new
facility construct essential facilities for employees,
including new bathrooms a lunchroom and locker rooms
upgrade the power and HVAC systems and make structural
modifications for equipment transfer.
Tax savings to the applicant are estimated to be 638220 over
12 years or 474181 on a Net Present Value basis.
The construction period is estimated to be about 6 months
with completion anticipated in August 2024.
The total project cost is approximately 14.3 million and is
being financed with 11.5% Equity 72% debt and 16% New
Market tax credits. However, Freedman is applying for the
6B incentive for only the 62% portion of the building that
it will be occupying.
The development costs attributable to this use are the 3.1
million described on the prior slide.
The estimated 12 year tax savings to the applicant are
638220 of which the city share is 147693.
the total estimated net benefit to all D taxing districts
is 540500540531.
I will now describe the 45 4533 West Augusta Boulevard
project in more detail.
Here's an aerial view of the site as you can see it is.
Adjacent and connected to the 4500 West Chicago Avenue
project site forming an integrated complex suitable for
Freeman seedings expansion and reconfiguration project.
Here's a view of the current conditions of 4545 West
Augusta from the exterior. It is a diverse industrial
building with an estimated average age of 80 years
comprising 20500064 square feet including Office Space.
Here's a view of the current condition of 4545 from the
interior the spaces functionally obsolete with challenges
including a multi-level Warehouse layout and Antiquated
construction, which will be addressed in the
reconfiguration plan.
Here's a view of the current condition of 4533 West Augusta
from the exterior. It is similar in age to 4545 and offers
about 177,000 square feet of mixed use space.
Here's a view of the current condition of 4533 from the
interior.
Low, ceiling Heights and narrow column spacing or aspects of
its functional apps allence that will be considered in the
planned refurbishment.
The developer will reconfigure its existing facilities at
4545 and 4533 West Augusta Boulevard in order to enhance
operational efficiency increase capacity and improved the
throughput in production processes.
improvements will include space optimization and
infrastructure and building modifications such as
reinforcing flooring updating electrical systems for
increased power requirements and potentially adjusting
structural supports.
tax savings to the applicant for the 4545 and 4533 project
our estimated to be about 432,000 or um 321,000 on a Net
Present Value basis.
The construction period is estimated to be about 4 years
with completion anticipated and December 2027.
Note that the initial step of the comprehensive project
involves rehabilitating the 4500 wish Chicago Avenue
property to relocate freedman's fabric cutting and sewing
departments in order to free up space and facilitate the
subsequent phases of the project after this move a
comprehensive reconfiguration of the 4545 and 4533 West
Augusta properties will commence.
The project cost is approximately 8.3 million and is being
financed with 20% equity and 80% debt.
The estimated 12 year tax savings to the applicant are
about 432 dollars of which the city share is about a
hundred thousand dollars.
The total estimated net benefit to all taxing districts.
Is about 36600.
Dpd is in support of both the 4500 West Chicago Avenue and
the 4545 and 4533 West Augusta Boulevard projects. Which
together will keep a homegrown Chicago company with 130
year history in the city preserve 630 full-time jobs and
create 100 full-time jobs.
The developers also committed to offering training and
develop training and employment in the community
particularly through Partnerships with local organizations.
Like the Jane Addams research Corp, which whose Training
Center is housed on the project site.
The combined projects will bring over 11.4 million dollars
in investment to the west region of the city.
Even with a class 6B abatements the projects will still
generate a positive net property tax impact to all taxing
districts.
Thank you for your consideration of these requests. I as
well as members of the development team are happy to answer
any questions you might have. Thank you, Mr. Fogle Ottawa
mitts has provided a letter of support alderwoman admits.
Would you like to uh, make a comment on this, uh project?
Yes, I would Mr. Chairman.
Members of the committee. Um, I'm happy to today to say
that we're keeping a company.
In the 37th war that have uh Legacy of over 130 years in
the city of Chicago and Cook County.
And specifically job growth in the 37 War. They have
expanded from 250 employees in 1998.
to over 950 by 2019 where the growth
Center in the 37 Ward where we established our operation.
1 year before
ottoman took office
and despite the need to downsize during the pandemic.
They were able to uh, stabilize currently and sustain 650
jobs post-pandemic.
And demonstrated resilience and commitment to our
Workforce.
They anticipate creating an additional 75 jobs over the
course of this project.
So they have a strategy facility expansion since 1998. They
revitalized the Motorola first manufacturing facility in
the 37 Ward investing over 5 millions in upgrading and
equipment.
And they have continued to expand with additional
facilities acquiring for acquired in 2012 and in 2023.
They invested over 39 million since 1998 to modernize and
enhance the manufacturing footprint.
Their decision to stay in Chicago Freeman experienced
significant economic hardship resulting from the pandemic.
And the revenue dropped over 40%
and left a net loss exceeding 15 million.
Freeman has recovered to near pre-pandemic level but need to
invest to maintain visibility.
They chose to invest further in Chicago and specifically in
the 37 War by influencing a commitment to the community and
the potential benefit from the 6, uh be Insanity despite
their feasibility of ternatea.
And in anywhere Freeman sedan has a facility and growing in
room to grow.
They have Community engagement and development.
So over 75% of the employees reside in Chicago.
With 45% from high economic viability errors and over 40%
from the 37 war or adjacent zip codes.
They are active for partnership with organizations such as
the Jame Adam Resource Center.
manufacturing Renaissance
Austin coming together
safer Foundation they Foster Community wealth welfare and
local economics employment.
A Freeman website can be found at www.freemans.com.
back slash about
back slash Mission cultural 30% of the new hires in the
last 18 months have come from a community connect.
So in the last 18 months 60% are referrals from Community
organization are returning Second Chance citizens.
They have a Innovative training program.
That collaborates with local training centers to employ and
train over 100 graduates and skilled roles.
They also have been awarded recognition from uh leaders in
the community and Workforce Development.
Which includes the chapter for Community impact award?
skills for Chicago and Future
Uh from business leadership award the Illinois Workforce
partnership.
and diversity Trail braids award from Burns and Thorns
birds and others
I am requesting that this this committee, um, approve, uh,
this class 6B as we are very much in supported, uh Freeman
seeding and the expansion. They also provides, um seating
for CTA buses, uh that runs in our city of Chicago and
we'll look at
employed to continue the growth of this company
So I asking for your favorable support for the class 6B.
Thank you, Mr. Chairman. Thank you Alderman mitz Alder.
And thank you so much plus 1 on everything that older woman
admits. So can I also asked I feel like you already pointed
this out. Is this an Adaptive reuse of the existing
structures?
You sir? Yes. Oh, thank you. I'm over here saying what
beautiful buildings and quietly Whispering keep the
building keep the buildings. Yes. It's great like 130 year
old company. Yes, making use of these beautiful looking
manufacturing buildings that they don't make anymore. I
might have to follow up with someone on your team because
we have more than a few borderline obsolete is
manufacturing properties in the First Ward, and I would
love to figure out how we attract these kinds of projects
to really outstanding. Thank you, sir. Thank you all woman.
Thank you. Thank you.
Any other questions or comments from the members seeing
none? All them laspada makes a motion to recommend passes.
Of the uh of the incentive by the Same by the same
favorable roll call that was determined to that was used to
determine quorum.
um all in favor
opposed no opinion of chair of the eyes have it.
um pass
um, we will now have a vote on each item individually, uh,
I'm sorry. Sorry about that. I got ahead of myself. Um, so
there were 2 items that were discussed item 9 which we
heard, uh, we'll vote on these individually so has already
made a motion to recommend passive item 9 at 4500 West, uh,
Chicago Avenue by the same role call. That was a step that
was applied that was applied to established quorum.
You know objection so ordered item number 10, which is the
second parcel. Um Alderman cardono makes a motion to
recommend pass of this item.
At 4545 and 4533 West Augusta by the same role call that
was applied to established Quorum hearing no objection so
ordered.
item number 11
The dup pass recommendation will be reported out the next
city council meeting item number 11 on the agenda is an
ordinance to approve the issuance of a class 6B tax
incentive.
for property at
12525 South carnival at Avenue and 12350 South Cardon
cardinet Avenue and 12359 South Burley Avenue. Otherwise
known as the Ford supplier Park in the 10th ward in Fogle
is here to present in support of the item will be available
to answer any questions. We also have members of the
development team available to answer any questions as well
Mr. Fogle. Please begin the presentation.
Thank you. Uh and again for the record, my name is Aaron
Fugal financial planning analyst in the department of
planning and development.
I'm also joined today by Kristen Johnson and Liz Butler
from the development team.
I'm here today to request the approval of an ordinance
supporting a class 6B property tax incentive renewal for
Affiliates of Northpoint development.
Which is crucial for tenant retention and the continued
operation and success of the Ford supplier Park
manufacturing campus.
The campus is comprised of 4 billion buildings 2924 East
126th Street.
12525 South Carolina Avenue, 1 2 350 South Corona Avenue
also known as 3400 East 126th Street.
and 1 12359 South Burley Avenue
Which are in the 10th Ward the South Deering community area
the far south planning region and the calamit industrial
quarter.
Alderman Chico has provided a letter of support for the
project.
Here's an aerial view of the 155 acre campus which includes
4 industrial buildings comprising 1.6 million.
square feet
of manufacturing space located less than a mile from the
Chicago Ford assembly plant.
Here's a view of Lot 1 as it's known.
Which is 2924 East 126th Street at 384000 square foot
building.
This is the interior currently occupied by Pico pallet a
North American leader and pallet pooling services and
Logistics whose leases up in 2025 as well as flexing gate a
leading manufacturer and supplier of large stamp metal and
welded components assemblies and plastic parts for the
automotive industry.
Flex and gate employees 506 full-time employees and
invested 30 million into built into its buildout of the
facility.
Here's a view of Lot 4 as it's known which is 12525 South
Carroll Avenue a 247000 square foot building.
This is the interior currently occupied by dakkota
Integrated Systems 1 of the largest Native American
women-owned and led companies in the US whose leases up in
2025.
Dakota manufactures integrated Automotive Interiors for OEM
manufacturers
Here's a view of Lot 8 as it's known which is 1 2 350 South
Carroll Avenue also known as 3400 East 126th Street a
460000 square foot building.
This is the interior currently occupied by Ford and Tower
Automotive.
Tower Automotive has invested in heavy machinery and
equipment including robotics assembly since locating at the
building in 2003.
Finally, this is a view of lot 9 as it's known which is
12359 South Burley Avenue a 547000 square foot building.
This is the interior currently occupied solely by Ford as
its uh modification Center.
In July 2019 Ford announced an investment in this facility
and the hiring of 4550 full-time employees related to the
expanded production of hybrid vehicles and police
interceptor SUVs.
Ford's lease is up in 2025.
There are 4 applicants each owning 1 of the 4 properties
all our Affiliates of Northpoint development.
savings from this renewal will support tenant renewal and
provide Financial leeway to undertake Capital intensive
retooling to keep the Ford supplier Park current with
automotive design and Manufacturing Technologies
maintain lower operational costs
help retain jobs and secure the campus's position in the
global supply chain and prevent disruption to the
automotive supply chain and provide stability and
predictability for long-term planning and the
implementation of growth strategies.
Tax savings to the applicants are estimated to be uh, about
147700000 over the 12 year life of the incentive.
Or about 10.6 million dollars on a Net Present Value basis.
Of the 14.7 million and tax benefits to the applicants. The
city share is about 3.4 million dollars.
The slide here summarizes the tenants and their investment
in the campus. There are 6 tenants occupying the campus 3
of which have leases due in 2025.
And there are 25582 jobs on the campus.
In The Last 5 Years, the tenants have collectively invested
about 11.7 million.
Additionally should the 6B be renewed and the tenants
retained North Point would undertake planned improvements
for all buildings, including concrete and asphalt repairs
to common areas sanitary lift station repair or replacement
and exterior building painting estimated cost 1.5 million.
To provide greater Regional economic context it's important
to highlight the connection between the Ford supplier Park
and the Ford assembly plant.
Uh, the Ford supplier Park is less than 1 mile from the
Chicago Ford assembly plant at 12600 South Torrance Avenue.
The assembly plant was opened in 1924 and employs 4,852
people.
Ford suppliers at the park provide parts and components to
the Torrance plant
or an other tenants of the park benefit from reduced travel
time and cost from supplier to customer increased
flexibility and faster response to customer preferences in
2019 Ford invested 1 billion dollars in the Chicago
assembly and Chicago stamping plants to make the current
slate of vehicles produced there.
Dpd is in support of this incentive renewal that is pivotal
to maintaining the financial viability of tenants
preserving existing jobs serving as a critical defense
against potential disruptions and attracting further
development.
Thank you for your consideration of this request. I as well
as members of the development team are happy to answer any
questions the committee may have.
Thank you, Mr. Fogle. I have to I have to admit born and
raised in Chicago. I never heard of.
Kendall let Avenue.
I guess that's all.
Candaele Avenue Way South so um, yeah never heard of that
street. Um Alderman Chico has provided a letter of support
for this item. Uh, are there any questions or comments from
members of the committee? Um this 1 sorry as we're closing
in on our 3, but um, could we go back to the I think it was
sources and uses its the 1 where we we were looking at here
go back. There we go. So,
I I'm sure that this has been properly vetted. I trust a
lot of folks at dpd.
It is strange to have an application for which there is no
total project cost or project timeline. Can you talk a
little bit more about?
Why dpd is comfortable with that being a part of the
application so that we can feel more comfortable with that
application?
absolutely Alderman, um, if you'll allow me to flip to
This slide I think this slide provides, um a good summary
of dpd's recommendation rationale. We view this project
kind of strategically to the region. Um, as you said
without uh specific project timeline or the project cost we
We view all the savings that the um.
the property owners, um will get from the incentive will go
right back into tenant retention which will allow them. Um,
To invest right back into the properties. Um, keep their
tenants keep the jobs, uh signal, uh,
That the uh cities investing and supporting this important
industry preventing supply chain, uh disruptions to the
automotive industry. Um,
allowing long-term planning and growth
and um
I think beyond that.
Um, we also want to recognize the uh past investment that
the developer has put in and the tenants, uh,
Over the past 5 years. Do you know what these are triple
net leases that they have with their tenants?
And I defer that to the development team.
You've just identify yourself for the record.
Good afternoon, Mr. Chairman and members of the committee.
My name is Liz Butler. I'm an attorney with Taft law in
Chicago. And I represent um North Pointe development who is
the uh owner of the of the petitioners. Um, yes, the the
leases are triple net. And this is a benefit that goes
directly to the tenants. Um, so it's it's a tenant
retention. Yeah, um oriented,
Uh, Miss Butler you see just what I was driving at. I
appreciate that point very much. Thank you. Thank you very
much. Thank you chair.
Thank you. Almost by any other questions.
uh from the
members of the committee
Where is automobiles Bank?
Oh, I'm sorry, uh Alderman hearing seeing no other
questions or comments, uh otter Alderman waguespack has
made a motion recommend pass of this item at the same role
call that was supplied to establish Quorum here. No
objections. So ordered to do pass recommendation will be
reported out at the next city council meeting.
Uh, the last item on the agenda is a resolution calling for
hearings on potential for and benefits of employee owner
ship transitional alternative of Enterprises throughout the
city of Chicago this resolution recognizes the promotion of
employee ownership as a strategy to maximize economic
sustainability and equity in the city of Chicago. We have
the substitute resolution that members should have received
that electronically and also a hard copy of this uh of a
hard copy in of this morning. Can I have a motion to accept
the substitute resolution Alderman wages back makes the
motion to accept the resolution hearing no objection so
ordered, um, the substitutes resolution has been accepted.
May I have another motion to approve a subject matter
hearing on this resolution to take place at 10 a.m. On
Wednesday. September 4th Alderman Cardona makes the motion
hearing no objection. So ordered the approval for will be
reported out at the next city council meeting being that
there's no further business. Uh, I may I have a motion
Into a journal by the same role call those apply to
determine corporate Alderman Cardona and wages back. Uh, so
move hearing no objections to order the meeting of the
committee on economic cabin technology development is
adjourned. Thank you.