Rachel Gonzalez did not foresee becoming an opposition leader to what could be the largest economic development project in the history of Independence, Missouri.
She is a lifelong resident, living just a few miles from a proposed hyperscale data center site. She knows and voted for several of the council members who will decide whether to give tax abatements to the project — a vote that may ultimately decide the fate of the “AI factory.”
When she first heard about the data center late last year, she assumed the more she learned, the better she would feel about it.
The opposite happened.
So in early January, Gonzalez became co-administrator of a Facebook group called Stop the AI Data Center in Independence. Within weeks the group has grown to nearly 2,500 members.
She’s since become a vocal critic with a lengthy list of concerns and unanswered questions. Near the top of her list is the hasty civic process before a vote to give a 90% tax abatement on up to $150.6 billion in investment for the data center campus over 20 years.
Independence City Council is expected to vote on the issue March 2. Approval would mean the data center developer would pay a fraction of what the taxes on buildings, land and equipment would be without tax abatement — paid in the form of PILOT (payment in lieu of taxes) fees.
The abatements represent a $6.26 billion tax break spread out over 20 years for Nebius — a technology company headquartered in Amsterdam, Netherlands, that’s behind the project. Nebius builds and operates large-scale cloud computing infrastructure — what the company calls “AI factories.” The company wants to make the Independence campus its U.S. flagship facility.
Proponents of tax abatements for the data center say the site is currently underutilized, that tax abatement is not uncommon and that it is needed to draw such a large investment to the city. They point to the $651.5 million in total PILOT fees projected over 20 years as much-needed revenue for the area.
“The City Council is blinded by the potential dollar signs that this project could bring,” Gonzalez told The Beacon. “People don’t want to see a billion-dollar corporation receive a massive tax abatement while the rest of us have to pay our fair share.”
Public debate has swelled since the city announced the project in December.
Council chambers overflowed as dozens lined up and told elected officials what they thought about the data center over nearly four hours during a Feb. 16 public hearing. While the majority spoke in opposition, the project has the backing of the Independence Chamber of Commerce, several local labor leaders and the Independence School District, whose school board passed a resolution supporting the project.
“The proposed AI data center represents commercial development at a scale unprecedented in our community,” said the school district’s interim superintendent, Cindy Grant. “… The Independence School District is projected to receive approximately nearly half a billion dollars. That level of projected revenue represents a significant and transformative financial benefit to our district.”
Many residents remain skeptical of the plan even as the city officials say that taxpayers have protections in the agreement. Representatives for Nebius say that the reduced tax burden is needed while several residents feel the city isn’t asking for enough.
“We should not be settling for less overall revenue if we really care about funding our community,” said resident Stephanie Robinson during a public hearing. “Economic development should not mean corporate welfare.”
Independence data center details
Nebius wants to build the Independence data center campus on 398 acres near Route 78 and Little Blue Parkway. For scale, imagine walking around a perimeter that is 2.5 miles.
When fully built the campus would be roughly 2.1 million square feet across multiple buildings. Nebius wants to eventually build out to 1.2 gigawatts of energy capacity — annually that’s the rough equivalent to the electricity produced by the Hoover Dam in 2.5 years.
To help power it, the city has already approved a separate but linked power plant project. A private firm called Independence Power Partners will revive the city’s retired Blue Valley power plant site near the proposed data center campus.
According to planning documents, the first phase of the data center would demand 225 megawatts. Phase two expansion will require 800 megawatts. Nebius is examining how to bring an additional 200 megawatts of power generation on-site in the future.
The data center project will use a closed-loop cooling system to keep computer chips from overheating. Unlike older data centers that rely on open-loop evaporative cooling — where water continuously enters the system and is lost to evaporation — the closed-loop design uses a sealed piping system where a fixed volume of fluid circulates continuously.
Nebius says that after a large initial fill of 1.4 million gallons per 200-megawatts building, it will require a 20% replenishment a year.
Beyond the technical specifications, Nebius has published a community benefits plan — though it carries no binding contractual weight under the city agreements.
According to the company’s fact sheet distributed to the council, benefits include:
- STEM and AI literacy programs for the Independence and Fort Osage school districts.
- Apprenticeships and lab equipment donations.
- A partnership with Metropolitan Community College using the company’s TripleTen coding platform.
- Support for Independence police and fire departments through training and equipment funding.
- Conservation programs for the Little Blue River.
- Organized employee volunteer days with local nonprofits.
- A community engagement panel.
The company says the campus will employ roughly 130 full-time employees with salaries ranging from $60,000 to $120,000 after hundreds of people work on construction during the three- to five-year build-out.
But Nebius says none of this likely comes without tax abatement.
Deal on the table
Independence City Council is voting specifically on whether to approve the industrial development plan and to use Missouri’s Chapter 100 bond policy — bonds that Nebius, not the city, is responsible for paying through their lease agreement. It’s a legal maneuver for a sales tax exemption on the Nebius project’s personal and property taxes.
Chapter 100 exemptions generally work by giving the city technical legal title to the property and equipment. Cities don’t pay taxes on property they own, so then the city can ask for PILOT fees — often at a discounted rate compared to regular taxes to lure large projects — that will be distributed like taxes.
Independence has planned to offer 90% tax abatement on up to $150.6 billion in property and equipment over the life of the 20-year agreement.
David Martin, an attorney who helped advise the city on the project, told the council in a Feb. 23 study session that even with the abatement, it’s a massive increase in revenue compared to what the property pays in taxes if left undeveloped.
“Essentially, you’re wiping tax off a property that creates about $2,200 a year and replacing that with — if it attains full build-out — a PILOT of $32 million a year,” Martin said.
Tax abatement in two parts:
- Real property (land and buildings): Nebius leases approximately 2.1 million square feet of data center buildings from the city. The PILOT is set at 14 cents per square foot for the first 12 years, then gradually increases to $1.04 per square foot in year 20. That’s projected to be $11.5 million in PILOT fees over 20 years on a construction project expected to cost $6.6 billion at full build-out.
- Personal property (equipment): Nebius leases the servers, racks, cooling systems and all equipment needed to run the facility. The PILOT is a flat 10% and includes chips that will be replaced every five years. While numbers could fluctuate due to depreciation and technology changes, that is expected to cost Nebius roughly $144 billion in investment over the term that will equate to $640 million in PILOT fees paid over 20 years.
These numbers are according to the city’s cost-benefit analysis, prepared by public finance law firm Gilmore Bell and dated Jan. 23, 2026.
The PILOT payments would be distributed across every affected taxing jurisdiction, proportional to their levy rates. In the case of the affected school districts — the data center campus stretches across Independence and Fort Osage school districts’ boundaries — PILOT fees are distributed specifically by where buildings and equipment are located.
Where combined projected PILOT money goes over 20 years:
- Independence School District – $463.4 million
- Fort Osage School District – $62.7 million
- Jackson County – $54.7 million projected
- Mid-Continent Public Library – $30.7 million
- Metropolitan Community College – $17.4 million
- Mental health – $9.5 million
- Board of Disabled Services – $7.2 million
- State of Missouri – $2.95 million
- Independence city services and capital improvements – $1.9 million through a surtax
- City of Independence – $885,000
While the city receives nominal PILOT fees on real property taxes, it does stand to gain substantially once the tax-abated lease ends. If the company stays and doesn’t seek further abatement, that would be a boon to city tax rolls.
Interim City Manager Lisa Reynolds also noted during a Jan. 12 council study session that the city’s general fund receives 9.8% of revenue from municipality-owned utilities including water, sewer and electricity. The data center project’s increased usage would amount to a windfall for city coffers.
“It could be $30 million to the general fund (per year), could be more but those are anticipated numbers at full build-out,” Reynolds said.
The city’s general fund had a balance of just under $85 million last year, meaning the potential of $30 million represents a substantial increase.
Would Nebius build it without the tax incentive?
At the study session Feb. 23, Independence Mayor Rory Rowland asked directly if the project could go forward without tax abatements.
Nebius’ local attorney Mark Coulter read a response from the company.
“Projects of this size are often highly collateralized, meaning the capital deployed is leveraged against anticipated future earnings. As such, they are not capital rich, regardless of the capital expenditures made and taxes cannot be financed. The current tax code does not contemplate such a large concentration of high-value property, and there are no other entities which would be taxed at such a rate. If abatements are not received, it is unlikely the project would proceed at the same level of investment, if at all.”
Rowland followed up for clarity.
“Our plans are to move forward with the abatement,” Coulter said. “If it’s not, I think we’d have to go back and take a hard look at what the long-term plans will be.”
Coulter agreed with Rowland’s assessment that without the abatements the project wouldn’t be financially feasible for Nebius.
The question of whether to give tax incentives to data centers is an active national debate. Citing energy capacity concerns, Illinois Gov. J.B. Pritzker recently announced plans to suspend offering tax incentives for data center projects in the state. Cities including College Station, Texas, and St. Charles, Missouri, also saw data center plans rejected after public backlash.
Is 90% tax abatement the right amount
The city’s cost-benefit analysis shows the range of possibilities. For example, if neither abatement is approved but the data center project still went as planned, standard taxes collected would total $6.9 billion over 20 years.
However, if the property remains undeveloped — which supporters say would happen if not for the tax abatement — it would generate less than $55,000 over the same 20 years.
As it stands, $651.5 million would be collected in PILOT fees if the tax abatements are approved. Martin told the council that no taxing jurisdiction — schools, municipalities and groups receiving payments in lieu of taxes — has voiced objections to the tax abatement.
However, several residents counter that the difference between $651.5 million with abatement and $6.9 billion without it is too great, and the city should try to get a better deal.
“I have to say no to the level of the tax abatement that you’ve got,” resident Andy Collins said at the public hearing. “I would not mind saying 75% would be more appropriate, and I’m sure a lot of the residents would feel better about that also.”
Notably, the Google-backed Project Mica in Kansas City’s Northland has a tax incentive plan for 75% abatement on property taxes over 25 years.
At the Feb. 23, study session, attorney Martin said he and city staff crunched the numbers by percentage. Since the abatement term is longer in the Google project, Martin said Nebius would actually pay roughly 3.5% more in taxes and PILOT fees under its current structure than Nebius would with a Google-style plan.
“I’m totally against this abatement. I think 90% is way, way, way too much,” said resident Mark Williams at the public hearing. “The other gentleman said 75%, if it were up to me I’d say 50% and even that’s too much.”
Many residents lamented what they viewed as tax breaks to out-of-town corporations while they had to pay full taxes. Marjain Breitenbach, a resident who ran for a state representative seat as a Republican in 2024, said a lot of people are hurting in the community.
“I don’t know about the rest of the people in this room or this community, but I’m tired of being the only one paying taxes,” Breitenbach said. “Why don’t we give the money to people that live in the city? Why don’t we support the businesses that are already here?”
Valerie Byrnes, president of the Independence Chamber of Commerce and Economic Development Partnership, framed the Chapter 100 tax abatement as a standard economic development tool.
“This is in no way corporate charity, as the payments in lieu of taxes far exceed what many communities may otherwise receive without such a project,” Byrnes told council members. “…Without this tool, this project does not exist. It’s a critical tool in economic development across the state of Missouri. It’s not unique to us.”
Independence safeguards if something goes wrong
Many residents voiced concerns about the company failing to perform as promised, going under due to a potential AI bubble or the data center being a nuisance of light or noise pollution.
At the Feb. 23 study session, Martin said the project has to comply with all city codes and walked the council through the specific provisions designed to hold Nebius accountable. The city’s ultimate leverage, he explained, is in the abatements themselves.
“You’re in a situation, presumably, if you’re enforcing one of these provisions, where the project already exists,” Martin said. “The investment has already been made, and the city’s saying ‘If you don’t stop doing X, we’re going to remove (abatements) and put the project back on the tax rolls.”
The proposed contracts include investment milestones with clawback provisions. Nebius must invest at least $11.9 billion in equipment by Sept. 30, 2030, and $3.1 billion in real property by the same day the following year. If the company falls short of the agreement, PILOT fees increase in proportion to the shortfall.
Notably, PILOT fees would be substantially less than projected if Nebius only hits the minimum required investment.
If construction stops for 90 consecutive days or Nebius ceases operations for 180 consecutive days, PILOT payments jump to 100% of taxes otherwise due and the benefit of tax abatements vanishes.
Martin told the council that certain obligations like decommissioning the facility and environmental safeguards to prevent the city from losing funds survive even after the abatement term ends in December 2046.
The contracts do not carry a binding local hiring guarantee, something opponents have flagged repeatedly. But Nebius has pledged community benefits including STEM programs and apprenticeships.
City officials also stressed that the bonds to finance the project are privately issued and owned by Nebius and do not affect the city’s credit rating or bonding capacity.
What happens after the vote
If the council votes to approve the development plan and abatements, the project’s timeline begins. Nebius’ website indicates that they plan to begin construction in the second quarter of 2026.
The industrial development plan projects the first equipment investment of $4 billion in 2027, ramping up to more than $10.6 billion per year from 2028 through 2030.
The first real property PILOT payments would begin at about $19,000 in 2027, leveling at roughly $303,000 per year through the first decade before escalating further to more than $2 million projected annually by the end of the 20-year term. The much larger equipment PILOT payments would begin in 2028.
Gonzalez told The Beacon that she believes the council will vote to approve the ordinance. She said the only council member who has committed to voting against it publicly is Brice Stewart, who represents the district where the data center would be built.
If the council passes the tax abatement, Gonzalez said she and her group plan to launch a referendum petition. That would require 3,700 signatures from registered Independence voters within 30 days to force the question onto a ballot.
A successful petition drive would not make the April 7 municipal election — featuring council and mayoral races that loom over the data center debate.
For now, roughly 2,500 members of a Facebook group that didn’t exist three months ago are watching the same calendar as the city officials they are pressuring. Gonzalez, who says she trusted many of the current council members before this issue came up, now has a different view of her local elected officials.
“You are not just voting on tax breaks for a data center,” Gonzalez told the council. “You are voting on whether the people of Independence can still feel that their voices matter more than corporate interest. You are voting on whether economic development in this city will be done with the residents or done to them.”
This story was originally published by The Beacon, a fellow member of the KC Media Collective.
