February 6, 2025

Abilene City Council weighs large tax abatement for Lancium

Abilene City Council weighs large tax abatement for Lancium
ABILENE, Texas (KTAB/KRBC) – Just last month, the Stargate project was announced for Lancium in Abilene, sparking excitement among residents about its impact on the Key City. This major development will bring high-paying jobs, boost real estate, and expand shopping opportunities. On Tuesday morning, the Abilene City Council held a special meeting to discuss potential tax-saving proposals for Lancium.

Abilene City Manager Robert Hanna explained that a second tax abatement on Lancium would benefit the city and keep it competitive against other cities in Texas competing for these facilities.

“This is a reinvestment zone, second reinvestment zone; it’s about 940.89 acres. It encompasses advancing properties. It’s for future and proposed prospects that we’re trying to facilitate. This reinvestment zone has to be enlarged to accommodate the new property Lancium has,” explained Hanna. “All we’re doing is a tax abatement; that tax abatement, though, just running the initial numbers on the first agreement that we have in place over the life of that 20-year term, we’re talking 70, 80, $90 million worth of return to the taxpayers of Abilene in revenue that we weren’t going to get otherwise.”

Hanna added that if Lancium were required to pay taxes in full, there wouldn’t be enough revenue to cover the project’s cost.

“Yes, it’s a large tax abatement, but the dollars that are being associated with this and these improvements, the amount of investments taking place, if they’re required to pay their full tax burden, there’s no way they could build the property. They couldn’t do the project. There wouldn’t be enough revenue generated to cover the taxes,” Hanna said.

City Councilman Blaise Regan summarized that this potential tax abatement would benefit the Key City by allowing room for growth. He emphasized that the more Lancium expands, the more funds the city will ultimately receive.

“We’re doing a tax abatement on this section as an expansion. However, we have an agreement where we will get a percentage every year from the company so that we are getting millions, in fact, from the company over the life of this project,” added Regan.

Hanna provided a more detailed breakdown of how much money Abilene will receive in return.

“On the tax abatement side, it’s 15% of their tax liability. So, we’re abating 85%, and we get 15%. Those numbers are millions of dollars in receipts,” Hanna shared.

Abilene resident Samuel Garcia attended the special called meeting to voice his concerns about the project. Speaking to the council, he reminded them that this month marks the four-year anniversary of the devastating freeze Texas faced in 2021. He pointed out that six people in Taylor County lost their lives due to the extreme weather while the city suffered widespread electricity and water outages.

“The way I understand it, these plants are going to use a tremendous amount of electricity and water. I want to know what is the city’s plan if we have another one of these episodes that we just had where people died, and 20,000 households lost electricity. What happens with the usage of electricity and water by this facility if we were to have one of these? What plan do we have to do… who gets the electricity and who gets the water when it rolls?” Garcia asked.

He wishes to see more transparency and details released about this project as they are released. Garcia also stressed the importance of considering all potential risks a project of this scale could bring to the community.

Another Abilene Resident, Tammy Fogle, raised similar concerns about the resources this project is using.

“Just how is this going to impact our community resource-wise? I would assume that you all have thought through that, but what does it look like for this company? Are they going to be contributing something since they’re going to be expanding the need for the resources?” shared Fogle.

In response, Hanna explained that Lancium will not negatively impact the city’s water or energy supply.

“The cooling systems that data centers use can be water intensive. This particular system is a closed-loop system. When they discharge water, we’re looking at industrial pretreatment to be able to push the water back into the stream cycles so that we can use it later again once it gets back to our streams and rivers. They plan to have a lot of energy there that they’re producing on-site through green energy, which is one of their whole selling points,” said Hanna. “The other thing they have is their location in Texas between the eastern or the northern and western nodes, and ERCOT gives them the opportunity to leverage energy that the grid may not be using. Energy is sometimes wind and solar, but it isn’t being put on the grid because it’s not necessarily needed. They can take that energy and use it. That’s one of their competitive advantage is their ability to switch this over very quickly.”

Click here to watch the special called meeting. This topic will be discussed further at the next City Council meeting on February 13.


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