Development Authority Approves $10.1 Million Tax Break for X Data Center Expansion
The Development Authority of Fulton County (DAFC) has approved a $10.1 million tax break for the controversial data center expansion by the social media platform X. The approval comes after a previous deadlock on the request, with the board voting 6-2 in favor of granting the tax savings for the expansion.
X, formerly known as Twitter and owned by Tesla CEO Elon Musk, is expanding its data center operations in Fulton County to house computer servers for artificial intelligence work. The company’s investment is estimated at $700 million, with most of the equipment already in Fulton. The tax break will reduce X’s tax bill for the next decade as it continues to operate in the county.
Despite concerns raised by some residents about partnering with a platform accused of promoting hate speech, X representatives emphasized the importance of the tax break to keep their operations in Atlanta. The company threatened to move some of its AI equipment to a data center in Portland, Oregon, if the incentives were not approved.
While the project will not create new jobs, it will retain 24 existing employees at a cost of over $420,000 per job. X project lead Dhruv Batura stated that most of the equipment has already been shipped to the data center, with only $200 million remaining. He mentioned that operating in Atlanta without the tax abatement would be significantly more expensive than in Oregon.
The DAFC has faced criticism in recent years for providing incentives that some believe are unnecessary. However, board member Mike Looney argued that attracting cutting-edge technology like X to Atlanta will benefit the local economy in the long run. He sees X’s presence as contributing to the city’s emerging technology corridor.
Despite concerns about X’s controversies and viability, the DAFC estimates that the project will generate over $16 million in new taxes for Fulton over the next decade. Treasurer Mike Bodker believes that the AI investment has the potential to generate tax revenues beyond the 10-year abatement period.
Before approving the tax break, the DAFC added an amendment to reach an agreement with X for potential educational partnerships, such as an internship program. Board member Kyle Lamont expressed doubts about X’s ability to deliver on community commitments given its past controversies.
The next steps for X’s tax break are uncertain due to challenges to the entire incentive process. The Fulton County Board of Assessors has faced accusations of being a “rubber stamp” for development authority deals, leading to delays in approving appraisal requests.
In conclusion, the approval of the $10.1 million tax break for X’s data center expansion highlights the ongoing debate over economic incentives for tech companies in Fulton County. While some see the tax break as vital for attracting and retaining innovative businesses, others raise concerns about the cost and ethics of supporting companies like X. As the project moves forward, stakeholders will closely monitor its impact on the local economy and community.
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