Data Center Campus Project

Overview & Approval

What did the Council approve, and what will be built?

The City Council approved a (1) Development Agreement with Mount Sunflower, LLC and (2) a Resolution of Intent to use IRB-based incentives to build a multi-phase data center campus inside city limits near the corner of W 103rd Street and Edgerton Road.

The project will be developed over four phases with at least one 285,000 sq. ft. data center planned in each phase.

When fully constructed, the project is expected to add nearly 1,140,000 sq. ft. of data center building space over four buildings.

What are some of the project highlights?

• Minimum Private Investment: Developer committed to invest at least $700 million within 7 years (land, buildings, equipment, and site infrastructure) to remain eligible for incentives.
• IRBs & Property-Tax Abatement: During the abatement years (up to 10 years per eligible building), the developer makes set payments (PILOTs – Payments in Lieu of Taxes, based on square footage) to the taxing jurisdictions (i.e. City, County, Fire District, School District, etc). Full property taxes resume after the term ends. Each issuance requires a public hearing and a separate Council vote. 
• Construction sales-tax exemption: Qualifying construction purchases (materials, equipment, certain services) may be exempt from sales tax under the approved Industrial Revenue Bonds – up to $50 Billion in spending.
• Electric Franchise Fee: The City adopted a 3.75% electric franchise fee for power delivered to the data center campus, capped at $5.5M in Year 1 with a 1.5% annual cap increase thereafter.
• Developer-Funded Infrastructure: 100% of required water, sewer, and utility improvements—and any needed transportation/intersection upgrades—are paid by the developer and phased with build-out (in coordination with RWD #7 and utilities).
• Oversight: The developer will submit an Annual Report covering construction status, tenants/operations, employment, and cumulative capital investment; each phase requires a public hearing and separate Council vote.
• Development pays for development: All project costs are paid by the developer/utility partners. The City is not using tax dollars or issuing debt for this project, consistent with other private developments in De Soto.

Community Benefits & Jobs

How does this agreement benefit the community?

• Added General Fund Revenue (through PILOT payments & franchise fees): This means more resources right away to support parks, trails, recreation programs, and other services that directly benefit residents.
  • Franchise Fees: Based on anticipated power use, the City is estimated to receive ~$1.5M per phase per year in electric franchise fees (from electricity sold to the project) at build-out, subject to the project cap of $5.5M in Year 1 (the cap increases 1.5% annually). Context: the City collected about $2.5M in total property tax in 2025.
  • PILOT Payments: The set rate is $0.405 per sq. ft., escalating 1.5% each year. At full build-out (~1.14M sq. ft.), that’s ~$462,000 per year distributed to local taxing jurisdictions. This negotiated rate is nearly twice what was arranged in 2022 for warehouse/ distribution uses at the same site.

• Stronger Long-term Tax Base: After each abatement ends (up to 10 years/building), the City and other taxing jurisdictions receive full property taxes from a high-value, multi-hundred-million-dollar asset.
• Developer-Funded Infrastructure Upgrades: This project will fund significant upgrades to the City’s water and wastewater infrastructure which will greatly enhance redundancy and resiliency of De Soto’s critical infrastructure. The economies of scale associated with producing larger volumes of treated water will tend to lower the cost of water for all users over time. Infrastructure improvements include:
  • New water wells along the Kansas River
  • New raw water transmission mains
  • Expanded and modernized water treatment facilities
  • New elevated treated water storage facilitates
  • New looped treated water distribution mains
  • A new Industrial Wastewater Treatment Facility
• Lower-impact Land Use: The site was previously planned for ~8M sq. ft. of warehouse/light manufacturing. The data center plan is ~1.14M sq. ft. of low-intensity use—meaning far less traffic, noise, lighting, and stormwater runoff than the prior concept.
• Jobs and Local Hiring: Multi-year construction employment and skilled operations jobs; commercially reasonable efforts to use local contractors and vendors.

How many jobs will be created in the community by this project?

• Construction phase: Thousands of construction jobs across all phases
• Permanent operations: 100+ direct employees 
  1. About 30 employees per completed building at campus buildout
  2. Job Types: Skilled technicians and engineers
  3. Projected annual operational payroll: $12 million at full capacity

Will the projects tax incentives affect my tax rates and will I end up paying for the project?

No. Resident tax rates aren’t raised by this package, and taxpayers aren’t paying for the project.

• No City cash or debt. IRBs are conduit financing—no City funds or credit are pledged.
• Developer pays for development. The developer funds 100% of construction and required water/sewer/utility and road upgrades.
• Revenue still comes in. During abatement years the developer pays PILOTs; after the term, full property taxes resume. The City also receives electric franchise fees from the project’s power use.
• Your tax rates are set separately. Property-tax rates (and utility rates) are decided through the normal budget process, not by this agreement.
• Sales-tax exemption ≠ higher taxes. The exemption applies only to project construction purchases within a capped amount and does not increase anyone’s tax rate.

Why did the community only hear about this project as it's headed to the City Council?

This project did not require annexation, rezoning, or a land-use change—the triggers that normally require mailed notices, published notices, or public hearings. Because the property was already zoned appropriately, the developer could pursue this use without additional approvals.

In general, residents are not notified when a private landowner develops their property in ways that already comply with zoning and land-use regulations. For example, if someone builds a restaurant or gym downtown on land already zoned for that purpose, the City does not send notices, hold hearings, or ask residents to vote. The same principle applies here.

Entities & Operations

Who is Mount Sunflower and what does it do?

Mount Sunflower is a full-service data center developer that partners with leading technology companies to operate state-of-the-art data center facilities. 

Who will operate the data centers?

A single, large U.S.-based technology company will be the tenant and operator of the data center campus, and will be announced at the groundbreaking in early 2026. 

This type of confidentiality is very common with large-scale technology and infrastructure projects, especially during the early development phases. The City’s focus has been on ensuring that any agreements we enter into—regardless of the end-user—deliver long-term public benefit and accountability.

Investments, Incentives, & Commitments

Is the City giving away $50 billion in incentives?

Absolutely not – The project is a multi-billion-dollar private investment, and the IRB framework simply defines the conditions under which parts of that investment can qualify for temporary tax abatements or construction sales-tax exemptions. The “up to $50 billion” number refers to the maximum amount of developer investment that could qualify for certain incentive tools over the life of the project—not money the City is giving away, and not City funding.

What is the actual project investment?

The agreement both sets a floor (minimum commitment) and a ceiling (maximum authorization cap), rather than one fixed number:

• Minimum (“floor”): The developer must invest at least $700 million within 7 years (i.e. buildings, equipment, site infrastructure) to remain eligible for incentives. 
• Maximum cap (“ceiling” for incentives): The City authorized incentives on up to $50 billion of total eligible private spending. This ceiling is sized to cover the initial $3.1 billion construction plus recurring equipment and server upgrades every 2–3 years.

Actual spending will be determined phase-by-phase and documented in the developer's annual reporting; the $50B figure is simply the cap on what may qualify for incentives, not a project price tag and not City funding.

What is the City’s Investment?

• Property Tax Abatement (via IRBS) with PILOTs: The City agreed to use the Industrial Revenue Bond (IRB) process to grant up to 10 years of property-tax abatement for each eligible building. During abatement years, the developer pays per-square-foot PILOTs (Payments in Lieu of Taxes) to the taxing jurisdictions; full property taxes resume after each abatement term. IRBs are conduit bonds—the City has no repayment obligation and does not pledge City funds.
• Electric Franchise Fee Cap (Project-Specific): The City will implement a 3.75% electric franchise fee for power delivered to the data center campus (instead of the standard 5%), capped at $5.5M in Year 1 with a 1.5% annual cap increase thereafter.
• City Fee Cap: The City capped specified administrative fees related to the project at $1,000,000 over the first 25 years. The cap does not include building permits, utility fees/usage, special assessments, or defined third-party pass-through costs.
• Water and Sewer Delivery Plan (Developer Funded): The City committed to coordinate with Johnson County RWD #7 and utilities to serve the site, including extending mains along 95th, Edgerton, and 103rd and phasing wastewater capacity to match build-out. All agreed water/wastewater improvements are paid for by the developer.

What is the Development’s Investment?

• Minimum Investment: Developer committed to invest at least $700 million within 7 years (land, buildings, equipment, and site infrastructure) to remain eligible for incentives.
• Phased Construction & Compliance: The developer agreed to build one or more data center buildings (approximately 285,000 sq. ft. each) and supporting facilities in phases, consistent with the City-approved Development Plan and all applicable codes/standards.
• PILOTs During Abatement / Full Taxes After: The developer agreed to make per-square-foot Payments in Lieu of Taxes (PILOTs) to local taxing jurisdictions for each eligible building during its property-tax abatement period (up to 10 years); the set PILOT rate for the data center project is nearly twice the amount that was negotiated in 2022 for the manufacturing or distribution uses at the Flint Commerce Center site. Once the abatement term ends, the developer pays full property taxes.
• 100% Infrastructure Funding: The developer agreed to fund 100% of project-required water, sewer, and utility improvements, plus any required transportation/intersection upgrades, on a schedule aligned to build-out.
• Local Integration: The developer committed to join the De Soto Chamber, prioritize local contractors and suppliers where feasible, and support workforce development initiatives.
• Annual Reporting: The developer will submit an Annual Report covering construction status, tenants/operations, employment, and cumulative capital investment.

What economic development incentives are included in the agreement?

To support a phased private investment, the City approved an IRB-based incentives package—tools that projects can qualify for phase-by-phase, not cash payments. It includes:

• IRB framework (up to $50B authorization): A conduit tool (not City debt) that lets eligible project spending qualify for incentives phase-by-phase.
• Property-tax abatement (per eligible building): Up to 10 years; during the abatement, the developer pays PILOTs (Payments in Lieu of Taxes) on a per-square-foot schedule to all taxing jurisdictions; full taxes resume after.
• Construction sales-tax exemption: On qualifying materials, equipment (including servers), furnishings, and certain construction services, applied within the cumulative $50B IRB cap (a ceiling, not a guarantee of spending).
• Project-specific electric franchise fee:3.75% on electricity sold to the campus, capped at $5.5M in Year 1 with a 1.5% annual cap increase (versus the standard 5%).
• City administrative fee cap: Specified City admin fees capped at $1,000,000 over 25 years (excludes permits, utility charges, special assessments, and defined third-party pass-throughs).

 Each phase still requires a public hearing and separate Council vote; no City funds or credit are pledged.

What are the developer’s minimum investment requirements in order to receive the incentives?

The developer must invest at least $700 million within 7 years (land, buildings, equipment, and site infrastructure) – along with meeting reporting and performance terms – to remain eligible for incentives,

If these requirements are not met, the City may terminate the development agreement and cancel the incentives. 

Are there City protections and/or cost controls?

• No Financial Obligation for Construction: The project development and construction costs are privately funded, no City revenues (other than future property and sales taxes) or City financing is pledged.
• Legislative Discretion: IRB issuance, abatements, and related tax exemptions require separate City Council action for each phase.
• City Fee Cap: The City capped certain administrative fees related to the project at $1,000,000 over the first 25 years. This cap does not include building permits, utility charges, special assessments, or pass-through third-party costs.
• Environmental and Safety Responsibility: The developer assumes all liability for environmental compliance, remediation, and hazardous substance management.
• Oversight and Reporting: The City required annual reports from the developer covering tenants, operations, employment, and investment progress.

Is the City of De Soto paying the developer to build this project within the city?

No.

Is the developer receiving a tax break to locate here?

Yes. Like other large-scale technology investments, this project is eligible for both state-level and city-level incentives. Here’s how they break down: 

State Incentives

• Qualified Data Center Sales Tax Exemption: Kansas law provides a sales tax exemption for constructing or remodeling “qualified data centers.” To remain qualified, the developer must:
  1. Invest at least $250 million within five years of starting operations
  2. Maintain at least 20 new jobs within two years of operations
  3. Commit to purchasing electricity for more than 10 years

City Incentives

• Industrial Revenue Bonds (IRBs):
  1. The City authorized issuance of up to $50 billion in IRBs over the life of the project.
  2. IRBs allow the developer to receive sales tax exemptions on construction materials and data center equipment.
  3. This large cap was set to cover future equipment replacement, inflation, and long-term project needs without requiring repeated approvals.
  4. IRBs are conduit bonds—they are not debt held by the City, do not impact the City’s credit rating, and do not put taxpayer dollars at risk.
• Property Tax Abatement & PILOTs:
  1. Eligible data center buildings may receive up to 10 years of property tax abatement.
  2. During this time, the developer will pay Payments in Lieu of Taxes (PILOTs) to local taxing jurisdictions.

Once abatements expire, the project will return to the full tax rolls, providing long-term growth for the City’s tax base.

Utilities - Water

Where will the data center’s water come from, and how will it be used?

Data centers use water to help cool the servers that run the facility. This project is being designed to use water as efficiently as possible (e.g., recirculating and re-using where feasible).

Source of water: Instead of tapping neighborhood wells or local groundwater, treated water will be provided to the facility by the City of De Soto and Johnson County Rural Water District #7. The City draws water from the Kansas River. Because the Kansas River has substantial un-allocated water rights available, and because De Soto is a member of the Kansas River Water Assurance District, long-term water source supply is secure,  even during dry periods.

Bottom line: The data center’s cooling water will come from a sustainable regional source, not residential groundwater, and will not impact local drinking water availability or affordability.

Will my water or wastewater rates go up because of this project?

No. The data center’s water and sewer needs will be fully funded by the developer and its partners, not De Soto residents. Any required infrastructure improvements will be paid for privately and phased in as the project grows.

City-wide rate decisions are made separately and are not driven by shifting this project’s costs to residents. Conversely, there is reason to believe that the expansion of capacities and increasing volumes of water and wastewater treatment will tend to lower the unit cost of treatment, potentially resulting in lower commodity charges to customers. 

Utilities - Power & Grid

Will the data center use a lot of electricity to run its computer servers?

Yes—like all data centers, this project will require a significant amount of electricity to power and cool its servers. To meet that demand, the developer is partnering with Evergy to ensure the local electric grid has the necessary capacity.

Importantly:

• Developer-funded upgrades: The developer will pay for any electric infrastructure upgrades required to serve the facility. These improvements also strengthen the grid for the City, nearby developments, and residents—without burdening taxpayers.
• Franchise fee revenue: The City collects a 3.75% franchise fee on electricity sold to the project. In Year 1, this revenue is capped at $5.5 million, with the cap increasing 1.5% annually. Actual revenue will depend on how quickly and how much electricity the facility uses, but these fees provide a new, ongoing source of General Fund revenue for De Soto.

Will it put a strain on the electric grid?

No. The electric grid is highly regulated and managed to protect reliability for all customers. Federal regulations require that the power needs of a new project, like this data center, cannot reduce the reliability or availability of electricity for existing customers. 

The developer and Evergy will coordinate on any needed upgrades to ensure the facility operates reliably while maintaining stable service for the entire region.

In short, the data center’s power demand will be carefully planned and supported with the right infrastructure, so it will not strain the electric grid for residents or businesses.

Will the new data center make my electric rates and costs go up?

No. The data center’s electricity use is significant but should not increase rates for De Soto households or businesses.

 Here’s why:

• Large users pay their own way: The developer is responsible for all costs associated with extensions of transmission or substation facilities to serve the project. These costs are not passed on to De Soto customers.
• No discounted rate: The De Soto data center does not receive a reduced or subsidized electric rate from Evergy. In fact, the project is required to use Kansas’ new Large Load Power Service (LLPS) Rate Plan, which is specifically designed to prevent large industrial users from shifting costs onto residential customers.
• State-regulated protections: Evergy sets customer rates through a Kansas Corporation Commission process that looks at system-wide costs – not individual projects. Under the LLPS structure*, large users must carry their full share of costs.
• History of large projects: Other major industrial investments in the region have not caused rate increases for existing customers – neither from higher energy demand nor from utility upgrades related to those projects.

In short, the project adds new revenue to the City through franchise fees, but residents’ electric bills are not expected to be impacted by the data center.

What is Kansas’ new Large Load Power Service (LLPS) rate plan, and how does it relate to the data center?

Kansas’ Large Load Power Service (LLPS) rate plan is a new state-approved electric rate structure created specifically for very large power users; the LLPS rate structure applies to customers who expect more than 100 MW of demand and at least 75 MW in any month.

The De Soto data center project meets these thresholds and is required to follow the LLPS rate plan.

The LLPS structure – developed through a unanimous settlement supported by Evergy, environmental organizations, and the Citizens’ Utility Ratepayer Board – protects residential and small-business customers by:

• Requiring long-term commitments: A minimum 12-year contract, plus up to 5 yearsof ramp-up.
• Limiting reductions: Once the service contract is set, the user cannot significantly lower its demand commitment.
• Imposing strict penalties for exiting an agreement.
• Ensuring minimum payments: Large users must pay for at least 80% of their contracted demand each month, even if they use less.

What this means for De Soto:

These safeguards ensure that large industrial users – including the data center – pay their full share of costs and cannot shift expenses onto residential ratepayers.

This is one of the key reasons the data center is not expected to increase electric rates for De Soto households or businesses.

Taxes & Schools

Will tax incentives affect my tax rates and will I end up paying for the project?

No. Resident tax rates aren’t raised by this package, and taxpayers aren’t paying for the project.

• No City cash or debt. IRBs are conduit financing—no City funds or credit are pledged.
• Developer pays for development. The developer funds 100% of construction and required water/sewer/utility and road upgrades.
• Revenue still comes in. During abatement years the developer pays PILOTs; after the term, full property taxes resume. The City also receives electric franchise fees from the project’s power use.
• Your tax rates are set separately. Property-tax rates (and utility rates) are decided through the normal budget process, not by this agreement.
• Sales-tax exemption ≠ higher taxes. The exemption applies only to project construction purchases within a capped amount and does not increase anyone’s tax rate.

Will the taxes paid by the project benefit area schools and the community?

 Yes. The project generates revenues during construction and operations—and over time those dollars support schools and local services.

• Schools receive revenue during abatements. While eligible buildings can receive a time-limited property-tax abatement, the developer must make PILOTs (Payments in Lieu of Taxes) each year, which are distributed to local taxing jurisdictions (including schools). Kansas law also protects the school district’s capital outlay levy (up to 8 mills) from being abated. 

• After abatements end, full property taxes resume. Each building’s abatement lasts up to 10 years; when it expires, the project returns to the full tax rolls. 
• Estimated school impacts (from the City’s cost-benefit analysis):
  • USD 232:~$101 million
  • Local community colleges:~$13.4 million
  • (Estimates depend on build-out timing and valuation; see the City’s CBA for methodology and assumptions.) 

Bottom line: Schools and community services see revenue during the abatement period (via PILOTs and protected school mills) and even more once full taxation begins.

Neighborhood Impacts

Will this facility be noisy?

Short answer: no—day-to-day operations are expected to be quiet.

• Cooling systems: Data centers use enclosed equipment and sound-dampening walls/screens. The result is a steady, low hum that remains within City noise limits and is far quieter than a typical manufacturing use.
• Backup generators: These are tested briefly and infrequently (per permit requirements) and run during rare emergencies. Testing is scheduled to minimize disruption.
• Location matters: The campus sits in the Flint Commerce Center industrial corridor, bordered by K-10, which produces higher ambient noise than the facility itself and has few nearby homes.

Also, unlike warehouses, the campus will not have loading docks or heavy truck traffic, further reducing noise.

Data Center Background

What is a data center?

• Data centers house the computing infrastructure that enables critical functions across a wide variety of industries. 
• This data center will be filled with servers that process and store data commonly referred to as “the cloud,” and the equipment to make it possible like fiber cables and power and cooling structures. 
• Data centers are the physical foundation of our digital economy. Kansas residents rely on data centers daily for email, social media, video streaming, and essential services including healthcare data access, remote work capabilities, and e-commerce deliveries.
• Domestic data center infrastructure ensures American communities and companies maintain control over critical digital assets necessary for national security.

What are some facts about data centers and their importance to our daily lives and modern economy?

(Source: Data Center Coalition, February 2025)

• Data centers are the backbone of the internet, fueling U.S. growth and national security. They make common tasks and amenities like grocery shopping and streaming possible but also support serious pursuits like storing scientific databases.
• Data centers provide cost-effective digital services provided on a massive scale, driving innovation and growth across various sectors and making advancements in Artificial Intelligence (AI) possible. Developing and operating AI across the United States is vital to national security.
• Studies show the U.S. data center industry directly employed more than 600,000 workers and supported 4.7 million jobs in total in 2023. The sector generated $404 billion in total labor income and contributed $162.7 billion in federal, state and local taxes in 2023, providing consistent funding for important community priorities like public safety, education and transportation.
• Nationally, each position that supports a data center’s operation supports more than six jobs elsewhere in the American economy.

What is Artificial Intelligence and what do data centers have to do with it?

Artificial Intelligence (AI) is software that learns from data to recognize patterns, make predictions, and generate or assist with content—like autocorrect, spam filters, voice assistants, fraud detection, map directions, product/music recommendations, and newer tools that summarize, translate, or create images and text.

 How data centers fit in:

• Compute power: AI needs huge amounts of computing—especially specialized chips—to train models and then run them every time you ask a question or make a request.
• Data & storage: The information AI learns from and uses lives on servers; data centers store and manage it.
• High-speed networks: AI services move lots of data quickly between users, apps, and servers; data centers provide the backbone for that traffic.
• Reliability & efficiency: Purpose-built facilities deliver stable power, cooling, and security so AI services stay fast and available.

In short: AI is the brain; data centers are the body—the place where the computing, storage, and networking that make AI possible actually happen.