The Warrenton Board of Aldermen listened to a proposal from Crusoe, the builder of the proposed data center in the city, for an 80 percent personal property tax abatement during a work session Feb. 23.

Crusoe had previously committed to not seeking a property tax abatement for any real property taxes or gross receipt taxes.

During the Monday meeting, Crusoe Vice President of Public Affairs Sara Axelrod again committed to Crusoe paying 100 percent of its real property and gross receipt tax for the data center facility proposed for Warrenton. She said however that the company was looking for an 80 percent tax abatement for personal property taxes for a 25-year period.

According to a slideshow presented during the meeting Crusoe projects that in paying 100 percent of real property taxes and 20 percent of personal property taxes they will pay approximately $176 million per year or $4.4 billion over the 25-year period of the abatement proposal. The real property portion would amount to $68 million per year, while $108 million would be personal property payments each year. The city would also receive an estimated $15.7 million a year for the 25-year period. As part of the deal, Crusoe said they would pay $1.5 billion to the fire and ambulance district over 25 years. Crusoe would also agree to pay $2 million per year for 15 years for emergency services and $3 million a year for 15 years to the sheriff’s department. There would also be a one time payment of $100,000 to the Warren County R-III District to cover the cost for anyone to attend school events free of charge. Crusoe said they would also be willing to provide fire equipment and training to the Warrenton Fire Protection District. Crusoe would also agree to pay $5 million per year as a community benefit grant and would ensure a minimum of 70 full-time employees at an average salary of $100,000 per year.

According to a chart provided by Crusoe, tax revenue generation during the 25-year term would amount to $75 million per year for the school district, $3 million per year for roads, $24 million annually for the Warren County Ambulance District, $48 million annually for the fire department, $23 million annually to the city, $560,000 each year to the state, with the county receiving $3.4 million per year, the Scenic Regional Library District receiving $640,000 annually and the surtax generating $6.6 million in revenues.

Axelrod said that abatements would be necessary to ensure the competitiveness of the site. She explained that the abatements would allow Crusoe to go and market the Warrenton site to one of the “big five” hyperscale companies, which are Amazon Web Services, Microsoft, Google, Meta/Facebook and Oracle.

During construction, Crusoe anticipates up to 2,400 temporary construction jobs on the project.

Following the presentation, the board voiced some concerns regarding the abatement. Mayor Eric Schleuter voiced concerns that Crusoe is intending to seek sales and use tax exemptions under the Missouri Department of Economic Development’s data center sales tax exemption program. He said he also objects to the 25-year time frame, preferring that the timeframe be no more than five years and requiring Crusoe to come back after five years to seek any additional abatements.

Lucas Workman with Crusoe said the longer time frame allows the company to go out and seek the larger hyperscale data center companies to come to Warrenton to be part of the project. Alderman Christine Wait voiced similar concerns, saying that the state’s sales and use tax program would be for a variety of items including materials, equipment and perhaps most importantly utility costs. It was the possible tax abatement from the state for utility costs that also most concerned Schleuter. Noting that for a proposed 400 megawatt site, there would be a lot of revenue that local taxing entities would just not be getting and then Crusoe would also be requesting an 80 percent abatement on personal property taxes.

Some of the other issues discussed included the fact that Crusoe representatives said that any lease they would sign with one of the larger hyperscale data center entities would be for a minimum 15-year term. Alderman Brandon Lang said that Crusoe’s proposed 25-year abatement would therefore be 10 years more than the term of any lease.

Workman said he understood the concern, but that 20-25 year abatement periods are pretty much the standard expectation for the large hyperscale companies.

Wait also voiced concerns about what would happen if Crusoe becomes insolvent during the abatement period. She suggested that there be a specifically designed exit strategy that would protect the city in case that actually happened.

Alderman Roger Romaker also voiced concerns stating, “I feel like a multi-billion dollar company is potentially coming in here and we are a town of 10,000 people, who every one of us pays personal property taxes. I am sorry but it just rubs me the wrong way for that level of company to come here and ask for an abatement when something we as citizens can’t get.”

Alderman Larry Corder then asked whether or not Crusoe had run the numbers without any tax abatements, and Axelrod admitted they had not as no abatements would make the project in Warrenton uncompetitive.

Greater Warren County Economic Development Council consultant Steve Etcher said that the presentation Monday was a general framework for the proposal. He said eventually the city’s bond counsel Gilmore & Bell P.C. would be providing a cost benefit analysis which would model out the entire proposal and provide the aldermen with information regarding what taxes they would be giving up by providing the information specifically requested by Corder. He said once this cost-benefit analysis is provided notice would need to be sent to all of the taxing entities and then after a 21-day period the city could hold a public hearing to discuss the possible tax abatements with all the taxing districts having a say in the proposal. This point was made because Schleuter wanted it to be clear that all the taxing districts would have a seat at the table for any discussion about any proposed abatement.

At several points in the meeting, both representatives from Crusoe and Etcher made it clear that if no abatements occur the data center project faces a high likelihood of not happening in Warrenton.

As the meeting was scheduled as a work session, no action was taken regarding the proposal. Schleuter told the representatives from Crusoe that city officials would need time to review and digest their proposal and also suggested that Crusoe allow the taxing entities affected by the proposal to be able to reach out to them with any questions.