Proposed East Dundee annexation deal would allow future data center

The Village of East Dundee, Illinois, is in negotiations over a proposed agreement to annex 74 acres of property owned by Plote Properties. This agreement includes provisions that would allow a data center to be among its future development options, utilizing an M-1 zoning designation that permits such facilities without requiring additional zoning relief. Village President Dan Pearson indicated that while Plote Properties has no immediate plans for construction, the annexation deal is still under discussion.

The proposed agreement also outlines financial incentives for a "qualifying development" of 100,000 square feet or larger, including a 25% reimbursement for Tax Increment Financing (TIF)-eligible expenses, a 25% electricity tax rebate, and a 20-year electricity tax freeze. A contentious point in the negotiations involves the village's obligation to extend water and sewer lines to the property within 18 months of annexation. This infrastructure extension, estimated to cost East Dundee between $6 million and $8 million, was originally tied to a specific data center developer discussions in 2026, and the village is now hesitant to bear the cost without immediate reimbursement.

Public sentiment regarding data centers has grown "controversial" since the initial negotiations, leading Village President Pearson to suggest that East Dundee may not need to offer as many incentives as initially proposed. Despite this, Pearson supports data center development, viewing it as a beneficial way for towns to fund infrastructure and generate revenue from electricity and property taxes. Trustee Scott Kunze expressed a desire for "some sort of basic regulation on data centers" that balances development with residents' concerns, while Plote's Vice President of Land Development, Ryan Trottier, affirmed the company's commitment to working with village officials.