A different way to get a data center approved
Applied Digital, a Dallas-based developer, won county approval for a 3.2 billion dollar AI data center campus near Brookwood, Alabama, called Delta Forge 2 or internally Project Highlands. The site covers 1,300 acres, will reach 1.2 million square feet at full build-out, and is designed for 210 megawatts of capacity, with operations targeted for 2028. Construction will support up to 1,000 jobs and around 100 permanent roles once the facility is running, in a county that has spent months debating whether large-scale data center development belongs in its backyard at all.
What sets this apart from most of the data center siting fights making headlines this year is the deal structure Applied Digital negotiated to get there. Rather than fighting county objections through a straight tax abatement request, the company attached a 270 million dollar community benefits payment, 20 annual installments of 13.5 million dollars, distributed across Brookwood, Tuscaloosa, Northport, the county, a road improvement commission, and the local healthcare authority. It is, by the company's account, the first agreement of its kind in Alabama.
The math behind the approval
The Tuscaloosa County Economic Development Authority approved a non-educational tax abatement running 20 years, ten years shorter than the 30 year maximum the state allows, alongside projections of 131.5 million dollars in new educational tax revenue, made up of 101.6 million in property taxes and 29.9 million in sales and use taxes. Total abated taxes over the term run as high as 314.5 million dollars, and the authority was explicit that no public funds flow to the developer.
That structure is the template other jurisdictions fighting data center approvals should be looking at. Instead of asking residents to accept traffic, noise, and water draw in exchange for vague promises of jobs and tax base, Applied Digital priced the tradeoff in cash, on a schedule, paid to specific local institutions including the school system and the hospital authority. Whether that is generous or merely well negotiated, it is a materially different offer than the abatement-only deals that have triggered building freezes in Virginia and Texas this year.
The customer behind the deal is not named
Applied Digital describes the eventual tenant only as an investment grade hyperscaler, without naming which one. That is common practice in this market, where anchor tenants prefer anonymity until leases are signed and disclosed through their own investor filings, but it matters for anyone trying to assess the facility's durability. The county's tax revenue projections, the community benefits payments, and the construction jobs all depend on that unnamed hyperscaler actually occupying the space at the capacity assumed in the filing.
Applied Digital's CEO framed Delta Forge 2 as proof of a repeatable model for building AI infrastructure at scale, and the company has multiple similar projects underway elsewhere. That repeatability is the real pitch to investors and to counties: Applied Digital wants to be seen as a developer that has found a formula it can run again at the next site, and the next one after that, turning a single well-negotiated deal into a standing competitive advantage. Judging whether that formula holds requires watching whether the next several county approvals look like this one or whether Brookwood was a one-off shaped by local politics.
A cash offer is not the same as a durable relationship
Twenty years is long enough for county commissions, mayors, and local sentiment to turn over several times, and community benefits agreements are only as durable as the political consensus that approved them. Alabama has no statewide framework requiring these payments, which means Brookwood's deal exists because Applied Digital chose to offer it and the county chose to accept it, not because state law mandates it. A future project without a similarly motivated developer, or a future county board less inclined to negotiate, could produce a very different outcome even a few counties away.
That fragility cuts both ways. It is exactly why a developer willing to write the check gets an edge over one that is not: in a market where a growing number of counties have watched neighboring jurisdictions extract nothing beyond a standard abatement, a concrete cash commitment is now a differentiator in the site selection process itself, worth real money in faster approvals and less litigation risk, and increasingly something county boards ask for by name before a project reaches a vote.
Why this matters even if you never build a data center
Local opposition has become one of the largest bottlenecks in AI infrastructure buildout, with billions of dollars in projects delayed or blocked by community pushback and permit freezes in multiple states this year. A developer that can consistently convert opposition into approval by pricing community impact directly, rather than relying on abatement terms alone, has found a genuine competitive advantage in a market where speed to power and speed to permit increasingly decide who wins hyperscaler contracts.
For enterprise buyers, the relevant question is not whether you approve of the deal but what it implies about lease reliability. A facility built on a negotiated community relationship, with payments running two decades, has a different risk profile than one built on a bare tax abatement that a future county commission could revisit. If you are leasing capacity in facilities like this one, ask your provider how the community agreement is structured relative to your own contract term, because the two are more connected than most colocation agreements acknowledge.
