Expressing their passionate support for the project, St. Joseph County Commissioners on Tuesday unanimously approved a 50 percent property tax abatement for Amazon’s $11 billion data center near New Carlisle.
The ten-year tax break includes Amazon’s commitment to contribute to funds that support local students, fire and county police, green spaces, roads, water and sewer infrastructure, and other “community improvements.”
The tax abatement, along with an 85 percent tax abatement for 35 years on the technology, which will make up a large portion of the project’s cost, will go before the County Council for a final vote on Tuesday, August 13, at 6 p.m. in the County City Building in downtown South Bend.
Steve Francis, an advocate for saving farmland from development, lamented the billions of dollars in taxes that Amazon is avoiding paying while residents’ property taxes are rising.
A recent Tribune article calculated that the property tax reduction would be about $184 million over time, but that the technology reduction could peak at $4 billion over 35 years.
Costs and benefits: This is how much Amazon would save with tax breaks in St. Joseph County
However, Carl Baxmeyer, chairman of the Board of Commissioners, stressed that Amazon remains “the largest taxpayer.”
“They will generate millions,” he added.
Both he and Commissioner Tony Hazen said that when asked, Amazon representatives specifically stated that if the tax abatements were not granted, they would finish the projects currently underway and then move to another municipality. Amazon currently has four data center buildings under construction, while they may build a total of 16 buildings in the coming years.
Baxmeyer said there was “a big philosophical debate about whether a tax cut should be given at all.”
“No, not this commissioner,” said Baxmeyer in support of the tax cuts. “We will move forward. How can you resist this and ignore the permanent jobs and the jobs in the construction industry?” —
Amazon expects to hire around 400 new employees once all 16 data center buildings are completed. Officials say an additional 600 full-time employees will be brought to the site by external contractors.
Commissioner Derek Dieter agreed. While he said that both sides of the debate had good arguments, he saw the revenue and the people coming to look for work.
Baxmeyer also argued that while Amazon has secured free land and 100 percent tax breaks across the U.S., “we offer things they can’t find anywhere else. … That’s why we’re able to negotiate the deal we have.”
Among other things, data centers require large amounts of water to cool their computers, and the region’s generous Kankakee Aquifer provides this.
Dieter asked Bill Schalliol, the county’s executive director of economic development, whether the results of Amazon’s groundwater monitoring wells – which the company had promised to install as part of the remediation effort – would be made available to the public.
Schalliol replied that they “certainly could.”
But Dieter insisted: “I think this should be published.”
What we reported in June: Can our aquifer meet the huge water needs of Amazon and the electric car factory?
Dan Caruso, a New Carlisle resident and frequent city representative, argued that much of the revenue from “community development” should benefit the city and its surrounding areas because residents’ lives have been “invaded and turned upside down” by massive development.
Early Tuesday morning, the district’s redevelopment commission also approved the community improvement agreement.
Details on tax reduction
As The Tribune reported, 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.
Ultimately, the county would collect an estimated $1.15 million annually per data center shell and lose the same amount in taxes, Schalliol said.
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.
South Bend Tribune reporter Joseph Dits can be reached at 574-235-6158 or [email protected].
