Council Committee Recommends Rejecting $113 Million Data Center Tax Deal

The Indianapolis City-County Council's Metropolitan and Economic Development Committee voted 11-2 on Monday to recommend that the full council reject approximately $113 million in tax breaks for data center developer DC Blox. The committee's non-binding recommendation targets a proposed two-building campus on the city's east side, a project that has already received preliminary approval from the Metropolitan Development Commission.

The proposal includes a 10-year, 50% reduction in real property taxes for land and buildings, as well as a 10-year, 85% break on personal property taxes for high-tech equipment such as servers. City-County Council members Andy Nielsen and Michael-Paul Hart represent the districts that border the 305 Fintail Drive site near Irvington, where the development is planned.

During the meeting, more than two dozen residents spoke, with nearly all opposing the tax deal. Concerns focused on potential environmental contamination and the argument that the Atlanta-based company could afford the construction without public financial support. Sue Beecher, president of the Irvington Community Council, stated that her group voted unanimously against the abatements.

DC Blox, which has not fully committed to building the $1.8 billion project, provided details to the committee. The plan involves two phases: a one-story, 70,000-square-foot building expected to be finished within two years, and a two-story, 250,000-square-foot building to follow within five years. The development would create hundreds of temporary construction jobs and 21 permanent positions.

David Armistead, the company's senior vice president of sales, told the committee that DC Blox has no full tenant commitments for either building. He cited a court challenge to the land use approval as a reason for the uncertainty. When asked by Councilor Nielsen if the first building would proceed without the tax breaks, Armistead indicated that the lack of tenant commitments made the situation speculative.

Andrea Richter-Garry, CEO of the Indy Economic Development organization that negotiated the deal, argued the project would generate about $58 million for the local community during the abatement period. This figure includes roughly $28 million in taxes that would still be paid and a separate $30 million pledge by the company for east side projects, including a fire station, park upgrades, and $5.7 million for the redevelopment of Washington Square Mall.

The vote takes place against a backdrop of rising utility costs in Indiana. Governor Mike Braun signed a law earlier this year to rein in utility rates, and critics argue that large power consumers like data centers make that task more difficult. The Metropolitan Development Commission voted in August to temporarily ban new data center developments in Marion County through 2027, a measure that applies to this project despite its prior approval.

DC Blox is one of three data centers approved before the ban took effect. The other two are Sabey Data Centers' $4.3 billion project in Decatur Township, which received over $240 million in tax breaks in September, and a project by Metrobloks in Martindale-Brightwood. DC Blox is also planning to seek state incentives, though its application is not yet complete. The full City-County Council is expected to vote on the tax abatements in December.