Transparency Crisis: City Manager Says Hyperscale Data Announcement Was First News the Government Heard
*DOWAGIAC, Mich.* — A standoff has emerged between Dowagiac's mayor and Hyperscale Data, an artificial intelligence and bitcoin company that operates a data center in the city, after the Las Vegas-based developer announced plans to more than double its campus footprint without submitting any official proposals to city officials.
Mayor Patrick M. Bakeman issued an open letter to Hyperscale Data CEO Will Horne on April 1, 2026, demanding immediate answers about which property the company claims to be purchasing and calling for formal plans to be submitted within 45 days so the city can address growing concerns from residents.
"We have the same questions you do," Mayor Bakeman wrote. "While that company is a private business, given the current discussions around data centers, we've reached out to them for more information."
City Officials Caught Off Guard by Press Release
City Manager Kevin Anderson told News Channel 3 on Tuesday that the company's press release was the first the city heard about the land agreement.
"We saw the press release like you did, that said they are looking to buy some additional property and hoping to close on some in the next 60 days," Anderson said. "We haven't had any contact with them about that."
Anderson explained that under normal circumstances, when a property closes, forms get filed with the city so officials can send tax and utility bills to the appropriate party. He noted it would be very rare to hear something like this in advance.
"We're in a situation where we don't know what we're dealing with," Anderson said.
The city has yet to receive any development proposals from Hyperscale Data despite the company's public announcement about expansion.
Residents Have Never Been Able to Get Answers
News Channel 3 residents living near the facility said they've reached out to the company as well, but have never been able to get answers. They also complained about noise caused by the existing operation.
To address the lack of communication and transparency, Mayor Bakeman has released an open letter directed at Hyperscale Data CEO Will Horne.
"Last year, you made a public announcement that you intended to greatly expand your data center operations in the City of Dowagiac. Earlier this week, you made another public announcement about an unnamed parcel of land in Southwest Michigan, presumed to be in Dowagiac, that you intend to purchase. Both announcements were vague, and you have neither applied for nor received any approvals necessary to facilitate your expansion plans," the mayor wrote.
By doing this, you've bred uncertainty and eroded our confidence that you will do the right thing in our community, Bakeman said.
Here's what's expected of you:
- 1.Immediately announce which property you claim to be purchasing. That will end the needless speculation that has run rampant in our community. While you are likely to have NDAs with the property owner, I trust that those agreements can readily be terminated by mutual consent.
- 1.In response to your 2025 press release regarding your growth plans, City Council and staff have spent the last several months preparing for your plan's submission. We've spent time and money educating ourselves on the issues, consulting with experts in the data center field, and enacting new legislation to protect our community, like adding specific, enforceable decibel levels to our noise ordinance. We are ready to review your plans to ensure that you're on track to achieve full regulatory compliance. We expect that you will be able to submit plans within 45 days so that we can address the concerns that continue to be raised because of your multiple press releases.
We stand ready to listen. However, no proposal has been submitted and no decisions have been made. It is your responsibility to bring forward a clear and transparent plan, the mayor wrote.
Massive Expansion Plans in the Works
Hyperscale Data, an artificial intelligence and bitcoin company, announced in a press release that it has reached an agreement to more than double its campus in Southwest Michigan. The company said the need for AI is exploding and it's reached an agreement to acquire approximately 48.5 acres of land.
Through a land purchase agreement expected to close within 60 days, Hyperscale Data — which operates a data center in Dowagiac — would more than double the amount of land it owns in the area, bringing its total holdings within the community to 83 acres.
"This land acquisition will give us additional space and the opportunity for future development and demonstrates the Company's long-term commitment to Southwest Michigan and the company's operations there," Hyperscale said in a statement.
The company expects to finalize the purchase within 60 days.
Hyperscale announced last summer its intention to expand from a 30-megawatt to a 340-megawatt site, the power equivalent of tens of thousands of homes.
Residents Already Pushing Back
Residents of Dowagiac are bracing for the expansion, and some are already pushing back online. One resident described the noise from the existing facility as "nothing but a noise trap."
Mayor Bakeman said the city administration learned of the plans from the press release and the city has not had any contact with the company about their expansion plans.
"It looks like an AI data center is coming to Southwest Michigan, but not much is known," Bakeman said in response to the announcement.
The mayor called on the company to immediately announce which property it's purchasing to end the needless speculation that has run rampant in the community. He also asked the company to submit plans within 45 days so that the city can address the concerns that continue to be raised because of the multiple press releases.
Cass County Already Preparing
The situation in Dowagiac comes less than a week after Cass County Commissioners and planners hosted an expert from the University of Michigan who gave a talk about how local governments can prepare for and, if they so choose, object to new large-scale data centers.
Cassopolis is also seeing discussions about potential data center developments, with residents and officials seeking more transparency and community input before any projects move forward.
What Residents Want to Know
As the dust settles on this announcement, Dowagiac residents are left with more questions than answers. They want to know:
- Which specific property is Hyperscale Data purchasing?
- What are the power requirements for the expansion?
- How will noise levels be controlled?
- What environmental impact assessments will be conducted?
- Will the city receive any tax revenue from the expansion?
- What community benefits are being offered?
Mayor Bakeman and City Manager Anderson say the city is standing ready to listen once the company submits formal proposals that allow officials to properly review and address these concerns.
"We're in a situation where we need information to make informed decisions," Anderson said. "We can't address concerns we don't have the facts to understand."
The city has enacted new legislation to protect the community, including adding specific, enforceable decibel levels to the noise ordinance. Officials say they are prepared to review any plans the company submits to ensure full regulatory compliance.
Hyperscale Data says it expects the property purchase to close within 60 days, but the city remains in the dark about the specifics of the expansion and has not seen any floor plans or operational details.