Effingham County data center deal discount

SAVANNAH, Ga. (WTOC) -A newly uncovered paper trail reveals that Effingham County leaders locked in a massive tax break for a $20 billion dollar OpenAI data center months before the public heard a single word about the project.

The records, which include a signed Memorandum of Understanding and internal emails, outline how Effingham County Industrial Development Authority CEO Brandt Herndon, Vice President Jessica Hood, County Manager Tim Callanan, and School Superintendent Yancy Ford negotiated the massive project under non-disclosure agreements starting in early February.

According to the emails, an OpenAI physical infrastructure official circulated a mutual non-disclosure agreement on Feb. 2, requesting county officials to review and sign the document before receiving confidential briefings.

Neighbors have expressed intense frustration about the closed-door discussions.

“If it’s such a great thing for this area, why isn’t it being done out in the open where everybody can have their questions answered,” said Effingham County resident Wade Britt. Resident Katie Broome echoed those concerns, saying officials should have given the community a heads-up on what they were trying to do.

Just one day before the public announcement, the Effingham County Industrial Development Authority signed a Memorandum of Understanding on July 21 with Octans GA, LLC, an affiliate of OpenAI. The contract maps out a multi-year, five-phase timeline on a 1,400-acre site, with the first phase targeted to begin construction by late 2028 and the entire project completed by the end of 2034.

To secure the deal, the county approved a special Payment in Lieu of Taxes, or PILOT, agreement that gives the artificial intelligence giant a massive tax discount.

While standard property taxes in Georgia are calculated based on 40% of a property’s fair market value, this special formula assesses the OpenAI affiliate at just 25%. The discount effectively slashes OpenAI’s property taxes by 37.5% annually for the first 15 years of each project phase.

County officials argue the tax break is a necessary trade-off to bring the company to Effingham County. In exchange for the discount, the county secures a guaranteed $20 billion capital investment on land that currently generates almost no tax revenue. The project also promises to create at least 400 new long-term jobs, averaging 80 jobs per phase.

“It’s going to provide a lot of opportunity adding a much higher pay rate than a lot of the jobs that have been created in the county recently,” Effingham County Manager Tim Callanan said.

County leaders and OpenAI also estimate the new tax revenue could eventually reduce average homestead property taxes by up to 40%. Meanwhile, OpenAI claims the site will use minimal water, will not deplete the local water supply, and will not increase electricity rates for surrounding neighbors.

For more information on the project, click here.