Kansas City’s Data Center Boom: Another Costly Gamble

Kansas City has offered billions in incentives to attract massive data centers from Meta and Google, hoping to secure long-term economic benefits. But as Thomas Friestad of the Kansas City Business Journal has reported in a two-part series, these projects come with significant costs and uncertainties​​. While city leaders tout them as major wins, questions remain about who truly benefits—and who foots the bill.

Spoiler alert: It’s taxpayers. Taxpayers foot the bill.

The scale of these data centers is staggering. As Friestad reports, the energy demand from these facilities is equivalent to 100 Walmarts or 40 hospitals​. Their massive electricity needs—driven in part by artificial intelligence—have led Evergy, the regional utility provider, to plan two new natural gas plants and expand renewable energy production by 3,000 megawatts over the next decade​.

While Evergy insists that existing customers won’t subsidize these projects, some experts aren’t convinced. The Missouri Office of Public Counsel warns that the increased demand could drive up energy prices across the region​. Even if Evergy builds enough capacity, ratepayers may still bear the costs of maintaining infrastructure that primarily benefits tech giants.

Kansas City approved up to $8.2 billion in tax incentives for Meta alone, a package more than three times the city’s annual budget​. Google has also secured generous tax benefits, though the full scope is still unclear​.

These incentives were pitched as a way to boost local schools and communities. But as Friestad’s reporting shows, and as regular readers of this blog have come to expect, the expected windfalls have been slow to materialize. The Smithville School District, which was promised rising tax revenues, has instead seen a fraction of what was projected. In 2024, Meta paid just $86,839 in property taxes to the district—far short of the more than $1 million in annual payments initially forecast​. Construction delays and city permitting issues have further postponed expected revenues.

The pieces highlight an important debate: Did Kansas City need to offer such massive subsidies at all? Economic development officials argue that data centers wouldn’t come without them, but others suggest that factors like cheap land, energy access, and infrastructure play a much bigger role​.

A broader trend is at play. At least 36 states now offer incentives for data centers, creating a nationwide bidding war​. Critics like Good Jobs First director Greg LeRoy argue that these subsidies often do little to sway a company’s decision, while shifting tax burdens onto residents​.

And while data centers bring major investments, they don’t create many full-time jobs—typically around 100 per facility, despite requiring billions in public support​.

As they have with entertainment districts, hotels, and sports stadia, Kansas City leaders are making a massive bet on data centers, banking on future economic gains. But as the Kansas City Business Journal’s reporting makes clear, the immediate costs are real, and the benefits remain uncertain. Will the promised revenues materialize? Will taxpayers ultimately bear the burden of subsidizing these projects?

The people of Kansas City should demand answers. If policymakers want to keep handing out billions in incentives, they owe the public clear, transparent explanations of when—and if—the promised returns will actually arrive.