KSHB 41 reporter Tod Palmer covers sports business and eastern Jackson County. He learned about this story from covering the Independence City Council as part of his beat. Share your story idea with Tod.
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Developers and Independence city officials are promising great things from a proposed data center in eastern Independence, but it’s a tough sell to residents who’ve been burned before.
“I would say I have more questions than I did when I first walked in,” Independence resident Daniel Moorehead said.
Moorehead was among the more than 250 Independence residents who met with representatives of Nebius, the Netherlands-based AI company that bought nearly 400 acres with plans to build a 2.25-million-square-foot facility in NorthPoint Development’s EastGate Commerce Center, on Monday afternoon.
RELATED | Independence neighbors skeptical of new AI data center proposal
Many also attended the Independence City Council Study Session on Monday evening. Nebius representatives, who answered questions from the public earlier in the day, spent 90 minutes answering questions alongside non-elected city officials.
Moorehead said he’s pessimistic about the project.
“I'm not actually excited about it,” he said. “I think there's a ton of challenges, and at least one of those is we're going to put a lot of infrastructure in, and if we do have a bankruptcy or some other item where we're left holding the bag.”
Another interested onlooker and fellow Independence resident, Carol Salinas, shared Moorehead’s concern.
“I am skeptical because I've seen projects go off to begin with, and then it doesn't work out like they said or like they thought,” she said.
The Crackerneck Creek TIF District, which includes Bass Pro Shops and is located roughly eight miles from the proposed data center, is a glaring example and cautionary tale.
Independence guaranteed $90 million in special obligation bonds for the sprawling retail project, which hasn’t lived up to buildout promises and has fallen well short of revenue projections.
The fallout has left Independence, which promised to use sales-tax revenue from the project to fund its construction, on the hook for millions in bond repayments for at least the next 20 years.
“I don't think you have to go far in Independence to find empty shops, empty stores, so abandoning spaces in Independence is a fairly common thing,” Moorehead said.
But city officials insist the Nebius project will be different.
For starters, the Dutch AI company is seeking Chapter 100 bonds, which are a type of industrial revenue bond. The city council is expected to take up Nebius' application in the coming weeks, but the application has yet to come before the full city council.
Municipalities and counties in Missouri can authorize and issue the bonds to pay for the construction of certain types of economic-development projects.
In exchange, the company — in this case, Nebius — conveys the land for the project to the city and enters into a lease agreement for the length of the bond term.
The benefit to Nebius or another company is that the taxing jurisdiction is exempt from paying itself sales tax or property tax.
Instead, the leasing company — again, Nebius in the data center’s case — agrees to pay a PILOT, or payment in lieu of taxes, which flows into the city’s general fund above and beyond the lease agreement.
Generally, bond terms are for 20 to 30 years, and once the bonds are repaid, the taxing jurisdiction sells the property for a nominal fee to the company for which the facility was built.
The benefit to the city is that it receives additional revenue to use for city priorities, including roads, parks and other public services.
In the event of a bankruptcy or unexpected closure by the company for which the facility was built, any money owed, including the industrial-revenue bond repayments, would be part of bankruptcy proceedings, but the city would not owe the balance.
However, because the city owns the property until bonds are repaid, it can ensure it’s made whole by selling the property or repurposing it.
Independence Mayor Rory Rowland expressed confidence in Nebius, whose stock value tripled last year and counts Microsoft and Facebook parent company Meta among its customers.
“I'm confident that this will happen,” Rowland said. “Can we guarantee it? No. Independence has had bumps in the road before, but hopefully this is not one of them.”
Moorehead, who lives near the proposed data center, and other nearby residents remain skeptical.
“I wasn't excited to see the development going on that road, honestly,” Carson Buchanan said. “Even the other warehouse on the highway there (along Little Blue Parkway). So, I'm not excited to see that getting developed.”
Buchanan would prefer the area, which has been part of Independence’s long-term development plan, remain rural. He said he hasn’t seen the benefit of an early phase of the EastGate development.
“If you look down the road (from the proposed Nebius site), there's that warehouse that they opened up that has three tenants in it, a very big warehouse that is being underserved as well,” Moorehead said. “To hear that they're going to do this as well, it was very concerning.”
Moorehead did appreciate the chance to ask Nebius representatives questions, and the company stressed that it remains early in the design stage, vowing to engage with the community now and for as long as it remains in Independence.
“I appreciate what they're doing [and] I appreciate the way the city council has spent their time doing that as well,” Moorehead said.
He just fears it’s lip service and residents’ concerns, including the noise the project will generate, among other concerns, won’t be addressed.
“I saw no notepad; I saw no ability to take notes,” he said of the community forum before the study session. “So, I'm questioning where they're going to be taking these notes, how that information is going to get back, or if it's still back on me as a citizen, to come back to them and say, you know, where are those at?”
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