Massive data center wins local tax break — but 9 times smaller than requested
Saline Township in Washtenaw County, Michigan, approved a controversial tax break for "The Barn" data center project, developed by The Related Cos. for Oracle and OpenAI. While the township was bound by a court order to grant a 50% tax break, they significantly reduced the valuation basis for the subsidy, cutting the requested $147 million tax break to less than $20 million annually. Residents voiced strong opposition to the project during the board meeting.
Saline Township in Washtenaw County, Michigan, has approved a controversial tax break for "The Barn," a 250-acre data center project. The project, valued at $43 billion and developed by The Related Cos. for Oracle and OpenAI, sought a substantial tax subsidy. However, the township board significantly scaled back the requested tax break, approving it based on an original project valuation of $4.8 billion rather than the developer's updated $43 billion figure.
The decision means a proposed $147 million annual tax break will now be less than $20 million per year. Township Supervisor Tom Hammond indicated that the township was legally bound by a court order, following a lawsuit by The Related Cos., to approve a 12-year, 50% tax break. The board’s compromise involved approving the tax break on the original, lower valuation and adding a "clawback" provision allowing the township to reclaim unpaid taxes if the project is not completed or operational for the full 12-year abatement period.
Residents vocally opposed the project for nearly two hours, echoing concerns from a previous meeting that led to a delay in the vote. A spokesperson for The Related Cos., Kathleen Corless, stated the company is "evaluating the validity of the Board’s actions" and assessing the township's "legal obligations under the consent judgement," suggesting potential future legal challenges.
This local decision highlights a broader statewide debate on subsidies for data centers, especially following a 2025 law championed by Gov. Gretchen Whitmer that exempts such projects from state and local use taxes, intensifying requests for property tax cuts from host communities.