Lawmakers have passed legislation in support of the largest economic development project in state history to be located on two sites in Madison County.
During the second special session of 2024 called by Governor Tate Reeves, Mississippi lawmakers approved incentives for a $10 billion capital investment project in Madison County.
The company bringing the two data centers to the area is Amazon Web Services (AWS). The Magnolia State project represents the second largest announcement the company has made in North America.
Amazon ranks second behind only Wal-Mart on the Fortune 500, which measures revenue produced by U.S. companies. It has a market capitalization of over $1.6 trillion dollars and AWS is its fastest growing, most profitable segment.
The State Senate handled the legislative incentive package while the House presented the direct appropriation bills. All three bills passed nearly unanimously in each chamber, with one vote in opposition in both chambers.
SB 2001 coined the proposal “Project Atlas” and laid out parameters for how the new developments would be constructed.
The state is committing to a 10-year, 100% corporate income tax exemption, along with incentives for Sales and Use Tax for construction as well as investments made 12 months post-construction. Amazon will receive a rebate of 3.15% of eligible construction costs and a 100% exemption for Sales and Use Tax on equipment.
Lastly, there is a 30-year rolling state tax exemption. In the event Amazon continues to make the annual minimal investment of $500 million and hires 50 additional jobs, those tax benefits could be extended. The company will begin paying income tax after 10 years but will not be exempt from payroll taxes.
The incentives were key to making Mississippi competitive in securing this deal. All tax incentives will sunset in 2057.
Direct appropriations for the projects took place in the House legislation with HB 1 and HB 2. The state appropriated $44 million to the project, none of which will be used for facility construction. Of that, $35 million will go to workforce training through community colleges and other workforce programs, and $5 million is being directed to site development support. These are all one-time funds.
A $215.1 million local public infrastructure commitment was made from Madison County. The funds are intended for infrastructure needs to accommodate the development. The breakdown includes $15.7 million for roads, $14.8 million for water, $171.5 million for sewer, and a new fire station at $13 million. The company is required to guarantee full repayment of these funds starting in the first year. Repayment will be done through minimum local property taxes.
According to Reeves and others, the revenue from this agreement is expected to have a significant impact on both Madison County and Canton public schools.
Joey Deason, executive director for the Madison County Economic Development Authority, credited the numerous partners and full community effort for landing the project.
“MCEDA has been pursuing this project for the past 5 years. We’ve had numerous partners who have been integral in landing this project. This win was a full community effort all around. At the end of the day, it was our strategic outlook and creativity that ultimately aided in us landing this project, specifically with our permitting,” Deason said. “We had an opportunity to show what Mississippians can do and we were able to make an impression on the leadership all the way to the top. Madison County put its best foot forward and we could not be more excited with the outcome.”
The project is expected to bring 1,000 jobs to the state with an average salary at or above $66,000. The facilities will take up 1,700 acres of land in two separate areas of Madison County. Governor Reeves has said he believes if implemented successfully, the investment will be much larger than $10 billion.
Bill Cork, Director of the Mississippi Development Authority (MDA), said there is a $2 million line item with the Institutions of Higher Learning (IHL) to create positions that will engage with the community and help motivate individuals to pursue careers in the associated industry.
Cork said training will focus on STEM education curriculum, certification programs, and internationally renowned programs within the company’s own operations. The process will consist of building the team and working with communities and the company to embed curriculum within in K-12 schools, community colleges, and universities
“How this will play out, we are all going to learn together. This is going to be so transformational,” said Cork.
He added that this deal might be the best one in the state’s history for the long-term impact it could make.
Cork said the state economist’s report estimates that the entire state investment will be paid back within 10 months. They expect revenue within the first 15 years to exceed $157 million.
Before the name of the company was made public, members of the Senate Finance committee questioned whether the company had been vetted and if there was any expectation that things could go south in years to come.
“I would argue that if you own a 401K, you’ve already vetted this company,” said Cork.
In his opinion, a worst-case scenario would mean terms of the agreement were not met and there is an empty industrial park. Cork indicated he could “sell them tomorrow” if that was the case.
With such a large project, massive energy infrastructure needs will be in play. Entergy Mississippi has signed on to ensure power can be generated for the sites as well as continue regular distribution for residents.
CEO of Entergy Mississippi Haley Fisackerly said conversations with AWS began roughly five years ago. He said the company not only supplies electricity but works heavily in economic development.
“We provide low cost energy, great reliability, which these data centers are going to need,” said Fisackerly.
He indicated that the company is very focused on sustainability and renewable energy which goes hand in hand with Entergy’s EDGE program. Entergy will also be deploying additional solar facilities to serve the data farms. Those solar energy facilities will be located in Hinds, Washington, and Tallahatchie and are expected to generate billions in revenue.
With the three phases of the project, Fisackerly estimated Entergy would put in between $2-$3 billion in order to meet the need.
“Just as Nissan did for the automotive industry, AWS will help cloud technology flourish in our state – making Mississippi a technology industry leader in the Southeast United States,” said Fisackerly. “We’re proud to be a partner in this historic investment in our communities and appreciate the fantastic collaboration with Governor Tate Reeves, the Mississippi Legislature, the Mississippi Public Service Commission, the Mississippi Public Utilities staff, Mississippi Development Authority, Madison County Economic Development Authority and others to bring this transformative project to the state.”
Senator Josh Harkins, Chairman of Finance, told members on the chamber floor that the company is hoping to utilize different forms of energy, including green forms, in order to keep operations running successfully.
Governor Reeves largely credited the efforts of Madison County officials in securing this opportunity. Moving forward it will be a “whole government” approach. Five agencies will aid in the implementation of the project.
Reeves said the Amazon data centers should be up and running by 2027, with some construction already beginning. Because the facility is not being aided financially by the state, the construction bid process is left up to the company. However, Reeves said he has impressed upon them how important it is that they consider using Mississippi-based contractors.
Over the next three years, Governor Reeves has said the company could require between 6,000 and 7,000 construction workers in order to complete the facilities at the two sites. Reeves indicated that number could end up being closer to 15,000.
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