Voicing ardent support for the project, St. Joseph County commissioners on Tuesday unanimously approved a 50% property tax abatement for Amazon’s $11 billion data center near New Carlisle.
The 10-year tax break comes with Amazon’s commitment to pay into funds to support local students, fire and county police services, green spaces, roads, water and sewer infrastructure, and other “community enhancements.”
The abatement, plus an 85% tax break for 35 years on the technology that will make up a large share of the project’s cost, will go to the county council for a final vote at 6 p.m. Tuesday, Aug. 13 in the County-City Building in downtown South Bend.
Steve Francis, who has advocated for saving the farmland from development, lamented the billions of dollars of taxes that Amazon wouldn’t have to pay while local residents see their own property taxes rise.
A recent Tribune story calculated that about $184 million of property taxes would be abated over time, but that, across 35 years, the technology abatement could approach $4 billion at the very high end.
Costs and benefits: Here’s how much Amazon would save with St. Joseph County tax breaks
But Carl Baxmeyer, president of the Board of Commissioners, pointed out that Amazon would still be “the single biggest taxpayer.”
“They are going to generate millions,” he added.
Both he and commissioner Tony Hazen said that, when asked, Amazon officials pointedly said, if the abatements weren’t granted, they would finish the projects currently under way and then move to another community. Amazon now has four data center shells under construction, whereas they potentially could build a total of 16 shells in the coming years.
Baxmeyer said there is a “lot of philosophical debate over whether any tax abatement should be granted.”
“No, not this commissioner,” Baxmeyer said in support of the abatements. “We are going to move ahead. How do you stand up and ignore the permanent jobs and the construction jobs?” —
Amazon expects to employ about 400 people once all 16 data center shells are built. Officials have cited another 600 full-time workers that third-party contractors would bring to the site.
Commissioner Derek Dieter agreed. Although he said there are good points to both sides of the debate, he sees the revenue and people coming to seek jobs.
Baxmeyer also argued that, although Amazon may have won free land and 100% tax breaks across the U.S., “We offer things they cannot find elsewhere. … That’s why we’re able to negotiate the deal we have.”
Among those things: Data centers need lots of water to cool their computers, and the area’s generous Kankakee Aquifer provides that.
Dieter asked Bill Schalliol, the county’s executive director of economic development, if results from Amazon’s groundwater monitoring wells — which the company pledged to install as part of the abatement — would be shared with the public.
Schalliol replied that they “certainly could.”
But Dieter insisted, “I think that should be published.”
What we reported in June: Can our aquifer support big water needs of Amazon and EV plant?
New Carlisle resident Dan Caruso, a frequent town advocate, argued that a majority of the “community enhancement” revenue should go to support the town and its surroundings because residents’ lives have been “invaded and overturned” by the massive development.
Earlier on Tuesday morning, the county’s Redevelopment Commission also approved the community enhancement agreement.
Details of the tax abatment
As The Tribune has reported, Amazon is seeking a 50% property tax abatement for 10 years on each of the 16 or so data center “shells” that it plans to build in the coming years. These are 216,000-square-foot structures.
In the end, the county would collect an estimated $1.15 million per data center shell each year and give up the same amount in taxes, Schalliol said.
Four shells could be built in this initial year, meaning a yield of $4.6 million in taxes in the first full year. Schalliol said it’s uncertain how soon the other shells would be built in coming years.
But, over time, the county would abate about $184 million in property taxes alone.
South Bend Tribune reporter Joseph Dits can be reached at 574-235-6158 or jdits@sbtinfo.com.
