NEW ALBANY, Ohio (WCMH) — Less than two years after Intel announced it would invest billions in a semiconductor chip manufacturing campus in New Albany, a second megaproject is coming to Licking County.
Amazon said it will break ground on a multibillion-dollar data center nearby.
In Ohio, “megaproject” status can be granted to projects involving more than $1 billion in capital investments or at least $75 million per year in new payroll. That status comes with large tax incentives for the companies that choose to invest that much money in Ohio.
Once complete, both Intel and Amazon projects will be in the Johnstown-Monroe school district, which serves roughly 2,300 students across the largely rural communities of Johnstown, Monroe Township and Jersey Township.
That landscape is all but certain to change when that community becomes the epicenter of the so-called “silicon heartland,” but when the biggest companies are given the biggest tax breaks to set up shop in a school district preparing for major growth, is that setting the district up to fail?
Superintendent Philip Wagner and the Johnstown-Monroe Board of Education have been analyzing different models for growth, considering how many more students the district can handle, how much the district can stand to grow, and how the district will fund that growth.
Wagner said he and the board would like to cap the district at 4,600 students. All students in the same grade level currently attend school in the same building, and Wagner said the plan is to keep it that way. Still, the district will require additional facilities and personnel to accommodate the imminent influx of families in the area.
An agreement approved in September by the New Albany City Council gives Amazon Web Services (AWS) 30 years of tax abatements to build a $3.5 billion data center complex on land that lies in the Johnstown-Monroe School District. Under the agreement, AWS would receive a 100% exemption on real property taxes for the first 15 years and a 75% exemption for the next 15.
Wagner said that does not mean that the school district will take a hit financially.
“A lot of (the land) is an agricultural CAUV so we’re not receiving much money on it now,” Wagner said, referencing Ohio’s Current Agricultural Use Value program, which taxes farmland at a lower rate to benefit the state’s agricultural industry.
Since Amazon took over what used to be farmland, Wagner said the land has about doubled in value, and Amazon still has to pay taxes on that land. The 30-year tax breaks only apply to the real property, meaning the buildings Amazon puts on the land.
“There’s (also) a compensation agreement that we have based on income, or payroll that comes in, so we are nearly made hold on those projects,” Wagner said.
According to the agreement, the project will create 105 new jobs with an annual payroll of $9 million.
“Our experience with Amazon Web Services has been tremendous. They look at us as a partner, at least this is, you know, the way we’ve been treated,” said Wagner, adding he looks forward to the future of the district and takes seriously the responsibility of having the tech industry in the community.
However, Wagner said there is still uncertainty about what exactly the financial picture will look like.
“The money isn’t here yet,” he said. “It will come. And then a lot of this, we’re going to put into the, into our facilities. The idea is not to go back to the community and ask for bond– or very little if we have to.”
Shannon Kellogg, vice president of public policy for AWS, said the data centers will ultimately benefit local schools and increase the tax revenue they receive, as has been the case in other communities where Amazon has set up shop.
“That results in direct jobs, that results in us working with businesses who provide services into those regions, and that results in even more tax revenues. So just the tax revenue side of this is significant, but we don’t believe that’s enough,” Kellogg said. “What we try to do is we try to invest in these other programs.”
Amazon’s special programs in central Ohio include Girls’ Tech Day; Think Big Spaces, where students can access technology hands-on; AWS Spark, which provides tools to K-12 teachers to instruct students on cloud computing; and We Build it Better, an extracurricular program to engage middle school students with STEAM (science, technology, engineering, arts, and mathematics) education. The company has already implemented programs like these in central Ohio, and Kellogg said there are plans to expand them.
For Amazon to qualify for the tax benefits, the company has to periodically prove to the state that it is maintaining “megaproject” status by making good on its planned investment.