TCEDA: $3.2B Brookwood Data Center To Generate $131.5M For Area Schools

TUSCALOOSA, AL — Area leaders announced Thursday that a planned $3.2 billion data center development in Brookwood is expected to generate more than $440 million in tax revenue and community benefit payments over the next two decades, including an estimated $131.5 million for local schools.

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The Tuscaloosa County Economic Development Authority (TCEDA) officially unveiled Project Highlands on Thursday, which comes after months of contention over the project and backdropped by a bigger national debate regarding the impact of data centers.

TCEDA said Applied Digital will develop the data processing center, with Kayvens LLC serving as the long-term tenant.

Applied Digital said the project — dubbed Delta Forge 2 — will span approximately 1.26 million square feet across roughly 160 acres of a nearly 1,300-acre site in Brookwood.

The company said the project is expected to become the single-largest taxpayer in Brookwood’s history.

Applied Digital Chairman and Chief Executive Officer Wes Cummins said the project reflects the model the company is building across its footprint, consisting of repeatable AI infrastructure delivered at scale and built for the long term

“But our success also depends on the success of the communities where we operate," Cummins said. "We partner with communities where our investment genuinely matters, and where the resulting jobs, tax base, and long-term economic activity can have a measurable impact. We have a proven track record of delivering on our commitments to our host communities, and we look forward to bringing that same commitment to Brookwood.”

Construction is expected to begin in October and be completed by the end of 2028.

As part of the project, TCEDA said more than 1,000 construction workers are expected to be employed during development, while the completed campus is projected to create more than 100 permanent jobs.

The facility is expected to encompass roughly 1.3 million square feet.

“For our community, this project is about creating opportunities for local families, strengthening our schools and positioning Brookwood for the future,” Brookwood Mayor Joe Barger said. “We anticipate that Applied Digital will be a good neighbor and a long-term community partner and expect this $3.2 billion investment to benefit Brookwood residents for generations to come.”

According to TCEDA, the approximately $131.5 million projected for education over 20 years includes $101.6 million in property taxes and $29.9 million in sales and use taxes.

Education taxes are not included in the project's tax abatement agreement.

Local leaders said those estimates also do not account for potential future equipment upgrades, additional construction or expansion, meaning the eventual amount of educational tax revenue could be higher.

This comes at a time when any supplemental funding would be no-doubt appreciated by the metro's two public school systems, which have faced public funding struggles after two separate failed property tax referendums geared toward providing the respective school systems with more revenue.

Tuscaloosa County Probate Judge and County Commission Chair Rob Robertson called the development a “next-era economic opportunity” that would create new funding streams for schools and the broader community.

Apart from the education tax revenue, TCEDA said the project will provide $270 million in community benefit payments, which the authority said makes it the first data center development in Alabama to include such payments.

Under the agreement, TCEDA explained that the developer will make 20 annual payments of $13.5 million once the facility is placed in service.

TCEDA then said that money will be shared among the cities of Brookwood, Tuscaloosa and Northport, along with Tuscaloosa County, the Tuscaloosa County Road Improvement Commission and DCH Healthcare Authority.

In exchange for the investment, community benefit payments and required construction specifications, TCEDA approved a 20-year non-educational tax abatement for the project.

The project is estimated to receive approximately $314.5 million in eligible property, sales and use tax abatements during that period, according to the announcement on Thursday. State law allows qualifying data centers to receive abatements for up to 30 years.

The authority said no public money will be paid directly to the developer and the agreement contains no rebates or refunds.

What's more, the abatement applies only to the planned 160-acre campus.

Applied Digital has acquired approximately 1,283 acres north of the 17000 block of Brookwood Parkway, but TCEDA said the remainder of that property is not covered by the agreement.

TCEDA said any additional data center campus or major investment on the remaining land would require a separate review and new agreements before moving forward.

The agreement also includes requirements aimed at addressing potential environmental and quality-of-life concerns associated with the development — something that has been at the center of the data center debate in Brookwood.

Patch news partner AccuWeather recently cited research by the University of California, Riverside that insists a 100-word AI prompt uses one bottle of water or roughly 519 milliliters.

With more than 5,000 data centers in the United States, experts say the sector uses nearly half a billion gallons of water each day — consumption that will only increase as these facilities evolve in number, scope and complexity.

This is where officials want the public to understand that the Brookwood project is different from other data center concepts that use far more in the way of resources.

Most importantly, TCEDA officials point out that the Brookwood facility must use a closed-loop water cooling system that circulates coolant through sealed pipes rather than continuously drawing water for cooling. Backup generators must also be enclosed inside the facility to limit noise pollution.

TCEDA also said large-load customers such as data centers are required in Alabama to pay the full cost of serving their electricity needs, preventing those costs from being shifted to other Alabama Power customers.

“Applied Digital has established a strong reputation for innovation and excellence, and we are excited to see that commitment reflected in the design and development of this state-of-the-art facility,” TCEDA Executive Director Justice Smyth said. “We believe this project will be an important addition to Brookwood and to the broader Tuscaloosa County community.”

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