The Nebius tax abatement in Independence, Missouri gives the AI infrastructure company a 90% break on real and personal property taxes for 20 years, structured through Missouri’s Chapter 100 industrial revenue bond framework. In exchange, Nebius committed to roughly $15 billion in minimum capital investment by the early 2030s, 125 permanent technology jobs, and Payment in Lieu of Taxes contributions projected at about $651 million to local schools, the county, and other taxing districts over the life of the deal. The Independence City Council approved the agreement on March 2, 2026, by a 5-2 vote.
How Chapter 100 Drops the Tax Bill
The abatement works because of who legally owns the property during the lease term. Under Missouri Revised Statutes Sections 100.010 through 100.200, the city issues industrial development revenue bonds, uses the proceeds to take legal title to the buildings and equipment, then leases everything back to Nebius.1Missouri Revisor of Statutes. Missouri Code 100.100 – Revenue Bonds Authorized, How Paid Because the municipality technically owns the assets, they inherit the city’s tax-exempt status, and property taxes drop accordingly.2Missouri Department of Economic Development. Chapter 100
The bonds carry zero city liability. Nebius is solely responsible for all principal and interest payments through the lease, and if the project were to fail the city would not owe bondholders anything. Once the bonds are retired at the end of the 20-year term, the city can transfer the property back to Nebius for a nominal payment, and the assets return to the regular tax rolls.
The 90% Abatement and PILOT Math
Nebius pays the remaining 10% of what would otherwise be owed through a PILOT structure, and the formula works differently for buildings than for equipment.
On the real property side, Nebius leases approximately 2.1 million square feet from the city. The PILOT starts at 14 cents per square foot for the first 12 years, then ramps up gradually to $1.04 per square foot by year 20. Construction costs are expected to reach $6.6 billion at full buildout, and real property PILOT payments over the term are projected at $11.5 million.
Personal property runs on a flat 10% of taxes otherwise owed. Because the AI chips inside the facility get replaced on roughly five-year cycles, cumulative equipment investment over 20 years could reach $144 billion. That translates to an estimated $640 million in equipment PILOT payments. Combined with the real property side, total PILOT payments are projected at roughly $651 million.
Missouri law requires that PILOT payments exceeding the municipality’s administrative costs flow to affected taxing jurisdictions in proportion to their current tax levies, for Chapter 100 projects approved after 2003.3Missouri Revisor of Statutes. Missouri Code 100.050 – Approval of Plan by Governing Body of Municipality
Where the PILOT Money Goes
The campus straddles two school district boundaries, and school districts receive the largest shares. Projected distribution over 20 years:
- Independence School District: $463.4 million
- Fort Osage School District: $62.7 million
- Jackson County: $54.7 million
- Mid-Continent Public Library: $30.7 million
- Metropolitan Community College: $17.4 million
- Mental health services: $9.5 million
- Board of Disabled Services: $7.2 million
- State of Missouri: $2.95 million
- Independence city services and capital improvements (surtax): $1.9 million
- City of Independence general fund: $885,000
These figures assume full buildout and the equipment replacement cycles Nebius projected. Actual totals will shift with depreciation schedules and the pace of hardware upgrades.
What Nebius Has to Deliver
The agreement sets hard capital benchmarks. Nebius must invest at least $11.9 billion in equipment by September 30, 2030, and at least $3.1 billion in real property by September 30, 2031. On employment, the city expects hundreds of construction jobs during the build phase and 125 permanent technology positions once the campus is operational.4City of Independence, MO. Data Center FAQs
Chapter 100 also required Independence to complete a cost-benefit analysis for every affected school district, county, and city before the council could approve the plan.3Missouri Revisor of Statutes. Missouri Code 100.050 – Approval of Plan by Governing Body of Municipality That analysis is how the projected PILOT distributions were calculated.
What Happens if Nebius Falls Short
The clawback provisions escalate automatically. If Nebius misses the investment or operational benchmarks, PILOT payments rise in proportion to the shortfall, so the abatement shrinks without the city having to launch a formal enforcement action.
Full termination triggers are specific. If construction halts for 90 consecutive days or Nebius ceases operations for 180 consecutive days, PILOT payments jump to 100% of the taxes otherwise owed and the abatement disappears entirely. At that point the property is functionally back on the full tax rolls regardless of how many years remain on the 20-year term.
What the Deal Doesn’t Change for Residents
A facility this size raised obvious questions about electricity and water. Power for the data center comes from a separately financed generating facility being built at the retired Blue Valley Power Plant site by Independence Power Partners, not from the municipal utility’s existing supply. According to the city, existing Independence Power & Light customers are not affected, IPL takes on no debt for the power infrastructure, and residential rates are protected regardless of energy market fluctuations.4City of Independence, MO. Data Center FAQs
Water usage runs on a closed-loop cooling system. Recurring usage at full buildout is estimated between 400,000 and 640,000 gallons per year, roughly 1,753 gallons per day. Cooling water will not be discharged into the stormwater drainage system.4City of Independence, MO. Data Center FAQs
The Council Vote and the Lawsuit
The 5-2 vote on March 2, 2026 came after public hearings in which dozens of residents voiced opposition. Councilmember Brice Stewart and Mayor Rory Rowland voted no. A citizens’ group called “Stop the AI Data Center in Independence” organized against the project, citing environmental impact, health effects, light and noise pollution, property values, and homeowners’ insurance rates.
The group also filed a lawsuit seeking to force a citywide referendum on the deal. A judge dismissed the case. Supporters on the council pointed to the clawback mechanism as the city’s safety valve if Nebius failed to perform. Councilmember John Perkins said the zoning approval process gave him confidence and that the council retains the ability to pull the partnership if guidelines aren’t met.
Missouri law requires a majority vote of the governing body to approve a Chapter 100 plan, along with the cost-benefit analysis and PILOT identification.3Missouri Revisor of Statutes. Missouri Code 100.050 – Approval of Plan by Governing Body of Municipality Once the ordinance was signed, the city issued the bonds, took title to the project assets, and executed the lease. City administrative offices now monitor compliance for the 20-year term.