Independence schools say AI data center offers needed cash, even with $6B tax break
As Independence residents debate whether to welcome or resist the planned arrival of — and sweeping public subsidies for — a massive data center for artificial intelligence, some groups are making the case that the multibillion-dollar project will present opportunities that the city shouldn’t pass up.
And the Independence School District is leading the charge.
Nebius, a European AI company, is planning to build a $150 billion data center in an industrially zoned sector of eastern Independence, fueled by major tax breaks and a significant upgrade to and expansion of the once-defunct Blue Valley Power Plant nearby.
The Independence School Board voted last week to pass a resolution in favor of the planned data center, encouraging the City Council to approve a $6.3 billion tax abatement plan as the project inches toward the start of large-scale construction.
“The AI data center represents commercial development at a scale unprecedented in our community,” Interim Superintendent Dr. Cynthia Grant said at a Feb. 18 special meeting of the Independence School Board.
The data center, which would be the third Nebius property in America and would serve as the company’s flagship U.S. data center, would clock in at 400 acres, about twice the size of Arrowhead Stadium. It would contain about $144 billion in specialized equipment and would take about three to five years to completely construct.
If the City Council approves the sweeping incentives, the Independence School District is expected to receive about $463 million over the course of 20 years from the data center project. The payments wouldn’t be distributed evenly each year, but they’d average out to about $23 million annually, in the form of payment in lieu of taxes, or PILOT fee, according to city documents.
Without the tax abatements — which would reduce the amount of tax revenue the data center generates by more than 90% for 20 years — city data shows Nebius would have owed $4.9 billion in taxes to the school district in the two decades, or $243 million each year.
But even with the billions in tax breaks, Independence School District leaders say the annual revenue that would come from the data center would be a huge and noticeable boost for local schools.
“From the district’s financial perspective, the projected revenue associated with this development represents a substantial long-term opportunity for public education in Independence,” Grant said.
School district funding across Missouri is generally closely tied to property values, Grant said — and the district sees the AI data center as an opportunity to rely on a more stable source of funding with that projected average of about $23 million coming in annually.
“I think it’s so important to our schools and to public education in general to have sustainable funding that we can count on and that’s not subject to the whims of our Legislature,” Independence School Board member Denise Fears said at the meeting.
Ongoing controversies with and changes to the 2023 and 2025 property tax cycles in Jackson County have disrupted some school districts’ budgets, including Independence.
Interim Jackson County Executive Phil Levota said in December that school districts have offered mixed reactions to the county’s new tax policies, which have included de facto caps on property value increases between taxing cycles.
Relying instead on funding from Nebius could stabilize both the operating budget and the debt service budget for ISD, Grant said. And, she said, it could even mean lower property tax rates for homeowners.
“Importantly, the growth in the commercial tax base reduces reliance on residential property taxes,” Grant said. “This project has the potential to lower levies for our patrons while keeping our schools strong.”
Independence School District public relations director Megan Dillard was unavailable for comment.
Tax breaks and school funding
The revenue boost from the data center would become available if the city of Independence voted to grant Nebius tax breaks in the form of Chapter 100 bonds during its March 2 meeting.
Independence would issue up to $150 billion in industrial revenue bonds for the data center’s construction and equipment — which Nebius would be on the hook for paying back — that would then qualify the project for abatements on both real property and personal property taxes.
The city’s proposal would grant what amounts to an about 98% abatement on property taxes, and a 90% abatement on personal property taxes until 2046. Instead of paying taxes, Nebius would make PILOT payments each year.
Over the 20 years, Nebius is expected to pay about $651 million in PILOT fees. It otherwise would have owed about $7 billion in real property and personal property taxes in that same time, according to city projections.
The city is set to vote on the tax incentive plan next week, with ISD as the largest potential beneficiary. The Fort Osage school district, Metropolitan Community College system, Mid-Continent Public Library and the city of Independence are also set to receive funding. The city will also receive additional funding through PILOT fees generated by the electricity consumed by the facility.
Mark Coulter, representing Nebius as local legal counsel, said at a Monday night Independence City Council study session that Nebius would likely pull out of the project and the city altogether if the city council does not approve the proposed bond structure.
“If abatements are not received, it is unlikely the project would proceed at the same level of investment if at all,” Coulter said.
Labor union support
The Independence School District isn’t the only organization speaking in support of the proposed AI data center and tax breaks. For labor unions around Independence representing construction workers, pipefitters and others, the scale of the planned project — and the amount of construction work it will create — is too impactful for Independence to pass up.
Mike Talboy, the political director of Greater KC Building and Construction Trades, said at last week’s City Council meeting that the data center will generate local labor jobs that will keep Nebius funding circulating within Independence city limits.
“The money will stay here,” Talboy said. “The wages will stay here. Careers will start with this project.”
Talboy described the incoming data center as “a very good deal for Independence” and criticized opponents for standing in the way of potential financial and industrial progress.
“This is money to schools,” Talboy said. “It’s money back into small businesses. It is restaurants. It is retail. It is everything that a city would need to be able to move forward.”
Jason Godfrey, speaking on behalf of the Independence arm of the Mid-America Carpenters Regional Council, echoed encouragement for the data center’s potential to provide work to “skilled tradespeople, local businesses, and families who call Independence home.”
“We’re hopeful this project moves forward in a way that provides good jobs and benefits the city as a whole,” Godfrey said.
City officials have said they expect the data center to generate about 125 “specialized” jobs and about 500 contract-based positions for construction and other forms of on-site labor.
Dale Auger, president of Pipe Fitters Local 533, said that data centers typically require between 1,500 and 3,000 skilled construction workers at the peak of the building process.
However, neither city officials nor representatives from Nebius have verbally committed to prioritizing hiring Independence residents, despite several direct inquiries from residents at public meetings.
Damon Miles, representing LIUNA Laborers Local 264 - the Independence-area chapter of the Laborers’ International Union of North America - said he worries that Nebius could go to another nearby city if community resistance continues, taking a lot of potential profit away in the process.
“If they don’t build this data center right here in Independence, they will build it somewhere else,” Miles said. “This is our opportunity. Let’s not miss it.”
Miles moved to Independence in 2001 and has worked on construction projects at multiple KC-area landmarks, including Union Station and the Liberty Memorial. Coming to Independence to work in construction was supposed to be temporary but ended up allowing him to build a career, Miles said.
Miles said he feels as though the data center could be a starting point for others to do the same.
“I don’t know who in the world would turn down $150 billion worth of work,” Miles said. “…We have to fight for this. We have to make this happen. Independence is always right there on the edge of having great things.”
Other labor groups speaking in support of the data center last week included Pipe Fitters Local 533, the Community Services League, the Independence Chamber of Commerce and the Independence Chapter of the International Brotherhood of Electrical Workers.
Mixed feedback
The support shown by school and construction groups represented a major tone shift from what has so far been a consistent outcry from Independence residents against Nebius and the planned facility.
The Independence School District has received multiple emails from district parents and families taking a stance for or against the data center in recent days, board member Denise Fears said Wednesday night.
“We can see in this resolution that the monetary benefit to the community, especially our district in particular, is significant,” Fears said. “For me, the big question is, is the bang worth the buck?”
Residents’ concerns have centered around how the project will impact livability in the surrounding neighborhoods, with multiple citizens speaking in public meetings about potential light, noise and air pollution. Water use and wastewater treatment has also been a frequently cited concern, along with wildlife habitat loss, unknown long-term health effects and potential detriments to property values.
Those who live close to the planned data center site, including neighbors along Bly Road, have been particularly outspoken against potential disruptions to their quality of life.
Fears said the board has been “encouraged by the swell of community engagement on both sides” within the past several weeks and that the district would “continue to monitor” Nebius’ adherence to local, state and federal guidelines.
“There are valid concerns about the noise, air, chemicals in the closed loop system, light, etcetera,” Fears said Wednesday. “According to Nebius, all of these are being studied. However, citizens are right to be concerned as to how to make sure these are all completely addressed.”
Independence mayor Rory Rowland previously told The Star that he is open to organizing further meetings for residents to share feedback with the city on data center concerns.
This story was originally published February 25, 2026 at 6:10 AM.
