By a 4-2 vote the Warrenton Board of Aldermen approved the Chapter 100 plan that includes a 75-percent personal property tax abatement for Crusoe for the data center project to be built in the city.

After a brief question and answer period with Mark Grimm with Gilmore & Bell, who prepared the Chapter 100 documents, and a representative from Crusoe, the board voted in favor of the proposed abatements with aldermen Brandon Lang, Scott Schulze, Jack Crump and Larry Corder voting in favor of the measure and aldermen Christine Wait and Roger Romaker voting against the measure.

The proposal approved by the board calls for $85 billion in bonds. Under the terms of the agreement, the company will begin installing equipment, which will consist of computer servers and processors, in the spring of 2027 and anticipate turning over the equipment to the city before Jan. 1, 2028. Under the terms of the agreement, if the equipment is turned over after Jan 1, 2028, but before Jan 1. 2029 the first year of any abatement would be 2029 and the company would pay 100 percent of any personal property taxes due and owing in 2028.

According to the cost-benefit analysis, the company anticipates that the cost of equipment for the facility will be approximately $8.366 billion. The company also anticipates expending approximately $8.25 billion every six years to replace outdated equipment.

The project is anticipated to be completed in two phases, with one 800,000-square-foot building and the 40,000 square foot administrative building being completed by 2027 and a second 800,000-square-foot building being completed in 2028. The data center will be built just north of the Warrenton West overpass.

The terms of the 75-percent abatement call for a 15-year abatement period unless extended by the company for an additional five years. The total term of the abatement period therefore would run from 2028 to 2047. The terms would require the company to pay 25 percent of the personal property taxes that would otherwise be due on the project for all taxing districts other than the Warren County Ambulance District and the Warrenton Fire Protection District, which are anticipated to opt-out of the arrangement and therefore receive 100 percent of their personal property tax collections. 

Prior to the final vote on the matter several members of the public spoke both for and against the data center proposal.

Resident Michael Hill asked the board to consider how it will invest the large amount of dollars that could be coming into the community as a result of the data center recognizing that the funds provided will not last forever. He also urged the board to have the residents of the community involved in the process regarding how to spend the monies received.

Resident Josh Chandler, who was recently elected in the April 7 election to take Schulze’s place on the board, said that a 75-percent abatement is too high in his opinion. He also said he was concerned that the agreement did not outline who is responsible for disposal of any of the equipment in the data center at the end of the term of the abatement or if something happens to the company occupying the facility prior to that date. He also voiced concerns about the community benefit payments to some of the entities being predicated upon Crusoe obtaining a state sales tax exemption for the project.

Resident Jess Sutton said she believed that the board discussed matters pertaining to the agreement in illegal closed sessions. She also voiced concerns that Chandler, who is now officially the winner of the race for Ward II, was not sworn in prior to the meeting as the election results are now official.

Warren County R-III School Superintendent Greg Klinginsmith spoke in favor of the abatement, saying that the funds the district will receive is a tremendous amount of revenue for the district. He said that with the funds under the agreement, the district can pay more competitive wages and build the facilities the district needs to build.

Resident Renee Lambert said she felt Crusoe was asking for an exorbitant amount in abatements. She said she also thought that environmental studies done by Crusoe should be given to the public.

Resident John Cornell, who also serves on the Warrenton Planning and Zoning Commission, spoke in favor of the abatement. He said that while no one is jumping for joy over the thought of an abatement, the real question is whether the city is in favor of approving abatements for any project, not just a data center project.

Resident Anna Farrar described the proposed agreement as outrageous. She said the community benefits agreements within the proposal are of no real benefit to the community as they are contingent on Crusoe receiving state sales tax exemptions first. She also said that the bond documents do not obligate Crusoe to conduct an entire buildout of the facility and that the entire process has not been transparent. She also noted that the whole goal of artificial intelligence data centers is to eliminate jobs.

The board also heard from Dorian Cole, who spoke of potential legal liability from the Chapter 100 agreement and urged the city to enact a six-month moratorium before finalizing the arrangement. Cole voiced concerns about the proposed facility creating a heat island based upon a study published in late March suggesting that data centers can spike temperatures in the surrounding area as much as 16 degrees.

Grimm briefly went through the scope of the Chapter 100 agreement. In response to the question about what would happen if Crusoe were to go bankrupt or at the end of the term, he noted that the agreement would require all equipment to be removed from the facility and would not be the city’s responsibility to dispose. He also noted that the agreement gives the city broad legal protections to protect against liability on the city’s behalf.

The board also heard from Crusoe representative Conor Bates who answered several of the questions brought up by residents during the public comment portion. Bates said that the company had performed environmental studies through the company Kimley-Horn, but that they were under a confidentiality agreement with the owner of the property and therefore could not disclose those studies, but assured the board that Crusoe is following “best practices” with respect to those studies. Bates also said that the company has performed a geotechnical analysis of the site and believes the risk of contamination is “extremely unlikely.”

With respect to concerns about a heat dome from the data center, he said the study relied on by Cole has not been peer reviewed and focused on land surface, not ambient temperatures in the air. He said the system used by Crusoe would not produce hot humid air nor significantly affect the surrounding area enough to create a heat dome.

Besides the abatement, Crusoe agrees to provide a series of other payments under a community benefit agreement with the city of Warrenton. The payments include $2 million payable within 30 days after the issuance of the bonds and $2 million payable upon the earlier of the one-year anniversary of the issuance of the bonds or Dec. 31 of the calendar year in which the first item of equipment is conveyed to the city. The payments also include $5 million to the Warren County Emergency Services Board payable 12 months after the company receives state approval for participation in the Data Center Sales Tax Exemption Program. Additionally the emergency services board would receive an additional $5 million 24 months after approval and $20 million in annual installments over the subsequent 13 years.

The Warren County Sheriff’s Department would receive $3 million annually for 15 years beginning 12 months after approval of the state’s sales tax program.

The Warrenton Fire Protection District would receive $250,000 payable within 30 days after the issuance of the bonds and the Warren County R-III School District would receive $100,000, also payable within 30 days after the issuance of the bonds.

Based upon figures provided by the cost-benefit analysis, if the abatement proceeded for 20 years and both phase one and phase two of the project are completed, the cost of the abatement would be in excess of $1.6 billion relating only to personal property taxes. Based upon the calculations presented in the document, the anticipated revenue with no abatement would be $2,838,161,504 over 20 years. The actual payments received for local taxing districts would be $1,172,806,819, while the abatements would total $1,665,354,685.

Respectively over the 20-year abatement period, the state of Missouri would receive $3,321,144, with an abatement of $9,963,433. The city of Warrenton would receive $47,348,450, with an abatement of $142,045,349. Warren County would receive $4,085,008, with an abatement of $12,255,023. Warren County Development District Board would receive $16,229,326, with an abatement of $48,687,978. Warren County R-III would receive $445,918,998, with an abatement of $1,337,756,994. The Warren County Ambulance District would receive its full projected tax of $197,143,136, while the Warrenton Fire District would receive its full projected tax of $420,545,454. Warren County Road and Bridge fund would receive $17,878,828, with an abatement of $53,636,483. The Scenic Regional Library would receive $20,336,475, with an abatement of $61,009,424.