The more than 500-acre hyperscale data center project, Project Clydesdale, passed unanimously by the Tulsa County Commissioners on Monday.
Commissioners created four special incentive districts to support the project.
Within each district, the developer does not have to pay property taxes on real estate and equipment.
Instead of paying property taxes, the company makes a $1.5 million annual payment per phase, increasing by 1% each year, plus an additional $500,000 annually toward community infrastructure improvements.The incentive structure is designed to attract at least $700 million in private investment per phase without raising new taxes.
No job commitment
Local unions and Tulsa County Democratic Party Chair Sarah Gray wanted the data center to have a commitment in place to try to hire at least 30% of construction hours for locals and 20% for apprentices.
Gray said there are other ways to make sure the job promises are carried out.
“Whether through permits or licenses,” she said during the meeting. “Those are things that we are going to expect to be honored.”
When asked why the county did not get a written commitment, County Commissioner Stan Sallee said, “It's just, it's hard to tie any one person to say, I can guarantee you 30% qualified jobs for this project.”
Long-term data centers generally hire few local workers with a recent Wall Street Journal article describing the centers as a job creation bust.
Increased demand and utility rates lead to a natural gas boom
A recent University of Michigan public policy study showed that tax breaks for data centers do not deliver on promised economic benefits.
That same study also noted that local utility rates increase due to data centers.
“We did ask the supplier of electricity on this project… will this project increase utility rates for residential customers?” Sallee asked after the meeting, “And the answer was no.”
Tulsa World reported Friday that Public Service of Oklahoma plans to increase rates by more than $10 a month for an average customer due to ‘large load’ customers.
Some of these large load customers are proposed natural gas facilities.
More than 50% of data center fuel comes from fossil fuel power plants, like natural gas, according to a recent study.
The new fossil fuel facilities are expected to be a large power source for data centers with Bank of Oklahoma Financial’s Chief Investment Strategist Steve Hyett even mentioning natural gas as a “short-term way” to cover for increased energy demand at a recent Rotary Club meeting.
Hyett isn’t the only person touting natural gas to cover energy demand.
Cortney Cowley, the assistant vice president and Oklahoma City Branch executive of the Federal Reserve Bank of Kansas City, said in a press release, “natural gas is well-positioned as a reliable and scalable source of electricity generation to meet rising power demand from AI and data centers, supporting its long-run role in the U.S. energy mix.”
Tulsa State Rep. Amanda Clinton will host an interim study about data centers and their impact in October. This was brought up by Tulsa County resident at the meeting who wanted to know why the data center couldn’t wait until the study was completed.
Tulsa County Commission Chair Lonnie Sims responded, “Well, we can only vote with respect to the current regulations.”
