Serving Lucas, Ottawa, Sandusky and Wood Counties
The Oregon Economic Development Foundation (OEDF) welcomed Vantage Data Centers to the community as the end user for the proposed data center in the city in a Facebook post on July 28.
“This is a significant milestone for our city and another step forward in strengthening Oregon’s position as a destination for innovation, technology, and long-term investment,” the OEDF said in its statement. “Projects like this don’t happen overnight. They take vision, collaboration, and partnerships. We’re excited to see what’s ahead and look forward to building a strong relationship with the Vantage team for years to come.”
In another post, the OEDF said the project is not proposed as a traditional tax abatement. Instead, officials said that it is structured around a Payment in Lieu of Taxes (PILOT) program that’s negotiated through the economic development agreement.
“The reason is that data centers are unique,” OEDF officials said. “A significant portion of their investment is in the equipment inside the building — servers, networking equipment, and other technology, which can be worth far more than the building itself. Rather than using a standard property tax structure, the parties negotiate a PILOT agreement that establishes what payments will be made and under what terms. Those payments are part of the overall economic development agreement.
“Whether someone believes the agreement is a good deal is a fair topic for discussion, but it’s important to understand that a PILOT is not the same thing as simply giving a company a tax abatement or letting them avoid paying altogether. The details of the negotiated agreement are what determine the community’s return.
“One advantage of that approach is that the payments can be directed according to the terms of the agreement rather than simply following the standard property tax distribution formulas. Under a traditional property tax system, property tax revenue is generally distributed among multiple taxing entities, such as the county, school district, library, and other local governments, according to Ohio law. A PILOT agreement can be structured differently, depending on what is negotiated and authorized, to support the community’s economic development goals.
“That doesn’t automatically mean a PILOT is better or worse than traditional taxation — it depends on the specific terms of the agreement. The important question is whether the negotiated payments and other commitments provide long-term value for the community. That’s why the details of the economic development agreement matter.”
In response to the post, Oregon mayor Steven Salander said in his own Facebook statement on July 28 that the data center project is not a done deal. He reiterated that to The Press in a conversation on July 29.
“It is absolutely not a done deal,” Salander told The Press. “I really feel this is more of the beginning of true negotiations and learning about more specific information about this potential site, whereas before it was more general and not specific to this end user or this specific site because that wasn't disclosed yet.”
Salander also said multiple ordinances would have to pass through council in order for things to become official, including the economic development agreement being approved, as well as a CRA (Community Reinvestment Area tax exemption agreement) that would have to be done.
The OEDF also said that no final agreement has been reached and that negotiations are still ongoing.
“Discussions involve payments in the millions of dollars, growing into the tens of millions over the life of the agreement,” OEDF officials said. “My understanding is that the new discussions will be conducted as a public process, allowing the community to see the proposed terms before anything is finalized. It’s also important to understand how a CRA PILOT agreement works.
“Under this structure, 50 percent of the negotiated service payments go directly to the school district, with the remaining portion distributed according to the agreement. That’s different from a traditional tax abatement, where taxes are simply forgiven. A PILOT is a negotiated payment structure that still provides substantial revenue to the local community while helping attract major investment. Until an agreement is finalized and publicly approved, though, the exact terms and payment amounts remain subject to change.”
Salander said in the meeting he had with Vantage officials that they are looking at constructing three buildings with 20-30 total permanent employees.
Meanwhile, as far as where the process stands, Salander said the purchase agreement extension in place with Will Turner of Capacity LLC is over at the end of September, and he is curious how the current petition circulating through town to have a potential charter change sent to November ballot from the United Neighbors of Oregon turns out.
“If that were to be successful, where it could be on the ballot, I feel that we need to wait and let the people's voices be heard prior to really moving forward,” he said.
There was previous discussion at council’s committee of the whole meeting recently about council potentially voting to put the measure on the November ballot, which would require at least five members to agree to proceed.
However, at this time, Salander said council has made the decision not to proceed with putting it on the ballot that way and instead letting the citizen action team take the lead.
“Council believes that the signatures are the best way to go to really have the citizens voice (heard), and that's going to have more of an impact by having it be put on the ballot through citizen movement,” he said.
Looking back
On Nov. 4, 2024, city council had a presentation about the data center project during a committee of the whole meeting. Following that, on the same night, council voted unanimously 7-0 to approve an initial purchase agreement to sell 170 acres of property in its industrial park for $17.3 million.
The agreement was with Capacity LLC, and the site was in the northwest corner of the industrial park at Corduroy and Wynn roads.
“We are looking at a project that over the first 30-year period that would net Oregon schools and the city of Oregon hundreds of millions of dollars,” former mayor Mike Seferian said. “It would really bring life into our community and our school system. For the longest time, we weren’t really considering data centers because for the city of Oregon, it didn’t really generate revenues … but if we structure a 100 percent tax abatement and have a payment in lieu of taxes, there’s an avenue that we can achieve that, and inject funds into our general fund just as though it was a payroll income tax.”
While concurrently expressing enthusiasm about the project, councilman Dennis Walendzak did urge caution during that special meeting.
“Everybody here is just like champing at the bit to get going on this,” he said. “But I do want to caution us. We see this large number on this piece of paper. Some of those numbers are encumbered for expenses to pay for stuff. This is just one portion, one step, to get to the next step. We cannot have such big eyes to spend money before we have money. So I just caution us.
“We are super excited. This is something that is tremendous for our community. It is a game changer that can change the educational direction of our school district, to change the direction of our police, fire, recreation services … things that we can provide to our community that will set us apart from our neighbors. I look forward to the next steps of working with the administration, council, (and) Capacity LLC. I look forward to working with you to make sure that we cautiously move forward so that we can benefit not just us but the city of Oregon 10, 20, 30 years down the road.”
Salander, then a city councilman, had a few questions — if there is any profit from the sale, where does that go; what happens if the project falls through; and if the company that Capacity LLC is working for is domestic or foreign?
“Of course there's profit in it, but we have to be careful with that because we will somewhat escrow that money,” Seferian said. “Worst case scenario, this doesn't work out, we have a buyback provision in the deal. We would want to have that money available if something all goes wrong. But we're going to take every step that we can to see that nothing goes wrong … but we will be cautious with that money. We're not going to start spending it.”
Councilwoman Beth Ackerman asked what page of the initial purchase agreement that the buyback provision was located.
The now former city administrator Joel Mazur said that the buyback language wasn’t in the initial purchase agreement, but that it would be in the economic development agreement.
“Is there a reason that wasn’t in here from the start?” Ackerman said.
“Yes, because we were planning to address it in the economic development agreement,” Mazur said.
“So we’re going to vote to go ahead with the sale even though we don’t have that in place?” Ackerman said.
“The sale is contingent upon having an economic development agreement in place,” Mazur said.
It was then said at the meeting that there’s four steps they have to get through before a contracted sale. The Nov. 4, 2024, decision basically served as a good faith agreement between both sides that they want to move forward, then allowing Capacity LLC to move forward with its diligence process.
