Details emerge on Microsoft’s $1.8 billion investment in Atlanta data centers amid tax, development wrangles

With the public release of planning documents last month, additional details have been revealed about Microsoft’s planned data center expansion in the Atlanta, Georgia area, reflecting growing interest in the region from hyperscale users.

With an investment led by TA Realty and EdgeConneX, the final $1.8 billion investment will focus on three physical data centers with a total electrical capacity of 324 megawatts (MW), effectively doubling the size of current data center deployments in the Atlanta metropolitan area.

Construction of Phase 1 of the project is expected to begin later this year on the first 612,000-square-foot data center building, with the entire project expected to be completed by 2029. The Phase 1 data center is expected to be online by 2026.

The entire data center campus will exceed 2 million square feet in size, with three nearly identical data center buildings. The campus, located southwest of Atlanta in Union City, is expected to be completed by 2032.

Not the only Atlanta area site

Microsoft has acquired at least 480 acres in the Atlanta area, spending as much as $171 million, with the initial 136-acre site in Union City being acquired in April of this year for $53.5 million.

In May, Co-Star reported Microsoft’s purchase of more land near Atlanta to expand its national data center footprint, noting that the cloud giant has snapped up more than 300 acres south of the city since February.

According to Fulton County Development Authority minutes, the total investment in this project is estimated at $1,842,000,000, which will result in 50 permanent full-time jobs and 400 to 600 temporary construction jobs for the construction and development of the site.

The economic impact over 10 years was estimated at $2,884,919,877, with tax revenues estimated at $200 million over the same ten years, even including the $75 million tax abatement approved by the Authority.

Microsoft has been acquiring and developing data center sites in Fulton and Douglas counties in Georgia for several years.

Fulton County is calling this new project “Project Steamboat.” For reference, the property currently generates just over $12,000 in annual tax revenue.

Tax deduction details

The main argument for the tax break was the extraordinary cost of developing the proposed site, estimated at more than $40 million, due to the extreme nature of the terrain.

According to the minutes of the meeting:

“The requested property tax incentive would help offset the significantly excessive site development costs of $43.5 million, including mitigation of the 90-foot drop at the site, as well as substantial excavation of the site’s extremely rocky topography and retaining mechanisms.

Additionally, this is a very competitive EDO as the client is simultaneously considering other locations outside of Fulton County.

Without a property tax incentive, real estate costs associated with this site are expected to be higher than those of 3 of the 4 other sites considered. “The applicant has demonstrated a long-term commitment to sustainable development, environmental awareness and diversity.”

Many partners, with Microsoft as end user

As mentioned above, TA Realty and EdgeConneX are leading the investment and operations of the data center campus site with Burr Computer Environments, a Texas-based design and engineering firm, as the site developer.

Burr is a global company specializing in the design of large-scale data centers. Earlier this year, Microsoft acknowledged that it would be the end customer for the site.

GA data center debate still simmers

In March, as noted Data Center DynamicsThe Georgia Senate has passed a bill to suspend tax breaks for data centers. Billed as a pause that would allow the state to assess the impact of data centers on the grid, the bill would have suspended tax breaks for data centers for two years.

In May, Georgia Governor Brian Kemp vetoed the bill, saying it would hurt the state’s business community. Local media reported that the debate over tax breaks for Georgia data centers puts industry interests at odds with environmentalists.

The governor’s veto stands — for now. In May, as DCD re-reports, Atlanta City Council members introduced another bill aimed at blocking data center development, with proposals to ban new projects around the central Beltline region.