The Warrenton Board of Aldermen will be considering a proposal by Crusoe, the developer of the data center project in the city, to abate 75 percent of the personal property taxes anticipated from the project. As previously agreed to by Crusoe, they are not seeking any abatement of real property taxes.
The Warrenton Board of Aldermen moved their normally scheduled April 7 meeting due to lack of a quorum to April 14, and noted in the move that they would be considering a cost-benefit analysis proposal regarding the data center project.
As currently drafted, the proposal calls for $85 billion in bonds under a Chapter 100 framework, meaning that no actual bonds will be issued, acting instead as a paper transaction where the city will take possession of the data center’s personal property and lease the same back to the developer. The bonds will not create any indebtedness on the city’s part and no tax revenues will be used to pay back the bonds. For purposes of the agreement, the company involved in the bond arrangement will be Warrenton DC Owner 1 LLC, an affiliate of Crusoe Inc.
Under the terms of the bond, 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 The company also anticipates expending approximately $8.25 billion every six years to replace outdated equipment.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 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.
In addition, the company 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.
As real property tax revenues would not be abated, the projection is that the company would pay a total of $927,480,463 over the 20 years of the agreement.
