SADOW: Data Center Surge May Give Port Bills Traction

For Republican state Rep. Danny McCormick, it’s not just a matter of trying again, but of trying harder to correct potential secret government overreach on property rights, as the issue becomes amplified by Louisiana’s data center boom.

McCormick has been a persistent critic of the alienation of property without owners having sufficient say over what happens to their possessions. In his second term in office, he has sought to shield owners from overaggressive expropriation, the side effects of carbon sequestration, and, in particular, the ability of the Port of Caddo-Bossier to impose its will across the two parishes.

In 2021, a law was passed that effectively gave the Port Commission — an appointive body chosen by area governments — the authority to make economic development deals anywhere in the two parishes without oversight by other elected officials or bodies. Other local governments could neither provide input into those deals nor even know details about them during the negotiating phase. This authority included tax abatements that could detract from revenues for those governments.

In 2024, McCormick tried to pass a bill — essentially a repeat from the 2023 session — granting a couple of fire districts a say in Port decision-making over contracts that included a payment-in-lieu-of-taxes option. This arrangement, a leaseback structure that waives local taxes for an entity while requiring some payment below the taxes otherwise owed, serves as an alternative to the state’s Industrial Tax Exemption Program. Under ITEP, the state similarly can override local property tax collection for an entity — even up to 100 percent for five years — although major local governing authorities may submit recommendations to the state Board of Commerce and Industry, which makes the final decision about whether to grant an exception.

That bill didn’t make it, so McCormick came back last year with a similar but broader version. This one applied to the entire two-parish footprint and would give consultation and veto rights to each parish’s government, school district, and sheriff. It hardly was dissimilar to ITEP prior to recent changes that stripped the veto right of the select local governments. That effort also met with defeat; in fact, almost every significant local government was against it.

Yet time may be on McCormick’s side with the rapidly-accumulating interest of data centers in setting up shop in the two parishes. Several land deals associated with data center operations have recently come to fruition, and multiple local governing authorities have passed measures designed to aid in center location and operation. These developments have stirred a segment of the citizenry to become skeptical — if not outright opposed — over concerns about secrecy surrounding deals that could affect them but over which they appear to have little control.

McCormick has indicated he will try again this legislative session to clip the Port’s wings with something similar to last year’s effort: consultation and veto by the three kinds of governments. He also seems poised to offer additional bills that could increase local government control over the Port.

At least two Caddo Parish commissioners, Republicans Grace Ann Blake and Jean-Paul Young (the latter having voted for a resolution opposing last year’s bill), appeared skeptical at the meeting where McCormick announced his intentions. Their lines of inquiry portrayed it as hostile to data center location when it is nothing of the sort, as if it were assumed the mere fact of consultation and veto authority would harm chances of landing these big fish.

At first glance, that makes no sense given the presence of ITEP. If a firm didn’t like the idea of going through the Port because it thought an enacted consultation and ratification provision decreased its chances of a successful deal, why not head to ITEP where they could possibly have a total exemption for up to ten years? That appears even better and would moot concerns about the nascent bill.

Except this doesn’t take into account the extraordinary power granted the Port for these deals. Theoretically, it could cut a PILOT deal for up to 99 years with the “payment” being zero and throw in a host of other things, such as extremely low financing costs using its power to tax Caddo and Bossier property owners. But perhaps most advantageously, it can conduct all of this in secret through nondisclosure deals impossible through the very transparent ITEP process. Even just a consultative power that would require action in public would put details out in the open.

Economic development realities acknowledged, it remains unwise for a local unelected body to wield such expansive power over citizens’ lives, particularly in secret. There is no good reason a two-parish, mini–Department of Economic Development — one sitting on fat budgetary reserves through ad valorem taxing authority and state subsidization — should have so much power. Its wings need clipping, and whatever bills McCormick introduces could be a good starting point.

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