Fulton board to consider $75M tax break for gigantic data center

Meeting agenda also includes a requested $6M tax break for an apartment development near the Beltline in Peoplestown
A look inside one of Microsoft’s Azure data centers. (Courtesy of Microsoft)

Credit: Microsoft

Credit: Microsoft

A look inside one of Microsoft’s Azure data centers. (Courtesy of Microsoft)

A Fulton County agency will consider Tuesday granting a large tax break for a massive data center campus, a type of development that has become commonplace across metro Atlanta while generating concerns of overloading Georgia’s power grid.

An undisclosed developer is asking the Development Authority of Fulton County (DAFC) for roughly $75 million in tax savings over the next decade for a hyperscale data center campus in Union City, according to the authority’s agenda. The agency, also known as Develop Fulton, has faced intense scrutiny for doling out tax savings to developers in hot neighborhoods and for incentivizing data centers despite their proliferation in the Atlanta area.

Data centers are large warehouses that store computer servers and are necessary infrastructure for digital file storage and artificial intelligence. In metro Atlanta, they’re considered “hyperscale” when they employ at least 25 workers and involve at least $250 million of investment.

Dubbed “Project Steamboat,” the Union City proposal is a $1.8 billion project consisting of three data center buildings that will employ about 50 workers, according to a DAFC fact sheet. The project site is vacant land at 4810 Stonewall Tell Road, which is near South Fulton Parkway.

The requested tax incentive would help offset “the significantly excessive $43.5 million site development costs” and other topography challenges, the fact sheet said. The developer said it is considering three or four other locations outside of Fulton County, which is why the tax savings are needed.

DAFC spokeswoman Daniella Sandino told The Atlanta Journal-Constitution that the incentive would level the playing field against those competing sites. She added that some of the other locations would not have sales taxes for electricity usage, unlike Union City, which is estimated to total about $50 million.

DAFC estimates local governments will collect $198 million in taxes from the project over the next decade despite the potential tax abatement.

“Develop Fulton remains committed to placing an intentional focus on supporting the South Fulton region.,” Sandino said in a written statement. “Bringing more than $198 million in tax revenue to the various taxing jurisdictions for this (project) would be catalytic for this community.”

She added that Union City Mayor Vince Williams is “very supportive” of the project.

The authority has provided tax incentives to multiple data center projects, facing criticism given the sector’s rapid growth. Its board in January approved a $10 million tax break to X Corp., formerly known as Twitter, for equipment that was already being installed in an existing data center. Last September, the board approved $32 million in tax savings for a data center project at Tilford Yard in Atlanta.

Aerial photograph shows Tilford Yard where Edged Atlanta’s Tilford Yard location will be located, Friday, December 5, 2024, in Atlanta. Edged Atlanta at Tilford Yard: 1968 Marietta St. NW, Atlanta. Last September, the Development Authority of Fulton County approved $32 million in tax savings for a data center project at Tilford Yard in Atlanta. (Hyosub Shin / Hyosub.Shin@ajc.com)


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Atlanta has emerged as an unrivaled market for these facilities. Since 2023, data center construction in metro Atlanta has increased 211%, which is the fastest among major data center markets across the country, according to real estate services firm CBRE.

The rush of data center development has sparked pushback from some communities and lawmakers over their strain on local utilities, consuming copious amounts of water and electricity. State regulators in April allowed Georgia Power to expand its electricity-generating capacity — mostly powered by fossil fuels — mainly due to the vast number of data center projects being built or in the pipeline across the state.

This year, state lawmakers passed a suspension of the state sales tax break program for certain large data centers. The bill’s sponsors said the incentive program isn’t giving the state much financial return on its multimillion-dollar investment. But Gov. Brian Kemp vetoed that measure earlier this month, saying a suspension would be abrupt, especially since the state Legislature two years ago extended the program until 2031.

Also Tuesday, the DAFC board will consider a $6.3 million tax abatement for a 402-unit apartment development at 99 University Ave. SW in Atlanta’s Peoplestown neighborhood. Located near the Atlanta Beltline, the five-story building was proposed by CH Southside Trail LLC, an affiliate of Mill Creek Residential, and is estimated to be a $133 million development.

Sandino said the site is a dilapidated former trucking facility that has undergone multiple failed redevelopment attempts. She said the incentive will help bring affordable housing to the neighborhood and help the developer with infrastructure improvements, including new Beltline access paths and sidewalks.

The project will reserve 15% of its units — 61 in total — for tenants whose income is 80% or less of the area median income (AMI). That’s the minimum required for new residential projects near the Beltline, but the developer will make those units affordable in perpetuity rather than the 20 years required by city law.

Peoplestown has one of the city’s highest poverty rates at nearly 39%, and the average income level in the neighborhood is about 45% AMI or $38,571 per year, according to the fact sheet.

The affordable units are estimated to cost the developer nearly $7.5 million, according to the DAFC fact sheet. The project includes 25 full-time jobs and is estimated to generate $16.5 million in additional taxes during the next 10 years despite the proposed tax abatement.

The DAFC meeting will be streamed at 2 p.m. Tuesday. The public can access the Zoom meeting at https://us02web.zoom.us/j/86964032025?pwd=SFRzWFVKMUwzUGdLYmFFejQwci9RQT09.