LAPORTE, Ind. – Farmland has become the source of historic levels of new funding for an Indiana community from a Microsoft data center about to go up on the near 500-acre site.

There’s now a push to share that revenue with other local government agencies that normally would have received a cut of the additional money.

What’s been described as an unprecedented amount of new funding stems from a decision by Microsoft not to seek property tax relief on its projected $1 billion investment in LaPorte, and other data centers the technology giant will build elsewhere.

“We’re committed to being a good, responsible neighbor and we’ll pay our full and fair share of local property taxes, adding revenue to local towns and cities,” said Mike Stockwell, a Microsoft land development and permitting program manager. 

Initially, officials in La Porte were pleased with the original agreement from June 2024 that called for the city and school corporation to share about $2.5 million annually over a 40-year period.

At the time, Microsoft was planning to seek tax abatement on the very costly equipment inside the facility but would pay full property taxes on the half dozen buildings that will make up the data center going up just east of U.S. 35.

A new agreement revealed on March 2 calls for the city to collect 85 percent of Microsoft’s entire annual property tax bills with the remaining 15 percent going to the school corporation over 20 years.

Officials did not release specific figures, preferring to wait for the facility to be assessed once it’s constructed before estimating the total amount of new property tax funding.

However, City Councilman Tim Franke said the yearly property tax collections from Microsoft have the potential to “double or triple” the city’s annual $30 million budget.

“If you do the math, it’s a significant amount of money. We’ll see how it all shakes out,” he said.

LaPorte Economic Advancement Partnership Executive Director Bert Cook called the influx of new funds contained in the revised agreement “unlike anything we’ve seen before.”

Franke said it was Microsoft that approached the city about striking a new deal, which was given final approval by the city’s Redevelopment Commission and school board.

LaPorte Schools Superintendent Dr. Sandra Wood said the amount of new revenue for the school corporation from Microsoft was the maximum allowed by the state for educational programs.

She also described the amount of funding in the new agreement as “unprecedented for a public school corporation in our state.”

Wood said there are no strings attached to the funding, which will be spent at the discretion of the school corporation.

Officials expect start receiving some of the funds in 2028 with full payment in 2029.

How the funds are spent will be decided later at some point. 

Mayor Tom Dermody said a lot of the city’s money could go toward major needs such as repairing and upgrading infrastructure like streets that “we’re going to focus on as much as possible.”

Nick Otis, city attorney, said, “I think it will completely change our community.”

School Board President Ryan Seaburg thanked Dermody for his leadership over the new deal and commitment to include the school corporation in the windfall.

“Your vision, Mayor Dermody, to help our schools is appreciated by everyone in the community,” he said.

Typically, property tax revenue generated by new development is spread among the government entities in the county in which the construction has taken place. 

In this case, the city is placing the funds into a tax increment financing district, which allows that revenue to strictly be spent in any of the city’s TIF districts except for the amount owed to the school corporation.

LaPorte County Commissioners Joe Haney and Steve Holifield are among the elected officials wanting some of those dollars to go toward county government. 

Haney and Holifield were recently behind a push to direct any data center construction in the unincorporated areas into the Kingsbury Industrial Park to keep such facilities from gobbling up farmland and becoming an eyesore for any nearby residents.

Haney alleged the city is “basically, holding all of that money hostage for their own purposes. It’s unfortunate.”

Holifield, a full-time farmer, said he received no answer from the mayor when he approached him about revenue sharing.

He said county government should receive a slice of the pie, especially since the data center is going up on land just annexed into the city about two years ago.

Gautama “Goot” Logwood, a candidate for LaPorte County Council, said additional money for county government would come at a critical time when local municipalities are losing funds from statewide property tax reductions.

Logwood said the extra dollars could prevent county government from having to adopt more local income taxes to make up for the lost revenue.

“That kind of money spread around the county could benefit everybody. Not just the city,” he said.

Dermody, though, doesn’t seem open to the idea because many county government officials have expressed opposition to data centers and want to restrict where they can locate.

“I respect their opposition to progress. We’re focused on the city,” he said.