Indianapolis approved more than $240 million in tax breaks for a $4.3 billion data center a Seattle-based company is building in Decatur Township. In exchange, the company and its tenant will pay nearly $53 million in taxes during the abatement periods.
The Metropolitan Development Commission approved the tax breaks for Sabey Data Centers at a meeting Wednesday at the City-County Building. The real estate tax break — a 60% reduction over 10 years — passed 6-1. The equipment tax break — a 90% reduction over 15 years — passed 5-2.
Mayor Joe Hogsett’s office called the project one of the largest investments in Indianapolis to date. Sabey is projected to become one of Marion County's top 10 taxpayers during the abatement period, the office said in a release.
Decatur Township Schools will receive $31 million and the Indianapolis Public Library will receive $3 million in tax revenue from the project over the next 15 years.
Once the tax breaks expire, Sabey and its tenant are projected to keep paying property taxes on the site — an estimated $9.3 million a year on equipment and $8.3 million a year on real estate, a combined $17.5 million annually.
The Sabey data center will be a two-building campus totaling 1,062,500 square-feet on 130 acres of land at 6400 Kentucky Ave. It’s one of three data centers that received approval in the past year despite intense opposition from local residents. Neighborhoods, advocacy groups and others are concerned about noise, increased utility rates and unknown effects created by the data centers.
Recently, the development commission approved a moratorium on new data center projects in Marion County through 2027.
The MDC agreed to delay public hearings for tax breaks for another data center — the Metrobloks project in Martindale Brightwood — until Oct. 21.
Opposition and construction jobs
Pat Andrews, a representative from the Decatur Township Civic Council, said during hearings before the MDC vote, that there’s “a big disconnect between investment dollars and the assessed value that is being attributed.” She said she analyzed data for tax abatements the MDC approved over the past year, and based on the assessed value, Sabey would be investing less in taxes than the Metroblox data center.
Andrews also warned about potential health effects to local residents and said the township fire department wouldn’t receive benefits.
Andrews and other Decatur Township residents are separately suing to block the data center development.
Mindy Westrick Brown, an attorney for Sabey with law firm Faegre Drinker, said there will be “economic ripple effects” for businesses and the project will bring about 300 construction jobs.
“Based on the economic analysis, the proposed site is expected to produce substantial public benefits without economic harm to surrounding properties,” she said.
About two dozen members of the United Association Local 440 Plumbers, Steamfitters, & HVAC Services union in Central and Eastern Indiana attended the meeting.
Clete Casper, director of real estate at Sabey, said the company will bring $5 million for road improvements, construct an aquatic center in Decatur Township, and make annual charitable contributions to the community.
Sabey said the data center will create 75 jobs that will pay an average of $50 an hour. There will be an on-site electrical substation with the potential to provide up to 250 megawatts of computing energy.
Sabey said the design includes a closed-loop water-reduction system to reduce water usage and cool the equipment, while greenspace and landscaping will buffer the property to reduce noise. The resolutions say the company also “intends to construct or fund several infrastructure improvements that enhance long-term [electrical] grid reliability and support the city’s growing tech ecosystem,” including agreeing to provide over 10% of its tax savings.
The company anticipates that construction will begin soon and reach completion by 2031. The resolutions direct the Indianapolis Department of Metropolitan Development to survey the project annually — for 12 years in the real estate resolution and for 17 years in the equipment resolution.
Contact WFYI data journalist Zak Cassel at zcassel@wfyi.org.
