Since the Meta Data Center has operated in DeKalb, it has accumulated $72 million in additional property tax revenue for the city 100 miles north of Bloomington-Normal, according to City Manager Bill Nicklas.
He said that money has been "transformational."
“The economic impact has been beyond our wildest dreams,” he said. “In the first four years, the total tax benefit in direct dollars, actual dollars to our taxing bodies, has been around $72 million.”
He said schools get most of the money, about 60%, and the city gets 7-8% at the end of the breakdown. So, DeKalb itself has earned $5 million or so since 2022.
Furthermore, the town receives indirect dollars. Nicklas said the presence of Meta has raised the valuation of the City of DeKalb from $600 million before it arrived to a present valuation near $2 billion, “… and that’s primarily due to their actual construction or related value that has been added because of tributary buildings and so forth on the site.”
Meanwhile, the DeKalb Community Unit School District 428 got under $32 million in just the first three years. That was about the same as the price tag listed for a new elementary school.
“We try to have neighborhood schools, so we don’t have to do a lot of bussing, but there was our most densely populated neighborhoods on our northwest side, and there was no neighborhood school there,” said Nicklas. “And now there is, and that cost was equivalent to just that three years of Meta’s property tax contribution to just the schools alone.”
Property tax relief
The Dr. Leroy A. Mitchell Elementary School in DeKalb opened one year ago. The multi-year project with its $34 million price tag paid for a renovation for a school hosting 400 students from kindergarten through 5th grade.
Aside from the opportunity to finish a long-awaited project, such as the school, the money has been able to provide relief to property owners as well, said Superintendent Billy Hueramo.
Meta has risen the Equalized Assessed Value in DeKalb, which would normally raise property taxes.
“Our property values have gone up, but our property taxes have not gone up until this last school year,” he told WNIJ.
Hueramo said with the addition of the money from Meta, the school district has been able to under levy and conserve its money to prevent raising property taxes.
“If you think about it, it’s a pizza that everybody gets a portion of it, and we’ve left — although six pieces were for us — we’ve left a couple behind,” he said. “It doesn’t mean the other taxing bodies can’t eat those up if they wanted, but we’ve left some behind to eliminate the burden on our taxpayers.”
Not only that, but the primary taxpayer to the school districts has shifted. The majority used to be from residents, but now it comes from Meta and its neighbors.
“Now, with the new industry, we’ve been able to shift more of what we utilize from industry and not as much as residential,” Hueramo said. “I forget the percentage, but it flipped. It was quite a bit.”
Amir Doka, the school district’s director of business and finance, said the resident contribution to the district’s budget has fallen from over 50% to about 30%.
That being said, Hueramo disagreed with the notion that the school’s achievements in the last few years are thanks to Meta. Rather, the Facebook parent company helped speed the process along.
He credits successful conservation of budgets for most of the work.
"[School staff] have been very conservative with our numbers to ensure that we have a healthy fund balance, and even our board has agreed to a 20-30% fund balance minimum, because we don’t want to be in a spot where we can’t pay our bills,” Hueramo said.
“So, because of that, and then on top of the industry helping us out, we’ve been able to do that a little bit quicker. But I wouldn’t say just because of the industry that that’s why were able to do it.”
Meta has also awarded grant funding to the school to help fund its STEAM projects.
DeKalb’s attractiveness
Nicklas said the addition of Meta has grown the area in other ways. Across the street and down the road are more industrial facilities in DeKalb’s Chicago West Business Center.
There’s a Ferrara Candy, Amazon and under-construction Kraft-Heinz warehouses for packing and shipping. The increase in traffic was enough to warrant new traffic lights.
“This interchange was new to help with this road, and [for] Ferrara more than anything really because of the truck traffic,” said Nicklas. “So, Meta doesn’t have the number of people they have working any given day. They don’t create a lot of traffic on this road. This is a three-lane with turn lanes. It was just a two-lane rural road and it was upgraded.”
Unlike Aurora’s CME Group and CyrusOne Data Centers, the location chosen in DeKalb is rural and therefore considered valuable farmland.
While the land had been purchased back in the mid-2000s for industrial development, Nicklas said it was not even farmed in the time up until prospective companies started building. But some might argue against taking away what is even potential farmland. Nicklas said city council did not hear anything like that.
Argument for the economy would say the data center is more profitable anyway.
“Corn is valued per bushel, and when you add the land value in the corn, the tax on the 250 acres was something like $12,000 a year,” said Nicklas. “We’re not out of corn; we’re not out of farmland. The county is [92% agriculture].
However, the land in DeKalb was also ripe for the picking, according to Nicklas. When the original owner, the Krasinski family, bought the farmland, they did so from local farmers.
As is the case with many family farms, the land proved hard to pass on.
“…because the debt is extraordinary, and a lot of younger folks aren’t interested in living that life,” he said.
So, on top of a willing and ready city government, Nicklas said taking advantage of otherwise available land has made DeKalb an attractive place for prospective business warehouses.
An approach with caution
Meanwhile, in Aurora, city officials are not able to point to an initiative like a school as an example of what data center development has raised in new money.
They are being purposely cautious with data centers and choosing to not spend their new revenue yet on specific projects. So, the money just goes to the city’s accounts to be used for administration, programs, infrastructure maintenance, etc.
But no special projects, positions or initiatives have been earmarked with data center money.
Alison Lindburg is Aurora’s director of sustainability. She said the city gains revenue from three main sources of utility tax, property tax and the project’s initial building and permit fees.
“From the utility tax perspective, my understanding is that that amount is determined by the state, and it fluctuates, but on average, the City of Aurora was getting about $11,000 per megawatt for the data centers,” she said. “So, for example, a data center that might be 98 megawatts would bring in about a million dollars a year in the utility tax revenue.”
Or $1.078 million a year for just one data center, according to Lindburg's estimate. Meanwhile, the property tax varies, and goes to other departments, as is the case anywhere else.
The CyrusOne Data Center has only been operating for a little over a year, so the city is not certain how much the property tax has been collected yet. But Lindburg said regardless of what that number is, the city is hesitant to undertake any ambitious projects.
“We’ve had concerns, not just as city employees, but our citizens are concerned about counting on this revenue for too long,” she said. “We don’t know what the future of data centers is going to look like.”
Lindburg said the city is aware of concerns like the AI bubble popping or the reality that data center technology is constantly changing.
“So, when we allow them to be here and think they’re going to be here for a long time, and then count on that annual revenue — if they don’t actually use as much energy as we had expected them to use, and then we’re counting on that revenue, that’s something that the city then has to consider,” she said.
Regarding the possibility of that future, Lindburg said city officials were forward thinking.
“We put a requirement in that they would have to decommission the systems that they have, including the generators and the tillers,” said Tracey Vacek, director of planning and zoning. “So, theoretically, if they do all of those things, then if they sell it, they could leave.”
In that event, Aurora decided the data centers were required to have modifications like parking to increase the likelihood of their reuse. All of which were included in the city’s ordinances for the facilities.
WNIJ's Peter Medlin contributed to this report.
