$10M tax break for Elon Musk’s X fails in tie vote by Fulton board

Authority finalized $32M tax abatement for data center at Tilford Yard

A proposed $10.1 million tax break for social media platform X failed to gain enough votes to pass Tuesday amid fierce opposition from Fulton County residents.

The Development Authority of Fulton County (DAFC) board deadlocked on a 4-4 vote on a request for tax savings for the platform formerly known as Twitter.

The DAFC board got an earful from residents opposed to the tax break for installation of new computer equipment — focused on artificial intelligence — at an existing Atlanta data center. The project would not create any new jobs and retain only 24 existing ones. X representatives said if they didn’t get the incentives, they could instead install the equipment in Portland, Oregon.

Dhruv Batura, the X project lead, urged a quick decision, saying the future of X was at stake.

”It is imperative that we move as quickly as possible in order to survive,” Batura said. X sought both preliminary and final approval at the same meeting — a process that usually takes months.

The 4-4 tie vote with one member absent means the board will reconsider at the next meeting unless X withdraws the request.

DAFC, also known as Develop Fulton, has faced intense scrutiny in recent years for granting incentives where critics contend they are not needed.

In recent months, tax breaks for data centers and other industrial projects have raised complaints. Data centers are among the hottest sectors in commercial real estate and the state of Georgia already provides significant financial incentives for developers of such projects to build in the state. Still, the board approved a separate $32 million tax break Tuesday.

“Atlanta is a great location for data centers, and it would be fiscally irresponsible to offer incentives,” Fulton resident Doug Abramson wrote the board. “Tax revenues are precious and need to be used for projects that otherwise would not occur.”

The authority has approved nearly $112 million in tax breaks across eight projects in 2023.

An e-X-pensive debate

Elon Musk, the world’s richest man, bought Twitter last year, subsequently rebranding it as X and announcing investments in emerging technologies and AI.

The company’s AI startup called X.AI has already raised more than $130 million from investors, and X filed federal paperwork Tuesday that it plans to raise up to $1 billion for the endeavor.

X proposed a $700 million investment at Qualified Technology Services’ data center off Jefferson Street that DAFC officials said would generate more than $16 million in new tax revenues over the next decade despite the requested incentive. Batura added that it would place Atlanta at the center of the company’s AI evolution.

Censorship and political bias were brought up multiple times during the meeting, all common phrases and complaints Musk has levied against his competitors. Musk recently sparked an advertiser boycott against X by endorsing an antisemitic post on the website, prompting a profanity-laden rant last week where he said the exodus could kill the company.

DAFC member Laura Kurlander-Nagel questioned X’s financial health and whether X was worth supporting with county tax dollars.

“It is a privately held company that is owned by the richest man in the world,” she said. “... It’s (worth) less than half of what it was when he first purchased it. To me, that’s a huge concern.”

Mike Bodker, the board’s treasurer, countered that Musk could “continue to prop up the company for as long as he wishes.”

Brian Huard, site director, gives a tour of the inside QTS’s Atlanta Data Center Campus in Atlanta on Aug. 31, 2022. QTS Mega Data Center campus, featuring its own on-site Georgia Power substations and direct fiber access to a wide variety of carrier alternatives. (Hyosub Shin/Atlanta Journal-Constitution/TNS)

Credit: TNS

icon to expand image

Credit: TNS

Batura said X has shut down two other data centers as part of its recent cost-cutting efforts, but he said the company is looking to quickly get its AI technology online, regardless of the requested tax incentive.

“Transparently, it’s very likely that we would start to put in some of these assets in the existing location (in Fulton County),” he said.

Bodker and state Sen. Brandon Beach were joined by Pinky Cole and Kwanza Hall in voting for X’s requested tax break, while Kurlander-Nagel, Chair Marty Turpeau, Secretary Kyle Lamont and Erica Long voted against it.

Tax breaks for computers

Another data center project received the board’s support Tuesday despite residents’ concerns.

DAFC gave final approval to a $32 million tax break for Edged Energy’s server farm at Tilford Yard. The former rail yard was previously owned by CSX and was exempt from taxes. The board gave preliminary approval to the request in September.

Edged representative Alan Richardson said the data center campus will generate nearly $69 million in new taxes over the next decade. But seven residents who spoke during the meeting argued the data center would likely be built regardless of the tax incentive.

Jim Martin, chairman of Neighborhood Planning Unit D, which includes the project site, said the developer should not have paid $94 million to buy the site if its plans were not financially feasible.

“If it actually required incentives in order to redevelop or faced any serious development challenges, the sales price of the land would have certainly reflected this,” he said.

This is a rendering of a proposed data center by Edged Energy.

Credit: Development Authority of Fulton County

icon to expand image

Credit: Development Authority of Fulton County

About the Author