Madison County board votes to use Amazon fee-in-lieu proceeds to accelerate $215 million loan repayment

Chris Pace, outside attorney for Makita, told the Madison County board that five Amazon Web Services data center facilities completed last year have been added to the tax rolls and prompted the need to address repayment of a $215,000,000 public improvements loan taken two years ago.

Pace said the county has two fee-in-lieu (FIL) agreements with Amazon — one covering a nearby megasite and one involving the Ridgeland site — that grant a 10-year, two-thirds abatement on initial property and extend a 10-year two-thirds abatement for subsequent additions under the 30-year agreements. He said the one-third FIL payment flows into the county collector's office and is distributed pro rata to the county, cities, school districts, the fire district and other taxing entities.

Why it matters: The board approved a resolution directing that not less than half of FIL receipts from the Amazon projects be used to accelerate repayment of the $215 million loan made to Makita and supported by contribution agreements with Ridgeland and the county. The change is intended to shorten the loan's life and reduce long-term interest costs so that, when the loan is repaid earlier than scheduled, future FIL receipts flow fully to local taxing jurisdictions.

Pace summarized the loan terms: the loan carries a 13-year amortization schedule that will begin when the first annual FIL payment is received (he identified January 2027 as the start point). He said the agreement requires at least $10,000,000 be paid to the state in year one and then roughly $24,000,000 annually thereafter under the 13-year schedule. "Based on our math, it looks to us like we could easily take half of the fee in lieu money, pay back the loan," Pace said, arguing that doing so would eliminate many years of interest payments and move the community to net revenue sooner.

The board debated and then approved the resolution by voice vote after a motion from the board president and a second from Supervisor Baxter. The resolution, Pace said, would also be taken to the mayor and board of aldermen of Ridgeland for their participation because the city is party to one of the FIL agreements.

Revenue projections and county impact: Citing the assessor's preliminary assessments and assuming no millage changes, Pace said total FIL payments this first year would be just over $28,000,000 for five facilities, with approximately $12,000,000 of that top-line amount allocated to the county before debt service. Under the board's 50% prepayment approach, Pace estimated a net county benefit of roughly $6,000,000 in that first year. He provided a sequence of larger projected amounts for 2028–2032 and said that, under the accelerated-paydown plan, the loan could be repaid by about 2031 with larger amounts "free and clear" to the county thereafter.

Questions about water and power: Supervisor Baxter pressed Pace on water use and cooling systems. Pace said the project included a return line from Beatty's Bluff intended to recycle water, send it to treatment and reuse treated wastewater for cooling. He also noted that modern data centers built in the last decade are far more energy- and water-efficient than older facilities and that water use is seasonal: "This is when anybody using water for cooling is using a lot of water." On electricity costs, Pace cited House Bill 1 (2nd Extraordinary Session, 2024), saying its language precludes Entergy from passing the cost of new Entergy public-utility improvements constructed for Amazon into the general rate base.

What the board did next: The board recorded a voice vote in favor of the resolution and moved on to the next agenda item; no roll-call vote or detailed tallies were recorded in the transcript.

Authorities and next steps: Pace said county staff had shared a proposed resolution with county counsel and that a similar resolution would be presented to Ridgeland's mayor and board of aldermen for their approval at the city level. The board's action was procedural authorization for the county's intent to dedicate not less than half of FIL receipts to loan prepayment; implementing details, millage assumptions and final figures rely on final assessor values and any future millage decisions.

Ending: The board approved the resolution by voice vote and continued the meeting to the next agenda item; Pace indicated he had no further remarks.