A Clayton County agency has granted what is likely to be tens of millions of dollars in property tax savings to a fast-growing data center developer, but declined to make public the deal’s specifics.
The Development Authority of Clayton County on Thursday approved an incentive package to a subsidiary of TA Realty for a $959 million data center project along East Tanners Church Road. The project joins a burgeoning pipeline of data center projects in metro Atlanta, which has emerged as the country’s hottest market for computer storage space.
Data center developments carry large price tags because of the amount of expensive equipment they house, but they usually employ only a few dozen workers and can strain local water and power grids. Incentivizing data centers — especially when they’re so in demand — often draws public scrutiny, particularly when the value of adopted incentives isn’t made transparent.
“The idea of an incentive is to encourage a business to do something that it was not going to do because of some risk,” Kasia Tarczynska, a senior research analyst for left-leaning incentives watchdog Good Jobs First, said. “Data centers are such a massive growth (industry) that there is no reason why state and local governments should provide incentives to this industry.”
Boston-based TA Realty has been pursuing a 180-megawatt data center on this site since last year. The Clayton County Board of Commissioners approved the project’s site plan in a 3-1 vote last October during a meeting with strong resident opposition, according to the Clayton News Daily. TA Realty declined to comment about the project and its requested tax break.
C. Harrison Braddy, chairman of the Clayton County Development Authority, said in the release the tax break is “a competitive incentive to encourage TA Realty to build its data center right here in Clayton County.” He did not respond to interview requests from The Atlanta Journal-Constitution.
The authority declined to disclose the estimated property tax savings that TA Realty is expected to receive during a 10-year abatement period despite multiple requests. Invest Atlanta and the Development Authority of Fulton County, among others, routinely release estimates showing the value of incentive awards to companies.
Clayton County’s authority, which is also known as Invest Clayton, has routinely declined to provide incentive estimates.
“The people of Clayton County deserve to know when their government leaders are giving away tax breaks to companies,” Richard T. Griffiths, a former CNN executive and Georgia First Amendment Foundation board member, said last year when the authority approved a similar tax abatement. “They may well be great investments for the taxpayers, but they deserve to know the exact terms.”
TA Realty will receive a 50% property tax reduction in year one with the amount of taxes gradually increasing each year until the company will be assessed the full tax amount after 10 years. According to estimates calculated by the AJC, TA Realty could receive more than $36 million in savings over 10 years.
The authority also earns a fee for brokering such transactions.
Despite the incentive, the project will likely generate $93 million in new taxes over the abatement period.
“Clayton will begin generating revenue from Day One,” Braddy said. “I believe this is truly a win-win.”
Incentive proponents argue they’re needed to seal the deal on certain projects, which could go to other places instead. Critics, however, argue many of these projects would be built on the same site anyway, amounting to a tax giveaway.
“(The incentive) comes at the end of the process after decisions about locations are already made,” Tarczynska said.
The authority’s release said the project will create more than 700 jobs, but that figure includes temporary construction workers. Once complete, the data center will employ about 30 full-time workers and roughly as many contractor jobs.
The data center is expected to be operational by the end of 2026.
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