There’s a good chance many people around Birmingham had never heard of the city’s Industrial Development Board until last Friday. That’s when news surfaced that the board approved $3.2 billion in tax abatements over 30 years for a controversial data center project in Birmingham’s Oxmoor Valley neighborhood. The IDB unanimously backed the incentives during a meeting on May 29.
The planned “AI factory” by the Dutch company Nebius has drawn protests and three lawsuits with opponents voicing concerns over noise from the development, its environmental impact, water and power usage, and public input. The IDB’s actions became a new flashpoint for opponents because while the city council appoints board members, it was created under state law and operates independently.
On Saturday, Birmingham Mayor Randall Woodfin distanced himself from the board’s decision.
In IDB chair David Perry's view, the Nebius proposal is a win for the community. He pointed to the projected tax revenue.
"Right now, we are getting approximately $200,000 a year from the property taxes that are being paid on the site," Perry said. "With this project, over 30 years, we will be going from $200,000 a year to $87 million a year in direct tax revenues to fix our potholes, repair sidewalks, making investments in our schools, improving our public health programs."
Perry said he was also swayed because the site was already zoned for industrial use and because the Oxmoor Steering Committee, which evaluates proposed developments in that area, unanimously approved plans for the Nebius facility.
WBHM’s Andrew Gelderman spoke with Perry further about his views on the incentives.
This interview was edited for length and clarity.
Walk me through your decision to vote yes.
The factors that I typically look at in projects that come before the IDB, I look at things like the number of jobs that it will create, the total capital investment of the project that they'll be investing in the Birmingham economy. We look at input from the community. We look at input from key stakeholders. We look at potential environmental impacts from the project. The combination of all of those factors led me personally to believe that this project is better for the city to have it than to not have it.
Data centers have become this controversial topic, not just with this specific project, but nationwide. How did that play a role in the thought process there?
This is a project unlike any other that we have had in my ten years on the Industrial Development Board. It was really important to me to do independent research on what other data centers across the country were getting. The way that I view my job as one voting member of the Industrial Development Board is not to make a decision based on which way the political winds are shifting but to make a decision based on what I think is best for the community that I have been appointed to represent. I'll say that if I had this decision to make over again tomorrow, I would make the same decision.
Now that we're a month out from that decision, late last week, Mayor Woodfin started coming under fire for just the existence of the abatements, took to Facebook and local TV interviews, repeatedly stating that he has no authority over the board and neither does the city of Birmingham. Was there sort of any communication between city officials and board members in that decision-making process?
The mayor was exactly right when he said he has no authority over our board. As part of every project, we reach out to the city and to the county to ask if they have a position on each project. We ask if they want to provide a letter of support, if they intend to or want to oppose a project, or if they are neutral on it.
But I'm looking to learn as much as I can about the specifics with this project. You mentioned reaching out for possible letters of support, whether they have a neutral or negative stance. Did you do that through this decision?
We did.
Was there any sort of feedback?
I mentioned with every project, we reach out to the city's Department of Innovation and Economic Opportunity. When we did so in this case, we did not get back a letter of support or a letter of opposition. The Jefferson County Commission did submit a letter in support of this project. The city of Birmingham did not submit a letter of support, but they also did not submit a letter of opposition. We used all the other factors and set that one aside.
To follow up with Facebook and the mayor's response, you took the time to respond to a bunch of comments. One of those comments was saying that you believe there's a lot of misinformation. Talk me through what the largest sources of misinformation around this are in your opinion.
Yeah, I appreciate the question. This is a complicated subject and a lot of people aren't familiar with economic development incentives in the form of abatements.
There were a lot of people who had reached out both to the mayor, to me, to members of the board who were saying, “Gosh, it doesn't make sense. They're granting $3 billion of abatements and they're only getting $2.6 billion back. Does that mean we're paying $400 million for this project?”
And the answer is no. The way to think about it is, it's kind of like a bulk discount rate that's applied for a bulk purchase. So that was one big source of misinformation.
Another is on the environmental impact. A lot of people see what's happening nationally and there are some very bad actors in terms of data center projects. In this case, that's not what's happening. We consulted with environmental advocacy groups to understand their perspective and every single environmental advocacy group that I spoke to said, “This is the right kind of data center, and we don't have any significant environmental concerns that are local to this site.”
The third most significant misunderstanding that I've seen is people saying that this is a secretive process that's not open to the public. All of our meetings are open to the public. We comply with the Open Meetings Act. We did direct outreach to members of the community to try to take that feedback into account, and we can't force people to come to our meetings.
Is there any sort of way you're looking at your role on the board differently over the past few days?
I think one thing that I've been thinking about the past few days is what we can do better as a board to be accessible and to be more easily understood in terms of what we do in the community. I'll be talking to my fellow board members about ideas that we all have to do that, and I welcome input from anyone listening to this who has ideas.
I think we can do a better job of advertising where and when we meet. We meet the first and third Tuesdays of every month at 9 a.m. at 2117 Second Avenue North. The public is welcome to attend. I will warn you our meetings are usually not very exciting. They are dry and I can count on one hand the number of times in the last 10 years that members of the public have actually chosen to show up to any of our meetings. I used to see reporters in that room at most meetings and it's been a year or two since I've seen a reporter in the room. I suspect that we will have a little bit more interest in our meetings going forward.
WBHM reached out to both the mayor’s office and Birmingham City Council for comment regarding communications with the IDB prior to their approval of the tax abatements. We did not immediately hear back.
