How Tax Abatements Are Distorting Data Center Land Prices Across States
Two physically identical parcels in neighboring counties, with the same power capacity, can differ in price by 20 to 30% once a data center tax abatement is in play. The raw land is worth the same on both sides of the county line. What differs is the total cost of running a data center on each parcel over the 15-to-20-year horizon that most hyperscale and enterprise facilities are built around. A property tax abatement of 50 to 100% for 10 to 20 years never appears as a line item in a land comparable. It appears in the bid price, and it explains why the county offering the abatement wins the deal. For developers, site selectors, and investors who rely on raw land comps as their main market signal, this is a systematic blind spot. Land in a high-abatement jurisdiction does not trade at its raw economic value. It trades at a value that already includes the captured incentive. Any reading of land comp data has to start with understanding the incentive landscape of the target geography....