Committee votes to kill data center tax breaks

The Metropolitan and Economic Development Committee voted 11-2 on Monday to recommend that the full City-County Council reject approximately $113 million in tax abatements for DC Blox. The Atlanta-based developer previously secured approval to construct a two-building data center campus on the east side of Indianapolis. This committee vote is advisory, meaning the full council retains final authority over the tax incentives. A final vote on the matter is expected in December.

More than two dozen residents and stakeholders spoke during the session in council chambers. Nearly all testimony opposed the proposed tax deal. Andrea Richter-Garry, CEO of Indy Economic Development, which negotiated the agreement for the city, told the committee the project would generate roughly $58 million for the local community during the abatement period. This total combines an estimated $28 million in taxes with a $30 million pledge from the developer.

DC Blox has not yet fully committed to building the $1.8 billion project located at 305 Fintail Drive near Irvington. Councilor Andy Nielsen asked if the company would proceed with the first building without the abatements. David Armistead, the company's senior vice president of sales, replied that the firm has no full tenant commitments for either the first or the second building. He cited an ongoing court challenge to the land use approval as a factor in the uncertainty.

The planned development involves two phases. The first phase includes a one-story, 70,000-square-foot building that the company expects to complete within two years. The second phase features a two-story, 250,000-square-foot structure to be built within the next five years. The project is projected to create hundreds of temporary construction jobs and 21 permanent positions.

The site lies on the border of districts represented by Councilors Nielsen and Michael-Paul Hart. Nielsen voted against the plan, calling the presentation clear as mud and speculative. Hart, who sponsored the proposals, framed the vote as a decision about east side investment rather than a referendum on data centers. He noted that the Metropolitan Development Commission had already approved the project's land use.

Hart argued that the city must invest in its townships to prevent economic decline. He pointed to convention centers in Noblesville and Fishers as examples of development taking people away from Indianapolis. Hart warned that the city risks becoming a downtown of nothing without such investments.

The committee considered two specific tax breaks. One was a 10-year, 50% reduction on real property taxes for the land and buildings. The other was a 10-year, 85% reduction on personal property taxes for high-tech equipment such as servers. If built as planned, DC Blox stated it would still pay about $28 million in property taxes during the abatement period.

Beyond local taxes, the company pledged $30 million for east side projects. This funding would cover park and trail upgrades, a new fire station, and $5.7 million for the redevelopment of Washington Square Mall. Sue Beecher, president of the Irvington Community Council, testified that her group voted unanimously against any abatements. Other residents raised concerns about potential contamination and argued the company could afford to build without tax relief.

DC Blox is one of three data centers approved in the city before the Metropolitan Development Commission voted in August to temporarily ban new developments in Marion County through 2027. The other approved projects include Sabey Data Centers’ $4.3 billion campus in Decatur Township, which received more than $240 million in tax breaks in September, and a Metrobloks project in Martindale-Brightwood. DC Blox is also planning to apply for state incentives, though that application is not yet complete.