(The Center Square) – An $8 billion planned Wisconsin data center could receive more than $450 million in local property tax breaks to go along with not having to pay state sales taxes on the construction of Vantage’s new data center in Port Washington.
The project is already the subject of complaints related the placement of transmission lines to power the facility, which is estimated to require as much electricity as the city of Los Angeles once fully operational.
Once completed, the facility is estimated to be worth more than $2.1 billion. But, under the tax increment agreement with Port Washington, the data center would pay property taxes like it is valued at just $121 million for the first 20 years while retaining the extra tax funds.
The agreement does not stipulate what technology will require or what staffing levels will exist in 20 years when the TID agreement ends.
Port Washington’s Common Council is scheduled to vote on the TID creation on Nov. 4 with the Joint Review Board being the final review of the TID on Nov. 18.
Mayor Ted Neitzke told the common council at a recent meeting that the city preferred to have Vantage pay for infrastructure at the site and retain the property tax payments instead of having the city front the money, which the city could not afford.
“That is a risk that they were willing to take that we were not,” Neitzke said.
Port Washington had a combined assessed property value of $1.3 billion in 2024, with the new project having an estimated fully operational assessed value of $2.1 billion.
The state of Wisconsin has a sales tax exemption on construction of qualified data centers good for equipment, construction materials, electricity and more that state leaders are currently considering expanding.
The current exemption has led to $70 million in forgone sales tax in its first two years, far exceeding Department of Revenue estimates.
Many of the usually benefits of a business entering the state – property taxes, sales tax and employment – have already been conceded by the state while questions remain about the impact of energy use at the facilities on consumer electricity prices.
Port Washington is able to create a TID that has a higher value than the rest of its tax base due to a state law passed last year allowing data center TIDs to be created even though they are valued at more than 12% of a municipalities total property tax base.
The city claims that the data center project would not occur without the TID and that the project brings benefits to the municipality including construction jobs over the seven-year construction period, economic activity from those construction workers, employment after the data center is complete, an increased future tax base, increased new construction allowances and both water and sewer infrastructure upgrades.
“While necessary for the project, the costs paid by developer will benefit all utility customers,” the TID documents state.
The agreement does not stipulate how many employees will work at the data center or their pay after the project is complete.
The Center Square was unable to obtain additional comment from Nietzke before publication.
