What is the Tax Incremental District 5 (TID)?

What is TID 5?

Tax Incremental District 5 is a financing tool the City intends to use to support Vantage’s data center campus and related city utilities. Vantage fronts the money. The City pays Vantage back over time using the new property tax growth inside the district, called the “increment.”

The price tag

• Total projected reimbursements and costs:$458.6 million
  
  • Developer reimbursements: $455.4 million
    
  • City admin and third-party costs: $3.15 million
    
• Within the $455.4 million, labeled “public improvements”: about $175.5 million for water and wastewater projects the City says benefit the broader system.
  
• Other reimbursable items: about $279.9 million ($455.4 – $175.5 = $279.9) for electric substations, interest Vantage earns on fronted costs, payments tied to annexation, and third-party and administrative fees.
  

The 7% interest

The plan pays interest to Vantage at 7%, totaling about $187.5 million over the life of the district. That rate choice materially affects how long Port is paying before it keeps any new tax revenue from the site.

How repayment works

• The City collects the tax increment from the new Vantage value inside TID 5 and uses it to make annual “development incentive” payments back to Vantage.
• Payments come from the increment. The City has to approve the payments each year in its budget, so they’re not automatically guaranteed.
• The plan is not a blank check for 100% of taxes in all cases, but the projection dedicates essentially all increment to reimbursement until costs are repaid.
• The plan also includes a separate reimbursement: Vantage is repaid for certain non-increment property taxes above what would have been due if the site were set at a $120 million base. That is an additional incentive that sits outside the increment math.
  

Projected timeline: The model shows payoff in about 18 years. State law allows up to 20.

What Port gives up during the TID

• You do not keep the growth in taxes from this site until the reimbursable costs are repaid. Existing base value continues to the usual taxing bodies, but the new growth is locked for reimbursements during the TID.
  
• Prior tax revenue on these parcels is gone as they convert to the data center campus. Port does not keep new site-related taxes for roughly 18 years under the projection.
  
• Opportunity cost: Choosing this project means saying no to other uses. Could the land support employers who pay taxes immediately, carry lower environmental risk, or hire more local residents per acre, for example a headquarters or a mix of smaller businesses
  

Why the payback takes longer

Two design choices slow the turnaround for Port:

1. Paying interest at 7% on a very large reimbursable balance.
   
2. Reimbursing major items that are not traditional city capital assets, like $91 million for electric substations, along with third-party fees and other pass-through costs.
   

Remove or resize either factor and the City would keep new tax revenue sooner.

What residents should be able to see

Port deserves side-by-side comparisons:

• Option A: With the data center, including all modeled water and sewer upgrades, interest, and incentives, and what that means for your bill over 18 years.
  
• Option B: Without the data center, with the utility upgrades the City must do anyway and their costs spread across customers.
  
• Option C: Alternate land uses that pay taxes immediately and do not require a multi-decade reimbursement.
  

The concentration risk after year 18

When the TID closes and Port keeps Vantage taxes, it can look like a win. The risk is a single taxpayer dominating the tax base. If one payer becomes a very large share of total levy, the community gains a short-term revenue boost but loses bargaining power. That can pressure future decisions in ways residents do not want.

The long tail if Vantage leaves

After the TID dissolves, the City could be responsible for significant ongoing maintenance of expanded infrastructure. If Vantage scales down or exits, the utility system and the budget still need to be supported.

Bottom line

• Vantage fronts the cash.
  
• Port repays primarily through the new tax increment for about 18 years.
  
• Roughly $175.5 million is framed as systemwide water and sewer improvements.
  
• Roughly $279.9 million covers substations, interest at 7%, annexation payments, and various fees.
  
• Until payoff, Port does not keep the new site-related taxes.
  
• Residents should see apples-to-apples scenarios before the City commits, including a version without the data center and versions with different land uses.