The Potential Economic Impact of Project Tango
Bottom Line: Today the Palm Beach County Commission will vote on the proposed AI-data center project known as Project Tango. The vote comes amid significant local resistance to the proposal and following the killing of similar projects recently in Martin County and Okeechobee counties, in addition to other parts of the state. A key concern voiced by opponents of data centers has been the potential cost and environmental impact of power and water resources as many communities across the country have been negatively impacted by a lack of planning and regulation in advance of the construction of these facilities.
The state of Florida addressed these concerns through a law signed in May by Governor DeSantis that took effect on July 1st. Under state law no costs may be passed along to consumers, and the industry is now fully regulated. Nevertheless, opposition persists, and this recently included a vote by the county’s Zoning Board which recommended county commissioners reject the proposal. However, what hasn’t commonly been discussed is the potential lost economic opportunity should the project be rejected as others before it were as well.
If completed, Project Tango would probably rank among the largest economic development projects ever undertaken in Palm Beach County in terms of capital investment and property tax generation. Here’s a rough estimate of the potential economic impact of Project Tango:
- Construction costs $2+ billion
- Thousands of construction jobs through 2032
- 400 permanent jobs
- $460 million in annual property taxes
Specific to the property tax piece with property taxes revenues in focus here’s what would be given up annually:
- about $177 million to the School District
- about $97 million to Palm Beach County Fire Rescue
- about $44 million to the Sheriff's Office
The easy decision is to maintain the status quo, which is what is largely expected to be the case with today’s vote. However, the opportunity cost as outlined is likely far more significant than most have begun to consider. This is independent of longer-term considerations about having the infrastructure in place for our state to continue to lead economically in the AI age, and longer-term considerations about the international AI race. Specifically, China not only has adequate data center supply to support its current activities, but they’ve also built excess data center facilities so that the country won’t be slowed as growth continues to ramp up. The combination of China’s data center aggressiveness and consistent resistance within the U.S., runs the risk of tilting the balance of power to China in the years to come. There’s much more to this story.