The company behind a potentially massive $714.8 million data center in Gallatin, believed to be Facebook, could receive property tax breaks for at least 20 years, according to an economic development incentive package being considered by city leaders.
As part of the proposed payment in lieu of tax (PILOT) program for Project Woolhawk, the unnamed company would receive an annual tax abatement for each of the up to six buildings in the proposed development.
A total of $1 million would be collected for the first building and equipment each year, followed by additional payments in varying amounts that would decrease from $750,000 to $550,000 for each of the subsequent buildings, according to the agreement. The combined annual payment would also increase by 5 percent every five years.
All of the buildings would receive a tax abatement for 20 years regardless of when they are completed. However, all must be constructed within 20 years of the initial building date in order to qualify.
According to an economic impact analysis study completed by Younger Associates, the tax incentive would total $19.5 million for both phases of Project Woolhawk while the local tax benefit would be $62.7 million.
The project would also create 40 direct jobs with an average annual salary of $80,000 along with 100 contract jobs with an average annual salary of $50,000, according to the analysis.
Currently, the city and county collect $8,974 in combined taxes each year from the now vacant property, according to data from the Gallatin Economic Development Agency.
In all, approximately 809 acres of privately-owned property is being considered for the project, which would be located north of Hartsville Pike between Roundtree Drive and Brights Lane.
“The City of Gallatin decided three years ago with the adoption of its strategic plan to compete globally for the jobs and capital investment that Fortune 100 technology companies can bring to the community,” Gallatin Economic Development Agency Executive Director James Fenton said. “That strategy is working, and we are currently being considered for a significant data center project. This PILOT agreement will help make our community competitive while also adding much needed revenue to our tax base.”
The Gallatin City Council is scheduled to vote May 19 on a resolution that would allow the Gallatin Industrial Development Board (IDB) to issue the proposed PILOT agreement. No county approval is needed, according to Fenton.
If approved, payments would be made annually to the IDB, which would keep $50,000 during the first year to pay for administrative costs while the remaining amount would be distributed to the city and county. Overall, Gallatin would receive approximately one-third of the money collected while Sumner County would receive the rest.
“I’m not against this project coming whatsoever, but we’re sure giving up a… bunch of stuff because we think it sounds good,” Vice Mayor Steve Camp said during a committee meeting Tuesday before voting to move the resolution on for a vote next week. “I don’t see where we’re getting a whole lot.”
No additional incentives are being offered to the company at either the local or state level, according to Fenton. The company would also pay for all water, sewer and road infrastructure associated with the development – more than $13.5 million in total – along with $2.4 million in city permit and inspection fees.
“In this case the city is not giving away land, we’re not building roads (and) we’re not contributing to their infrastructure,” Mayor Paige Brown said during the meeting. “I feel like this company is actually stepping in here with some pretty generous offerings and could have made a lot of demands.
“This is revenue that we are going to realize that we would not have realized without this project.”
While city officials have not been told who the company is, multiple sources involved with the site selection search have told the Gallatin News in recent months that the company is believed to be Facebook. The individuals spoke to the newspaper under the condition of anonymity because they were not authorized to speak publicly about the project.
On Monday, the Gallatin Planning Commission is scheduled to vote on whether to approve a proposed change to the community character area designation for 647.46 acres of the property for the project. A request to rezone the land to industrial restrictive and annex it into the city limits will also be considered for recommendation to the city council.
Founded in 2004, Facebook has 15 data centers either in operation or planned around the world including multiple ones across the United States, according to the company’s website. The facilities contain servers that store digital information to support the social media giant’s various digital platforms such as photo and video sharing app Instagram and internet messaging service WhatsApp.