This is a fun exercise:
How large a data center would your town need to replace your property taxes?
In 2023, U.S. local governments collected $1,965 per resident in property taxes, which includes municipalities, counties, school districts, and other local taxing jurisdictions.
So, for a 20,000-person town, that nets out to $39.3 million in annual revenue. Let's be conservative and call it $40m. We'll also combine the city, school, and county so we make the case even fairer to people who are data center-skeptical (if we didn't, this would mean cutting down the number to ~$15m on average).
Commercial effective property tax rates in major U.S. cities are usually in the range of 1-3%, so split the difference and call it 2%. That means our target annual property tax being $40m would require a taxable value of $2b.
Current U.S. hyperscale DC construction runs ~$9.5-$13/W of critical IT capacity before considering any other costs, and if the facilities are liquid-cooled as most of the more recent ones are, then they run ~7-10% higher on average. Luckily, Turner & Townsend have provided a model that includes shell/core, M&E, equipment, contractor costs, and everything else we need to consider, simplifying things for us.
With $10-$12/MW as approximate building/infra investment, $2b/$10m per MW = 200 MW, so if all construction value was taxable, a ~160-200MW DC campus would be sufficient to generate a ~$40m/yr bounty. It would do this while increasing electricity prices by ~5-10% on average (I have a post prepared on this; coming soon, just waiting on a final outside review), so well worth it, and also something the DC itself could offer to handle.
Municipal-only, the DC could be much smaller: $750m/$10-$12/MW is ~60-75 MW, with basically no effect on electricity prices on average.
In short, being generous, you could drop your property taxes entirely with a data center that doesn't even hit the hyperscale threshold of 250MW. And if we count the taxes done on business personal property in some jurisdictions, then this scales even better for local residents, because the revenue generated to the municipality is even greater per MW.
Sources:
apps.lincolninst.edu/data/si…
apps.lincolninst.edu/data/si…
lincolninst.edu/app/uploads/…
reports.turnerandtownsend.co…
reports.turnerandtownsend.co…