Data Centers in Lansing
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Lansing – Low-Risk Hub for Midwest Colocation
Executive Summary
Lansing offers a compelling data center market for organizations that prioritize stability, low disaster risk, and cost-effective operations. It serves as an excellent location for secondary disaster recovery sites or for businesses requiring reliable, low-latency performance to serve Michigan and the broader Midwest. The market's attractive tax incentives further reduce the capital expense of establishing a resilient IT footprint.
Lansing: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A solid secondary market with good regional network access. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramp hub is Chicago; access via PNI or wave is common. |
| Power Cost | $0.09 - $0.11/kWh, as of September 2025 | Competitive rates for industrial power help manage operational costs. |
| Disaster Risk | Low (9.32 NRI Score), as of September 2025 | One of the lowest-risk profiles in the region for natural disasters. |
| Tax Incentives | Yes | Includes sales and use tax exemptions for qualified data center equipment. |
| Sales Tax | 6.00% (Michigan), as of Midyear 2025 | State-level sales tax applies, though specific DC exemptions exist. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Lansing provides access to over 3 carriers, as of September 2025. The ecosystem supports carrier-neutral colocation, offering sufficient options for redundancy and competitive pricing for transit and transport services.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Lansing, as of September 2025. Businesses connect to cloud providers by utilizing private network extensions like PNI or wave services to major interconnection hubs, primarily Chicago.
Internet Exchange Points (IXPs): Public peering is limited within Lansing. Most network peering is conducted privately between carriers or through regional IXPs located in nearby hubs like Detroit and Grand Rapids.
Bare Metal: Bare metal server solutions are available from providers servicing the region. Companies like Hivelocity and ColoCrossing can deliver dedicated infrastructure to support compute-intensive applications from facilities in the Midwest.
Power Analysis
Average Cost Of Power: Industrial electricity rates in the Lansing area typically range from $0.09 to $0.11/kWh, as of September 2025. These competitive power costs provide a significant advantage for managing long-term operational budgets. The state's power mix includes 11% renewables, with wind power making up nearly two-thirds of that renewable generation.
Power Grid Reliability: As a state capital, Lansing benefits from a well-engineered and stable power grid. Data center operators can expect reliable utility service, with many facilities offering multi-substation support to ensure high levels of uptime for critical infrastructure.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Lansing are well-positioned to serve the state government, Michigan State University, and the region's prominent automotive, manufacturing, and healthcare industries. This proximity enables low-latency performance for critical local applications.
Regional Market Reach: From Lansing, organizations can effectively serve the entire state of Michigan, including major markets like Detroit and Grand Rapids. Its central location also makes it a strategic point for reaching customers across the broader Great Lakes region.
Tax Advantage For Data Centers: Michigan offers significant tax benefits that lower the cost of data center investment. The state's sales and use tax exemption on qualified data center equipment directly reduces the upfront capital expenditure required for new builds or hardware refreshes.
Natural Disaster Risk
Lansing has a very low natural disaster risk profile, with a FEMA National Risk Index score of 9.32 out of 100, as of September 2025. This makes it an ideal location for critical infrastructure requiring maximum uptime and minimal environmental threat. The primary risks to consider are weather-related events common to the Midwest, including tornadoes, winter weather, ice storms, and strong winds.
