Data Center Development | Economic Benefit and Tax Abatements: As Temple considers proposed data center development and economic development incentives, an important question is: How does the community benefit?
As Temple considers proposed data center development and economic development incentives, an important question is: How does the community benefit?
At full buildout, currently estimated in FY 2031, Rowan’s three proposed phases are conservatively projected to generate more than $40 million annually in revenue for the City of Temple, while the abatements are estimated to be approximately $14 million annually during the 10-year period. The first phase is expected to be completed in 2029, with City revenues increasing as additional phases are completed.
The projected City revenue is in addition to other proposed community and economic benefits associated with the project, including:
- More than $30 million in proposed contributions from Rowan toward public infrastructure
- Additional tax revenue for other local taxing entities
- A commitment by Rowan to create and retain 120 full-time jobs across the three phases.
This increased revenue from new development benefits Temple residents today by helping support essential City services and infrastructure, while also providing resources to address future needs and invest in the community as Temple continues to grow.
Economic development incentives are evaluated based on the project’s level of investment, commitments, community benefits, infrastructure needs, and long-term value to Temple.
What is a tax abatement?
A tax abatement temporarily reduces a portion of a company’s property taxes. It does not mean the company pays zero property taxes; the unabated portion is still paid. The maximum term for a tax abatement is 10 years. Companies must meet specific investment and performance commitments to receive an abatement. If those commitments are not met, the company will not receive, or may lose, the tax abatement benefits.
What is being considered by the Tax Increment Reinvestment Zone No. 1 Board on September 2?
On September 2, the Tax Increment Reinvestment Zone (TIRZ) No. 1 Board will consider an amendment to the existing tax abatement agreement authorized by the City Council in October 2025. TIRZ Board approval is required because a portion of the property is located within the TIRZ and a portion of the property tax revenue generated within the zone is deposited into the TIRZ fund. The amendment is currently anticipated for consideration by the City Council on September 17.
The proposed amendment strengthens the existing tax abatement agreement in three key ways:
- It prevents a company or affiliate that already has its own tax abatement agreement from also receiving benefits through another company’s agreement.
- It clarifies that temporary on-site electrical generation does not count toward the company’s required investment and is not eligible for tax abatement.
- It provides that a company may lose its abatement benefits if it continues relying on temporary on-site electrical generation for long-term power needs rather than transitioning to permanent grid service.
The proposed amendment does not:
- Reduce the company’s investment commitment.
- Extend the abatement period.
- Grant any new incentives.
What is City Council considering September 3?
On September 3, the City Council will consider several items related to current and future data center development in Temple.
Council will consider proposed amendments to the Unified Development Code (UDC) establishing development requirements for data centers, as well as amendments to the City’s Code of Ordinances establishing requirements for Utility Service Agreements for certain industrially zoned developments or special utility projects.
Council will also consider the first reading of voluntary annexation and zoning requests for property associated with Rowan’s Phase 1B (Project Lasso). The proposed zoning is Planned Development–Light Industrial (PD-LI). Planned Development zoning allows the City to include and enforce development conditions for the property.
Additionally, Council will consider designating the property for Project Ranger (Phase 3) and Project Lasso (Phase 1B) as Tax Abatement Reinvestment Zones (TARZs). A TARZ identifies an area that may be eligible for tax abatement. Designating a TARZ does not grant a tax abatement or make the property tax-exempt. Any abatements require a separate agreement and City Council approval.
Learn more about data center development in Temple at templetx.gov/datacenters.