Data center tax abatement clears final hurdle, reveals project code name

With a unanimous vote of 4-0, the Payne County Board of Health approved a tax incentive district and its related agreement on Thursday. The agreement is with a yet-to-be-announced Fortune 100 technology company that plans to construct a massive data center complex in Stillwater.

The Health Board was the final taxing entity required to approve the agreement, paving the way for a potential $3 billion capital investment on 770 acres of property situated near Highway 177/Perkins Road and East Richmond Road.

Stillwater City Manager Brady Moore presented information to the board members regarding the proposed tax incentive agreement (TIA), which offers payments in lieu of (PILOT) ad valorem tax collected by local taxing entities.

The agreement outlines that the Payne County Health Department will receive PILOT payments over the next 25 years, totaling $507,285 for phase one and $538,494 for phase two. Each phase corresponds to the construction of a single 300,000 square foot facility. The TIA encompasses a total of six phases, although the Stillwater City Council has only approved the first two phases of the project. Committing to the subsequent four phases would necessitate substantial investments in the city’s water supply infrastructure to meet the anticipated demand.

If all six phases are completed, the Payne County Health Department could potentially receive an additional $2.1 million in funding over 25 years, resulting in a total of $3.2 million. Despite being the smallest taxing entity, the health department will receive just over two percent of the funds. However, this small contribution could have a significant impact on their mission to meet the community’s health needs.

“All funds received will be utilized to support efforts aimed at protecting and promoting health, preventing disease and injury, and fostering conditions conducive to the well-being of citizens in Payne County,” stated Kelli Rader, Regional Director of the Oklahoma State Department of Health. “The Payne County Health Department is currently collaborating with our community partners and citizens to conduct a comprehensive community health needs assessment.”

Stillwater parks to get much needed funding boost

In their negotiations with Kipper LLC, City leaders sought Community Betterment Payments to finance public projects. These payments, amounting to $7.7 million over 25 years for the first two phases, will be combined with funds received from the 3% OG&E franchise fee to target projects in public parks, infrastructure, and economic development.

The first Community Betterment Payment of $132,432 could be utilized to renovate the currently closed Myers Park.

In a recent development, the City has received a $17,500 donation from the Grand River Dam Authority to assist in funding new playground equipment for Myers Park. A City staff report indicates that the total cost of replacement equipment, including items suitable for toddlers and older children, as well as safety surfacing, will range between $60,000 and $80,000. 

Projected timelines

City leaders believe that the company behind Kipper LLC should reveal itself in March or April and have plans to commence ground breaking this year. They anticipate that the initial phase of construction will take approximately two years to complete. 

Mayor Will Joyce has pointed out that the project agreement stipulates that the company must commence construction on the final phase within the next 10 years. 

Project Rohan

The materials distributed at the meeting unveiled an internal code name for the data centers, aptly named Project Rohan. Until now, officials had only referred to it as the data center project or project plan.

It’s common practice for large private corporations operating in competitive industries to employ code names to maintain a level of secrecy. While some code names have no direct connection to the actual project, others do.

Fans of J.R.R. Tolkien’s Lord of the Rings books will immediately recognize the name Rohan, as it refers to a fictional realm inhabited by the Rohirrim, or Horse-lords. In the story, horses held immense significance, deeply intertwined with their culture and daily lives.

The horsemen of Rohan could easily be likened to cowboys roaming the vast plains of Oklahoma on horseback.