KSHB 41 reporter Tod Palmer covers sports business and eastern Jackson County, including Independence. Share your story idea with Tod.
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Opponents of a sprawling data center in Independence’s Little Blue Valley were vocal, but union members also made their presence felt at recent Independence City Council meetings.
“Jobs, careers — that's why,” said Ralph Oropeza, business manager for the Greater Kansas City Building and Construction Trades Council. “These type of construction jobs bring a lot of work to our local area, our local workforce, and it keeps our area standards very healthy.”
The Independence City Council approved tax incentives — in the form of Chapter 100 industrial revenue bonds — that will allow Nebius, a Dutch AI company, to build a 400-acre, $150-billion AI factory in eastern Independence.
The project drew a fight from neighbors, environmental groups and anti-AI advocates — one that isn’t over. But unions lined up behind the project, and it’s easy to be cynical about labor’s support for the data center.
“We're talking about hundreds of millions of dollars in wages and benefits for our members, for all the construction trade,” International Brotherhood of Electrical Workers Local 124 Business Manager Bo Moreno said.
But Moreno said it’s about more than the money contractors stand to make during the five-year construction process. He grew up in eastern Independence, “about five minutes” from the site, which is located at the intersection of Little Blue Parkway and Missouri 78.
“It's a once-in-a-lifetime investment in this area,” Moreno said. “I think about all the money could do for that community — whether it's the schools, whether it's the community projects with the police and fire. I think it's an amazing opportunity for Independence.”
Nebius will receive a 90% abatement on the property, but is expected to pay $35 million to $55 million in payments in lieu of taxes, or PILOT fees, during the 20-year agreement.
Before the property was sold to Nebius, it was agricultural land that generated only a few thousand dollars in tax revenue.
The city plans to use the new tax revenue to restore city services that have been cut in recent years and fund other neglected municipal priorities, including parks and other amenities.
The hope that new tax revenue could transform Independence is a big reason many longtime residents supported the project, in addition to the construction unions.
Not all union members agreed, including Tsvetina Pavolva. The inside wireman journeyman, who lives in Blue Springs, spoke against the project at Monday’s meeting, where the city council approved the bonds on a 5-2 vote.
“We don’t have to choose parasitic projects,” Pavlova said. “We don’t have to choose AI centers that don’t benefit us in any way. We don’t. We can pick something better.”
She knows there are millions of dollars at stake, but said, “I believe that unions should protect the quality of life for people more than just looking out for short-term monetary benefit.”
Union leaders insist more than a short-term cash grab is at stake.
“Every construction job that we go to, we're working ourselves out of a job,” Oropeza said. “But we put investment into our retirement, we put investment into our schools, we put investment into our health and welfare.”
The ongoing maintenance needs at data centers also provide ongoing job opportunities.
“A lot of times we have the maintenance contracts that go in there, whether it's replacing the cooling systems, the plumbing or, of course, the servers in there that need constant change,” Moreno said.
Oropeza said the scale of data-center projects also lends itself to apprenticeship opportunities, allowing for critical on-the-job training and workforce development.
He understands the frustration over billions in tax breaks to billionaire companies, but he also sees the benefits such projects bring to his blue-collar workers.
“I don't like the way the system is built, but we're in the sandbox together,” Oropeza said. “If we have a company that's willing to work with our local unions, that is willing to invest into our apprenticeships, that is willing to work with us on a harmony agreement,” he thinks that’s a deal worth taking.
Nebius, which hired Riverside-based ARCO as the general contractor for the project, confirmed that it is working on a labor harmony agreement in a statement to KSHB 41.
“We’re expecting at least 70% of the workers will be union labor, according to ARCO, the general contractor,” Nebius said via email. “ARCO stated in the Feb. 16 city council meeting that 70% of the labor they have already secured is union, and discussions between ARCO and LIUNA are ongoing.”
LIUNA is the Laborers' International Union of North America.
“The more economic development we get, the bigger we grow,” Oropeza said. “If we do that, it gives an opportunity to our young kids that are going through school right now to have an opportunity that perhaps they didn't have a chance [otherwise].”
Both Moreno and Oropeza said Nebius has been up front, transparent and intentional in engaging labor unions in recent months.
“A lot of times we don't get these types of reassurances, so I'm hopeful,” Oropeza said. “I'm very hopeful. ... They reached out to us. I mean, they came to us, to talk to us, and that was encouraging. We're usually at the tail end of things, where they (developers) want to talk to us last, but they (Nebius) put us up front through this development. It's been a good relationship.”
They believe Nebius will continue to be a good partner.
“It's been a good working relationship thus far,” Moreno said.
Nebius said construction is expected to begin as soon as next month.
Independence Power Partners is paying for the new natural-gas power generation facility, which eventually will provide up to 1100 megawatts to the AI factory.
No money from the Chapter 100 bond offering will be used for the power plant, but the bond issuance does include $2.5 million for resurfacing Little Blue Parkway and a $4-million bond-issuance fee for city services until revenues kick in next year for supplying power, according to Independence Assistant City Manager Charlie Dissell.
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