A Fulton County agency is considering granting a more than $10 million property tax break to the social network belonging to the world’s richest man — Elon Musk — an incentive for computers in an existing Atlanta data center that would create no new jobs.
The Development Authority of Fulton County (DAFC) will consider the proposed tax break Tuesday for X Corp., formerly Twitter, that will reduce the company’s tax bill over a 10-year period. Data centers are among the hottest sectors in commercial real estate and the state of Georgia already provides significant financial incentives for developers of such projects to build in the state.
The social media platform, which is owned by the Tesla CEO, owns and operates computer storage space with Qualified Technology Services (QTS) data center at 1025 Jefferson Street. The authority’s agenda said the tax savings are needed to prevent X from choosing to install the equipment in Portland. The proposed project, which is estimated to be a $700 million investment, would not prompt any new jobs in Fulton County — instead retaining 24 current X employees.
The agency has faced intense scrutiny in recent years for doling out tax savings to real estate developers in hot neighborhoods where critics contend they are not needed. More recently, tax abatements for data centers and similar developments have become a divisive topic for the authority, which recently rebranded itself as Develop Fulton.
The QTS data center was the center of a controversial tax abatement request over the summer, where it requested $45 million in tax savings for an expansion that was already under construction. It prompted more than 100 written comments from Howell Station neighborhood residents and community stakeholders — nearly all opposed. The item was shelved and has yet to return.
Arthur Toal, president of the Howell Station Neighborhood Association, said in an email that X officials did not reach out to neighbors about the requested tax abatement, which he said “will come from our schools and infrastructure.”
The Develop Fulton agenda said the X investment will generate $16.6 million in new taxes over a decade despite the abatement.
“Develop Fulton’s assistance can make the difference to secure millions of dollars in new tax revenue for our region that may otherwise go to Portland or other locations, as well as a high likelihood of securing additional future investment for Fulton County, the City of Atlanta, and (Atlanta Public Schools),” Develop Fulton Executive Director Sarah-Elizabeth Langford said in an email.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Development authorities play significant roles in recruiting jobs and investment, but critics say Develop Fulton often offers tax breaks in exchange for few public benefits or for projects that would have been built anyway. A 2021 Atlanta Journal-Constitution investigation found the authority provided preliminary or final approval for more than $328 million in tax breaks in a three-year period, largely in fast-growing areas like the Beltline or Midtown.
An investigation that year by the AJC also found a culture of loose financial controls at the authority, leading to an overhaul of the authority’s board and board policies.
But in recent months, the board has again considered awards that have proven controversial, particularly within the city limits. Since April, it has awarded more than $110 million in tax savings to more than a half-dozen developers.
The Develop Fulton board will also consider finalizing a $32 million tax abatement for a data center at Tilford Yard, a former rail yard that was exempt from property taxes during its decades of ownership by CSX. Edged Energy plans to build three warehouses to store computer equipment and is valued at more than $1.5 billion. The abatement passed in September by a razor-thin 5-4 vote.
A third tax break under consideration is for a speculative industrial development in Union City.
Develop Fulton meeting
The board’s meeting is at 2 p.m. Tuesday at Develop Fulton’s conference room at 141 Pryor Street SW, suite 2052. It will be available to stream on Zoom at https://us02web.zoom.us/s/86783512933?pwd=anFnb1ZWSVllWDUxQS9wQVQ3eWFjQT09.
