Judge to decide if Independence push to revoke data center tax breaks is allowed
A Jackson County judge will rule by the end of the week on whether or not residents have the right to pursue a referendum vote to revoke recently approved tax breaks for a massive data center.
The Independence City Council approved a series of tax breaks worth more than $6 billion earlier this month for a proposed $150 billion artificial intelligence data center in eastern Independence. The data center, which will be about twice the size of Arrowhead stadium, will bring in more than $650 million to schools and other taxing jurisdictions over the next 20 years. However, it will also benefit from 90% to 98% tax breaks and billions in bonds.
Data center opponents — some of whom have formed a grassroots anti-data center group — hope to reverse the tax breaks through a public vote, suing the city earlier this month for the go-ahead to enact a referendum process.
At a Monday hearing, attorneys for the city and for the resident group presented their arguments on whether the referendum would be legal — and how it would impact the future of contract law and development projects in Independence.
The city’s legal team argued that the tax breaks concern city contracts that went into effect immediately and are not eligible for the referendum process. The organizer’s legal team, however, argued that the charter lays out a series of exceptions that can be interpreted to leave room for a vote on the tax breaks.
Lawsuits and petitions
Nebius, a Dutch company specializing in AI services, plans to make Independence its U.S. flagship location with the 400-acre data center. Those on both sides of the issue have described it as one of the most significant developments ever proposed in Independence.
The data center will formally break ground in June, though heavy machinery work at the site began in November 2025. It will be largely powered by a planned upgrade to the defunct Blue Valley Power Plant, a coal and natural gas plant set to reopen at nine times its former size.
The morning after the Independence city council voted 5-2 to approve the tax breaks for Nebius, organizers against the data center turned in more than 20 pages of signatures to city clerk Suzanne Holland, seeking to trigger a petition-gathering process for a public referendum. With city officials arguing that a petition process would not be possible under the city charter, Holland declined to certify the first batch of signatures.
Organizers Rachel Gonzalez, Misty Vaughn and Kharma Magers sued the city and Holland on March 9. They argued that whether or not the city thought their petition had merit, Holland would still have been required to certify their first 100 signatures, allowing them to start the clock on collecting and validating signatures toward a referendum.
It also argues that under the charter, the collection of the first 100 signatures would trigger a monthlong waiting period before the tax breaks could go into effect.
Charter language debate
Under the Independence city charter, some types of decisions made by the City Council are eligible to be reversed by referendum, while others are not. Attorneys for the city and the organizers shared conflicting interpretations on how the data center tax breaks should be classified.
“The issue…is narrowed down to the interpretation of the language in the city charter,” David Whipple, an attorney representing the three organizers. “If there is ever an ordinance that should be subject to a referendum vote, this is one of them… If there had been some intent by the city to not allow this to go to referendum, it could have been stated in the ordinance.”
Chuck Hatfield, an attorney representing the city of Independence, reiterated the city’s position that the Nebius tax break package is not legally eligible to be put to a referendum because the tax breaks relate to contracts that have already gone into effect.
“Citizens of Independence do have the right to review some ordinances and to go to a vote of the people,” Hatfield said Monday. “This isn’t one of those, and there are really good reasons for that.”
Hatfield argued that allowing the referendum would set a precedent for referendum processes to interrupt other city contracts in the future. He argued that this could be disruptive to both future commercial development and any emergency contracts that would normally be legally implemented as soon as they were approved by council vote.
“The developers who put hundreds of millions, in this case, billions of dollars, into an economic development project, need the certainty to know that that project is really going to occur,” Hatfield said.
Gonzalez, however, said she feels that citizens’ proven interest in the time-intensive referendum process proves that the data center tax breaks are an appropriate use of the referendum process.
“It is significant time and citizen effort to cause a referendum,” Gonzalez said Monday. “We have over 100 volunteers out getting signatures every single day, multiple places across the city.
…This is the largest ordinance that the city of Independence has ever passed. We’re looking at $150 billion worth of bonds and of significant impacts to our local community, including our environment, and offering a 90% tax abatement to this company, and all we’re asking for is a say in that process.”
Signature efforts continue
Regardless of how the judge’s ruling on the lawsuit impacts the potential timeline for petition circulation, Gonzalez said that residents are already on track to collect enough signatures for a ballot measure if they win the lawsuit.
A Jackson County judge previously filed an order temporarily extending the deadline for residents to collect signatures, reasoning that residents’ right to petition would be impacted if the clock ran down on the collection process while the lawsuit worked its way through the courts.
If the court’s final decision reverts to the original deadline, March 30 will be residents’ final day to collect signatures. Gonzalez said Monday that the group had collected about 2,200 signatures so far and hopes to collect about 2,800 more. About 700 of those signatures were collected last weekend.
Organizers have distributed petition sheets to more than 100 volunteers and are asking that those volunteers turn in their pages to a group leader by Sunday. Along with posting a daily list of planned signing stations to social media, some have come together to drive each other to signature events, canvas neighborhoods in pairs and notarize each others’ pages.
However, Gonzalez said that she’s still running into Independence residents who have no knowledge at all about the Nebius data center project.
“I don’t know how, but I’m still finding folks that have no idea,” Gonzalez said at an ad hoc training meeting last Thursday.
Several Independence businesses have agreed to serve as semi-permanent hubs for residents to drop by and sign, including Scandinavia Place, A A Auto Sales, Blondie’s Salon and Rae’s Cafe.
This story was originally published March 24, 2026 at 4:59 PM.
