Independence says it’s too late to petition for vote on disputed AI data center
After the Independence City Council greenlit a massive artificial intelligence data center by approving significant tax breaks, residents are gathering momentum in the hopes of presenting a legal challenge to the plan.
But city officials say their contracts with the AI company have already been set in motion.
Nebius, a Dutch company specializing in AI services, plans to build its flagship United States data center on about 400 acres of undeveloped land in northeast Independence. The $150 billion project, fueled by its own power plant, will benefit from more than $6 billion in tax breaks under an incentive plan passed by the Independence City Council earlier this week.
“Independence will be our largest AI factory in the United States to date, and we are fully committed to making it a project the city is proud of, ” Nebius CEO Arkady Volozh said in a statement issued this week. “This is our first project of this scale, but not the last.”
Despite the tax breaks, the project is expected to infuse about $650 million into Independence schools, libraries and other taxing bodies over 20 years. While school and union leaders have touted the project as a ‘golden opportunity’, the incoming data center has been wildly unpopular among residents, who fear long-lasting environmental impacts and disruptions to their quality of life.
As of Wednesday, a group of residents opposing the data center construction has met the signature threshold for an intent to file a referendum under county law, according to organizer Rachel Gonzalez. Residents affiliated with the grassroots group Stop The AI Data Center in Independence turned 20 pages of signatures into the Independence city clerk early Tuesday morning, just hours after the city council voted to approve tax breaks for Nebius.
The city, however, doesn’t plan to entertain a petition for a vote in this case.
Petition process
The first batch of signatures is intended to set a process in motion under which residents would collect additional signatures to demand a public referendum on the Nebius tax breaks. Under Independence’s city charter, residents have to collect 100 signatures within 10 days of a law being passed — by March 12, in this case — in order to challenge and potentially reverse it.
However, Independence spokesperson Rebecca Gannon said that the charter doesn’t allow the petition process to impact ordinances that have already gone into effect. Since the tax break and bond approvals for Nebius went into effect immediately after the city council passed them Monday night, Gannon said, a citizen-led referendum could no longer stop the process from a legal standpoint.
“Any ordinance relating to a specific contract goes into effect immediately, unless a later effective date is stated,” Gannon said. “...approving a petition for circulation would be in violation of the Charter.”
Opponents of the data center say they plan to continue to “take on a legal fight,” Gonzalez wrote on social media.
“The city of Independence is trying to deny our democratic process,” Gonzalez wrote. “...The city is banking on us being stupid.”
The Stop The AI Data Center group has seen explosive growth since Monday’s vote, and now has more than 25,000 followers on Facebook. Residents are still collecting signatures, even if the city won’t accept their petition for a referendum.
Meanwhile, construction is set to begin on the massive AI data center later this year.
Data center details
Heavy construction machines began surveying and tilling the earth at 501 North Bly Road in November, much to the surprise of Bly Road residents, who say they weren’t warned by the city.
Under the Chapter 100 funding structure approved Monday night, the city would hold ownership of the property and lease it back to the developer. Since the city is a government entity and doesn’t pay taxes, Nebius would be exempt from more than $6 billion in taxes over 20 years, instead paying about $651.5 million in fees.
Including the specialized equipment that will fill the data center, Nebius will receive 98% real property tax breaks and 90% breaks on personal property. The city also issued the corporation $150 billion in bonds, a financing tool tied to project revenues. The bonds are not up to the city to pay up front, according to city documents.
Most of the city’s cut will come from similar fees on the electricity generated for the AI data center by the old Blue Valley Power Plant, which will be rebuilt at more than nine times its former capacity by 2029. Under an agreement with Independence Power & Light, the Independence general fund will receive $33-$35 million a year.
The city council vote to approve the funding package came down 5-2, with Councilmember Brice Stewart and Mayor Rory Rowland voting in opposition. The data center would be built within the district that Stewart represents.
Residents’ concerns have centered around how the project will impact livability in the surrounding neighborhoods, with multiple people speaking about potential light, noise and air pollution. Water use and wastewater treatment have also been frequently cited concerns, along with potential unknown long-term health effects.
Along with the planned revenue, supporters have focused on the amount of jobs the project could bring to the area. The city and Nebius previously said that the project would generate 125 specialized jobs and 500 contract positions in construction, though Nebius has updated its estimate to 1,200 “skilled construction jobs.”
Neither the city or Nebius has committed to hiring locally, despite multiple inquiries from residents.
