(The Center Square) — A small Louisiana town that generated just $3 million in revenue last year will receive a one-time payment of $4 million from a company building a multibillion-dollar artificial intelligence data center nearby, providing a potential financial windfall for a community struggling with aging infrastructure.

The town of Boyce in Rapides Parish reached a community benefit agreement with Applied Digital, the company developing the $3.6 billion Delta Forge 1 AI Factory, officials announced Oct. 14.

The agreement exceeds the town’s entire annual revenue of approximately $3 million in fiscal 2024, according to financial statements filed with the Louisiana Legislative Auditor. Boyce’s general fund, which supports basic government operations, generated just $1.5 million that year, making the agreement worth nearly three times its annual general fund revenue.

The money is intended to support infrastructure improvements, community projects and economic development, although officials have not publicly detailed how it will be allocated or when the payment will be made.

State Rep. Jason DeWitt, R-Boyce, told The Center Square that he has encouraged town leadership to prioritize repairs to Boyce’s aging water and sewer systems.

“The town of Boyce is just basically papier-mâché, most of their infrastructure, water, sewer,” DeWitt said. “That’s something that would just be vital for our area.”

He said improving those systems would help position the town to attract additional businesses and jobs as industrial development expands throughout the region.

“We can grow our town and grow our community and bring on more industry and jobs to our area,” DeWitt said. “That would be my recommendation.”

The agreement also comes as Boyce works to address longstanding financial problems. Its fiscal 2024 financial report identified significant accounting deficiencies that prevented auditors from issuing an opinion on the town’s financial statements.

Auditors also raised concerns about the town’s ability to continue operating because of liabilities associated with its municipal police retirement system. Town officials have since reported resolving the retirement dispute through a settlement.

The $4 million agreement follows discussions between Boyce Mayor Kelvin McCoy, regional economic development organization Louisiana Central and Applied Digital about ensuring the community benefits directly from the data center, which is being constructed just outside town.

“This is a tremendous opportunity for the Town of Boyce and the people who call this community home,” McCoy said in a statement.

“From the beginning, I believed that a project of this magnitude should create meaningful opportunities not only for the region, but for the communities closest to it,” he added.

The agreement is separate from a broader financial arrangement under which Applied Digital is expected to make payments to local taxing authorities instead of paying traditional property taxes.

Under preliminary terms approved by the England Economic and Industrial Development District, the company would make payments over a potential 25-year period, beginning at $27.4 million annually and gradually declining to $19.4 million in the final years.

The payment schedule could generate approximately $572 million over 25 years. The terms also call for $18 million annually during the first three years to support regional taxing bodies and community development.

DeWitt said the Rapides Parish Police Jury, Sheriff’s Office and School Board are among the entities expected to benefit from the company’s financial commitments.

“I’ve seen some figures,” DeWitt said. “They’re preliminary numbers, but they’re very promising.”

He described the potential revenue as unprecedented for the area.

“There’s just no other industry we have in our area that has even come close to these kind of numbers,” DeWitt said.

The data center is expected to create 200 direct permanent jobs and more than 1,000 construction jobs at peak construction, according to Louisiana Economic Development. Initial operations are projected to begin in mid-2027.

Construction is already underway. DeWitt said workers have recently erected two walls on the first building, although he estimated the project remains in its early stages.

He also sought to address concerns about whether existing electricity customers would be required to subsidize infrastructure improvements associated with the state’s growing data center industry.

“The normal ratepayer, like myself, electricity ratepayer, are not going to be paying for these infrastructure improvements,” DeWitt said, adding that developers would bear those costs under arrangements with state utility regulators.

Those assurances come as Louisiana regulators face increasing scrutiny over how utilities finance the substantial electricity infrastructure needed to accommodate large data centers.

For Boyce, the immediate question is how the town will use a payment that dwarfs its annual operating budget.

“This $4 million agreement represents an opportunity to make improvements that will benefit our residents, strengthen our infrastructure and help us build a better future for generations to come,” McCoy said.