Titus calls on Lombardo to freeze data center tax abatements

The Townsite Data Center – proposed by developer Townsite Solar 2 LLC – is the only data center that BLM has approved on public land, according to the agency. The departure from typical land use makes the development relatively novel, raising questions about how the state should address tax incentives for the growing industry, said Titus.

The project “may be the first data center built on land owned by the Bureau of Land Management,” Titus noted. “How the regulatory approval and state incentive processes are applied to this project will have immense consequences for the future of data center development across the Silver State, which is approximately 88 percent public land, and potentially across the country,” Titus wrote.

The project is in her congressional district.

“Given the budgetary shortfalls facing our state and local governments in Nevada, this raises questions about why the State tax abatements should be incentivizing the development of data centers on public lands,” Titus wrote in the letter. 

The development was awarded property and sales tax abatements by the Nevada Governor’s Office of Energy in 2024. Under that agreement, the data center would receive more than $24.3 million in tax abatements over 20 years. 

However, those incentives were originally approved for the construction of a solar power generation and battery storage facility under the state’s Renewable Energy Tax Abatement program. 

Townsite Solar 2 LLC received federal approval in 2023 to build a solar power generation and battery storage facility on 80 acres of federal land, but requested an amended right-of-way grant to build a data center instead, which BLM approved in June.

“I also have questions about whether the State renewable energy tax abatements that your Administration previously approved for Townsite Solar 2, LLC will still hold, given the changes to the type of project and its scope,” wrote Titus in the letter. 

Lombardo’s office did not respond to a request for comment as of Thursday afternoon.

In the letter, Titus noted that former Director of the Governor’s Office of Energy Dwayne McClinton said the agency would terminate the abatement approval if the project “ceased to meet any eligibility requirements for the abatement.” 

Last week, the Boulder City Council voted unanimously to appeal BLM approval of the project which was originally proposed on city-owned land. The city’s planning commission had voted unanimously in May not to recommend the construction of the data center on city-owned land.

Titus questioned whether the Townsite Solar 2, LLC project would have the same economic benefits for Boulder City now that it’s being proposed on federal land. In her letter, Titus notes that Boulder City would have received an estimated $2.3 million in additional revenue if built on city-owned land

“Now, any fees associated with the (right-of-way) grant on BLM land will go to the federal government,” Titus wrote. 

The proposed Townsite Data Center is not the only one to receive generous tax abatements. Over fiscal years 2023 and 2024, the most recent for which details are available, property tax breaks provided to data centers totaled $13.3 million, and sales and use tax breaks totaled $225.6 million, according to the Nevada Department of Taxation.