Montgomery County Commission finalizes 70% tax break for Google data center

The Montgomery County Commission voted unanimously on June 8 to approve the abatement agreement for the Google data center located at 656 Tree Farm Road.

The agreement calls for a 70 percent abatement of personal property taxes, with the company paying the remaining 30 percent in the form of payments in lieu of taxes (PILOT).

The plan, as drafted, states that Montgomery County intends to issue taxable industrial revenue bonds in an amount not to exceed $100 billion.

Under the terms of the proposed abatement agreement, Kinetic Site Ventures LLC, a subsidiary of Alphabet Inc. and an affiliate of Google, is the primary party to the agreement with Montgomery County.

The abatement agreement is scheduled to last for 25 years.

According to a cost-benefit analysis provided to describe the agreement, Google estimates that total acquisition of equipment for the project will be between $56 billion and $87.5 billion, defined as the low and high scenarios. The company initially plans to invest $500 million in equipment in 2026, approximately $7 billion in 2027, $7.6 billion in 2028 and $9.4 billion in 2029. Every six years thereafter the company plans to spend between $3.5 billion (low) and $7 billion (high) to replace outdated equipment.

Currently the assessed valuation of personal property at the site location is $0. The total assessed valuation of equipment in 2027 is estimated to be in excess of $1.8 billion. By anticipated completion of the project in 2029, the estimated valuation is expected to be in excess of $4.6 billion.

As part of the agreement, which will run from 2028 to 2052, Google is expected to pay 100 percent of the real property tax assessed on the property.

The plan calls for Google to transfer the project equipment to the county, which the county will then lease back to the company. This will not occur until 2027. Because of that, Google will have to pay 100 percent of the personal property taxes on any property it owns at the site on Jan. 1, 2027, which is estimated to be approximately $7,370,293.

In exchange for the abatements, Google will make an annual payment of $5 million for each completed data center building at the site (they are anticipating completing two buildings). The $5 million will be allocated 80 percent to the Greater Montgomery County Port Authority and five percent will be paid each to New Florence, High Hill and Wellsville-Middletown R-I and Gasconade County R-I school districts.

As the Montgomery County Ambulance District and the New Florence Fire Protection District have the right to opt out of the abatements, it is believed they will do so and receive 100 percent of their respective personal property tax assessments.

During the meeting Mark Grimm with Gilmore & Bell P.C., told the commissioners that in order to qualify for the abatements Google must staff each data center building with at least 75 employees. Attorney Mark Brady with Polsinelli, P.C., speaking on behalf of Google, said that those permanent jobs must be paid at 150 percent of the county’s current average wage.

Since the abatement proposal affects a number of local taxing districts, those districts were given the opportunity to speak regarding the proposed abatements.

Montgomery County Developmental Disabilities Assistance Board Executive Director Dan Cole said that the impact in tax revenue benefit to the board will be great. He said it is almost difficult to fathom the effect it can have. Cole said that with additional tax revenue there are a lot of things that the board has wanted to provide for its clientele that it could not previously provide. For instance he referenced the ability to hire additional staff, look at the possibility of accessible playgrounds and a general expansion of services.

Montgomery County Health Department Administrator Laura Yelton said she supports the Chapter 100 abatement agreement with Google.

“Public health is very underfunded in the state,” she said, adding that Missouri is the worst state in the U.S. for public health funding.

Yelton said that in order to continue providing the many services the health department already provides they need additional funding. She said the additional funding provides limitless opportunities for the department, which recently completed a community health assessment.

Yelton also spoke about the fact the department is short staffed.
“We have to have nurses,” she said. “It is very difficult to find nurses in a small community when I am competing with the big conglomerates.”

Yelton said the department struggles to find nurses because many nurses want the higher paying jobs at the larger hospitals. Those who do work in Montgomery County do it more because they love the community.

Montgomery County R-II Superintendent Brian White said that the tax revenues from the Google deal would have a huge impact on the district.

“This amount of money is profound,” he said.

White told the commissioners that currently he has a $17.1 million operating budget, but with revenues from Google and the Amazon data center project, it could push the budget to $55 million. He said that this would necessitate a reduction in the tax rate for county property owners.

The meeting also included public comment, with over a dozen residents providing comment, the vast majority opposing the abatement agreement.

Resident Chuck Kueny spoke about abatements provided to Tyson Foods asking the commissioners how that arrangement worked out. He said that data centers were all about the surveillance state, not about helping Montgomery County. He also voiced concerns about how the taxes were calculated as he said he believes a period of hyperinflation is coming.

Resident Jason Grabenhorst also voiced opposition to giving tax breaks to Google. He also spoke about hyperinflation and said that AI data centers are taking people’s jobs and that the facility would probably eventually be staffed by robots.

“I am not for it,” he said plainly.

Resident Lyndsay LaBrier said that she is not opposed to growth, but was concerned about how the determination is being made that this abatement is the best long-term investment for the community. She wanted to know how the priorities reflected in the agreement with Google are determined and how community feedback is being incorporated into the decision.

Resident Gary Hinegardner questioned why abatements weren’t offered to others.

“I don’t remember anyone coming to me and saying, ‘How about some tax abatements,’ ” he said. He spoke directly to Google representatives at the meeting, telling them they have a public relations problem and suggesting perhaps they provide the county funds ($50 million) up front as a show of good faith."

Resident Dave Johnson spoke in favor of the data center. He said he has been in Montgomery County for 75 years and has watched all of the communities in the county go downhill. He suggested that the data center funds could help reverse that trend.

Bill Cope, a local farmer, said he was concerned about the abatements. He said he wasn’t against the schools or other entities getting more money, but he is opposed to any abatements. He said he felt the county should be more transparent with the residents and noted that the issue of data centers has split the community.

Resident Sylvia Kueny said that the entire bond agreement with Google boils down to corporate charity. She asked the commissioners why a multi-trillion dollar company like Google needs charity from a Class 3 county in Missouri. She reminded the commissioners that they represent the will of the people, not the will of large corporations.

After the completion of the public comment portion of the meeting and some follow up information, the commissioners ultimately voted 3-0 to approve the proposed abatement with no further discussion.