Leavenworth County hears data‑center tax‑impact briefing as residents raise concerns about incentives and local effects

Leavenworth County commissioners heard a detailed presentation on June 10 about the projected property‑tax impacts of a proposed hyperscale data center and fielded extensive public comment questioning fiscal assumptions, incentives and community effects.

County staff (identified in the meeting as "Mark") presented conservative estimates based on a 1 million‑square‑foot facility and said the county appraiser reviewed the valuation approach. He told commissioners that business machinery and equipment — including server racks and computer equipment — are treated as exempt business personal property in Kansas and therefore the primary local tax base is the buildings and land. "A million square foot building would generate roughly for all taxing entities in the area roughly $14 million per year in taxes," the presenter said, and noted the value could scale if the facility were larger (he said recent layouts showed closer to 3 million square feet).

Staff modeled county‑level impacts and household savings using current levies. Under the narrow assumptions used in the presentation, the county’s share from a 1 million sq ft facility was presented at about $3.8 million annually, and staff projected that, if taxing entities held budgets constant, new valuation of that magnitude could lower countywide property taxes by roughly 8 percent. The presenter emphasized these figures are conservative and that final numbers depend on build‑out, annexation, and state policy.

To mitigate construction and operating impacts, staff proposed contractual protections and mitigation measures to be included in any development agreement: third‑party engineering for road repair paid by the developer, pre‑construction mill‑and‑overlay of key routes, a proposed countywide impact fund (staff suggested a minimum $2 million pre‑funded contribution), a transportation and wastewater study estimated at about $600,000, and one‑time post‑construction road rebuilds. The presenter also proposed an impact‑fee mechanism that would require the developer to pay an adjustment if appraised values per square foot fell below a negotiated benchmark.

On incentives and state policy, staff clarified that the sales‑tax exemption at issue (referred to during the meeting as SB 98) is a state action; the county does not control the state incentive, but staff said the county can seek contractual protections inside a development agreement to guard local revenues should state policy reduce local receipts.

Public commenters challenged the assumptions and expressed a range of concerns. Byron McBee of Tonganoxie questioned outreach and repeated that the project’s pilot/abatement language had been clarified by staff; he also raised a separate governance concern about a delayed zoning‑board appointment. Richard Paus criticized 'but‑for' claims that the project would not occur without state incentives, calling economic development “not costless” and warning of risk transfer to taxpayers. Annette Holton said she had seen negative impacts in Ohio from rapid data‑center growth and urged commissioners to account for public‑health and infrastructure costs. Wes Baker alleged an individual in the room was using an enhanced listening device; the chair asked Baker to raise that privately with staff.

Commissioners repeatedly asked about timing and risk: staff said build‑out could take 5–7 years for full development, property taxes begin to accrue for the tax year after buildings are on the ground at January 1, and a community benefit fund or other mitigation could be prefunded. Commissioners also debated projection horizons (20‑year sales‑tax exemption timelines versus longer building lifespans) and tradeoffs in 'but‑for' fiscal modeling.

What’s next: staff will continue modeling and incorporate commission direction on protective contract language, impacted roads and mitigation funding; the record will remain open for further public input and technical analysis prior to any final agreements.