HUTTO – As development in the city has increased, so have the number of requests for the city to subsidize developers’ infrastructure through financial incentives. The Hutto City Council has discussed tax abatements for several projects this year, some with heated debate.
The incentive proposal for Skybox PowerCenter Austin, also known as the Hutto Data Center Campus, received unanimous approval from the mayor and council.
“This one is the one that single-handedly almost doubles our revenues as a city when it’s built out, even after the 50% abatement,” Mayor Mike Snyder said when originally presented with the Skybox incentive proposal at the June 1 meeting. The mayor had adamantly debated against another incentive proposal presented earlier the same day.
“As you said, the math on this one is extremely clear. It’s beneficial for the city and this is definitely the right move,” Councilman Randal Clark said.
Snyder and Clark’s sentiments were echoed by the rest of council as both the initial proposal and the later, detailed proposal passed without dissent.
The finalized incentive package was presented at the July 20 council meeting. Under Texas Tax Code Chapter 312, City Council approved the exemption of 50% of the taxable value of tangible personal property at the development for 10 years.
Alan Bojorguez, acting legal counsel at the initial meeting, told council that by law the city could choose to do the abatement on either real property, tangible items or a combination of both. The incentive package presented to council applied to personal property rather than land value. “State law does not allow cities to simply give money away. We are allowed to offer incentives to retain, attract or expand businesses, particularly when it comes to primary jobs,” Bojorguez said.
The PowerCenter, a joint venture of Dallas-based Skybox Datacenters and San Francisco-based Prologis Inc., partnering as Hutto Data Center Campus LLC, will make a total combined minimum capital investment of at least $10 billion in improvements and tangible personal property on the land within 10 years, according to city documents.
The development is located along the Texas 79 corridor at 3399 County Road 132 in the Megasite. The 224.5 acre tract purchased by the developers for the data campus was voluntarily annexed to the city during a June 15 council meeting. It was zoned for light industrial use and a municipal services agreement was approved during the same meeting.
The resolution approving the abatement states that developers will build a total of approximately 3.7 million square feet of space for data centers and related activities. While that would make it among the largest data centers in Texas, on a national and global scale data centers are trending toward gigantic proportions.
Prince William Digital Gateway, a proposed 2,100-acre technology corridor in Manassas, Virginia, could accommodate up to 27 million-square-feet of data center development, according to a report by Data Center Frontier. Two companies have already started the development process on approximately 18 million-square-feet of that project.
Skybox lists Fortune 100 and Fortune 500 businesses among their clients. Skybox PowerCenter Austin plans to offer two private 300 megawatt dedicated substations, which Data Center Frontier reports will make it one of the most scalable data center campuses in the United States.
The data center is expected to begin initial operation in late 2024.
