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    • Tax reduction for Amazon is approved by the Council I&M talks about electricity demand
    Idaho

    Tax reduction for Amazon is approved by the Council I&M talks about electricity demand

    Madoc Meredith Posted on

    The St. Joseph County Council on Tuesday gave its final approval, by a vote of 7 to 2, to generous tax breaks for Amazon’s $11 billion data center near New Carlisle.

    And it raised public questions and answers for the first time about how Indiana Michigan Power will manage to supply the data center with the enormous amount of electricity it needs.

    Amazon will receive a 50 percent property tax rebate for 10 years and an 85 percent tax rebate for 35 years on the technology, which will make up a large part of the project’s costs.

    As part of the agreement, Amazon will contribute to funds to support local students, fire and county police, green spaces, roads, water and sewer infrastructure, and other “community improvements.”

    Costs and benefits: This is how much Amazon would save with tax breaks in St. Joseph County

    All of this was reflected in four measures, each of which the Council passed by a vote of 7 to 2, with Mark Root and Amy Drake voting against.

    Drake herself wondered whether the project would have been possible without tax incentives. She pointed to the construction work already underway at Amazon and said: “In fact, it is already there.”

    County commissioners had previously stated that Amazon had explicitly stated that without the tax breaks, the company would first complete the shell of its current four data centers and then expand elsewhere.

    Data center companies like Amazon, Drake argued, need to move quickly to keep up with demand for AI. She cannot accept the “massive” 85 percent cuts to the technology that will last “for a long time” – and the 400 jobs that come with it are “not a lot,” she said.

    However, Councilman Bryan Tanner pointed to the wages he estimated would accrue over time for the data center’s 400 employees once all 16 building shells are completed, which would be spent locally, he said.

    Councilman Joe Thomas, whose district includes New Carlisle, was among those raising questions about I&M: Does I&M have enough power? And, as someone else asked, would Amazon’s power demands cause blackouts for other customers?

    Mona Livingston, a South Bend-based external affairs manager for I&M, said there will be no power outages. And, she added, Amazon’s demand will not cause other customers to raise prices.

    Livingston said I&M has been in planning discussions with Amazon and will treat its needs separately. To serve Amazon, I&M plans to initially buy electricity wholesale from other suppliers and then add power plants, including solar, in the coming years. But, she said, it’s too early and the utility still needs to figure out where and how close those plants would be regionally.

    “It’s an opportunity and a challenge,” she told The Tribune.

    Commissioners give their approval

    Previously, St. Joseph County members had already expressed their fervent support for the project and agreed to a 50 percent reduction in property taxes and community expansion fees.

    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.

    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,” Baxmeyer said 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.

    What we reported in June: Can our aquifer meet the huge water needs of Amazon and the electric car factory?

    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.”

    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.

    On Tuesday morning, the county’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].

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    Madoc Meredith
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