Microsoft is making substantial investments in Atlanta, acquiring over 480 acres for data center development on the city’s southside. The tech giant has paid at least $171 million for these properties, adding to the growing cluster of computer server storage facilities in the region.
The attractiveness of Atlanta as a location for data centers is due in part to topography challenges and substantial electricity usage taxes. These factors make the incentives offered by the developer more appealing, despite criticisms from some quarters.
The Develop Fulton authority, also known as DAFC, has come under fire for providing tax breaks to developers, including those in the data center industry. Critics argue that the voracious demand for data centers does not justify these tax breaks, and many members of the public have voiced their opposition to such incentives.
However, proponents of the data center projects argue that the tax savings are necessary to compete with other potential sites and to offset the high costs associated with building and operating these facilities. Data centers are critical infrastructure for digital file storage and artificial intelligence, requiring significant investments per square foot.
While some argue that companies like Microsoft should pay their full tax burden, others see the potential benefits that these projects can bring to the local community. Union City Mayor Vince Williams, for example, views the data center development as transformational for the city.
Microsoft, which reported $212 billion in sales revenue and $72.4 billion in net income during fiscal year 2023, already operates several data centers in Fulton County. The company’s continued investment in the region reflects the growing importance of Atlanta as a market for data center facilities.
Despite the economic benefits that these projects can bring, data center development has faced pushback due to concerns over their impact on local utilities. These facilities consume significant amounts of water and electricity, leading to strains on resources and environmental concerns.
State lawmakers recently passed a suspension of the state sales tax break program for large data centers, citing a lack of financial return on the state’s investment. However, Governor Brian Kemp vetoed this measure, highlighting the complex balance between economic incentives and fiscal responsibility.
In the case of the recent data center developments in Atlanta, DAFC estimates that local governments will collect $198 million in taxes over the next decade, even with potential tax abatements. The board believes that the immediate benefits to the community outweigh any concerns about tax breaks.
The approval of these data center projects comes with requirements for completion and a timeline for development. The DAFC board has set deadlines for the construction of the full campus, ensuring that these projects move forward in a timely manner.
Overall, the influx of data center development in Atlanta reflects the city’s growing importance as a hub for technology and innovation. While challenges remain, the potential economic benefits and job opportunities offered by these projects are driving continued investment in the region.
https://www.ajc.com/news/business/fulton-board-approves-75m-tax-break-for-microsoft-data-center/Q3K2XGXZD5DGRJUPUB3ENQGB4A/
Source – Atlanta Journal Constitution