The St. Joseph County Council will vote on August 13 to give final approval to tax abatements for Amazon’s $11 billion data center project near New Carlisle. The tax abatements are 50 percent on real estate and 85 percent on technical equipment.
In return, Amazon will be willing to pay thousands of dollars for fire services, parks, “student success,” landscaping, and other “community improvements.”
On August 13, the agreement on these fees will be presented to both the St. Joseph County Commissioners at 10 a.m. and the County Council at 6 p.m. in the County-City Building downtown.
The public can read the individual agreements in the meeting folder for the council meeting.
As The Tribune reported in May, Amazon is seeking a 50 percent property tax abatement for the next decade for each of the roughly 16 data center buildings the company plans to build in the coming years. These are 20,000-square-foot buildings.
What we reported in June: Can our aquifer meet the huge water needs of Amazon and the electric car factory?
Ultimately, the county would collect an estimated $1.15 million annually per data center building and pay the same amount in taxes, said Bill Schalliol, the county’s executive director of economic development.
Four shells could be built in the first year, which would generate $4.6 million in tax revenue in the first full year. Schalliol said it is uncertain how soon the other shells would be built in the coming years.
But over time, the county would save about $184 million in property taxes alone.
Reduction of technology
The council will also vote on an 85 percent tax exemption for computer hardware, cables and other technical equipment – the heart of these data centers – for 35 years.
At the maximum, Schalliol estimated, the county would collect $1.4 million in taxes and save about $7.2 million annually per data center enclosure.
If all 16 building shells are built, that would result in a total savings of $115.6 million per year on technology. Over 35 years, if Amazon’s operations continue that long, that would be nearly $4 billion.
Schalliol warned, however, that these values will rise and fall from building to building and year to year. For one thing, technology loses value so quickly and will likely need to be replaced every few years. Plus, he said, the costs will vary for each generation of technology.
To qualify for the technology levy, the state requires that the workers Amazon employs on-site must earn at least 125 percent of the county average wage, meaning they must earn at least $30.74 an hour. Amazon expects to employ about 400 full-time workers when the 16 shell buildings are fully constructed, which could take several years.
And that would include about 600 additional full-time workers who would be brought to the construction site by outside contractors, Schalliol said.
Amazon agrees to fund “community improvements”
The Community Improvement Agreement requires Amazon to pay the county the following amounts, all as one-time fees:
∎ There would be a separate fee each for fire services, “student success projects” and “park/green space projects.” Schalliol said the county is still undecided on how it would allocate the money for students and green space. For each of the three fees, Amazon would pay 10 cents for each square foot of data center shell it builds, payable once the structure is erected. If all 16 shells are built, that would mean $345,600 for each fee.
More from our June report: Are there enough protections in place to keep the water in New Carlisle clean despite industrial growth?
∎ $25,000 would go towards landscaping with native plants and animals or pollinators.
∎ $120,000 would go to the county police department to offset costs associated with construction traffic.
∎ A total of $43,500 would go toward improving water quality. That’s a fee of $50 for each of the 870 acres Amazon owns.
∎ Up to $7 million would help the county build a new interchange at the nearby intersection of Indiana 2 and Larrison Road.
∎ $450,000 would help with professional services such as legal fees.
∎ Amazon would conduct and pay for fire drills for regional fire departments.
∎ Amazon would pay for roadway reconstruction and other road improvements to be specified in a separate road improvement agreement.
∎ Amazon would pay $114 million to help expand water and wastewater infrastructure, as outlined in a separate agreement that commissioners recently approved. It also allows Amazon to collect $11.44 million for each industrial customer that moves into certain nearby areas and uses more than 400,000 gallons of water per day.
∎ Amazon would install monitoring wells at its project sites, including four wells on each of three properties. Samples would be taken twice a year for at least five years after work begins and tested for water depth and quality. Amazon would also submit quarterly water depth reports to the county and city of New Carlisle. This is important because Amazon is expected to use enormous amounts of water for computer cooling. The city, county and Amazon have agreed to limit the total amount of water withdrawn from two water treatment plants in New Carlisle to 24 million gallons per day to supply Amazon and other industrial projects.
South Bend Tribune reporter Joseph Dits can be reached at 574-235-6158 or [email protected].
