A multi-billion-dollar AI data center is coming to Birmingham’s Oxmoor Valley, along with a significant tax incentive package that has raised questions about which city officials are responsible for the deal.
Birmingham Mayor Randall Woodfin says the answer is simple, neither he nor the city is responsible.
The project
Tech company Nebius is moving forward with plans to build an AI data center at the former Regions operations center site on Milan Parkway and Lakeshore Parkway in the Oxmoor Valley community, a site that had sat vacant for more than five years.
According to the Industrial Development Board resolution approving the project, Nebius is projected to invest nearly $35.9 billion at the site over the next 30 years. The project is expected to create 78 jobs with an average salary of more than $90,000.
The tax incentives
On May 29, 2026, the Birmingham Industrial Development Board voted 6-0 at a special meeting to approve the following tax abatement package for Nebius and its wholly owned subsidiary, Alabama ADC Holdings, LLC:
- A 65% abatement on non-education property taxes for up to 30 years
- An 80% abatement on construction-related sales and use taxes for up to 30 years
When education taxes, which are not being abated, are factored in, the effective overall rates drop significantly: the property tax abatement works out to roughly 32% overall, and the sales and use tax abatement to roughly 72% overall.
According to the IDB resolution, the agreement includes no cash and no upfront incentives. All abatements are contingent on the level of investment Nebius actually makes. If the company invests less than projected or hires fewer employees at lower salaries than expected, the incentives are reduced proportionately.
The resolution also states that the agreement includes clawback provisions requiring Nebius to proportionately repay incentives if it fails to meet its projected payroll commitments. If Nebius ceases operations entirely during the abatement period, it is contractually required to restore the property to no worse condition than when it purchased it.
The mayor’s response
When WBRC asked about the incentive package, Woodfin said the city was not involved.
“On the tax incentive, I want to be very clear. The city of Birmingham has not given any tax incentives to Nebius. And the city of Birmingham will not be giving any tax incentives to Nebius,” Woodfin said.
He pointed to the IDB as the responsible party and distanced himself from its decisions.
“There’s various organizations that are able to abate taxes beyond the city of Birmingham. And that’s another organization,” he said. “[that’s] an independent organization that I don’t have a vote on and I have no authority over.”
Who controls the IDB?
The IDB is a seven-member nonprofit board whose members are required to be Birmingham residents. It has statutory authority under Alabama’s Tax Incentive Reform Act of 1992 to abate certain non-educational property taxes and sales and use taxes for qualifying economic development projects.
The board operates independently from the city of Birmingham, but its members are appointed by the Birmingham City Council to staggered six-year terms.
At the time this article was written, there were 3 vacancies on the board.
What the IDB says
IDB Chairman David Perry said the board voted unanimously in favor of the incentive package. Perry’s statement projects the abatement package will generate more than $2.6 billion in new tax revenues for public schools and communities over the 30-year abatement period, broken down as follows:
- Approximately $1.6 billion in new property tax revenues
- Approximately $1 billion in new sales and use tax revenues
- Approximately $1.3 billion in new tax revenues for the City of Birmingham, including approximately $836 million for Birmingham City Schools
- Approximately $835 million in new tax revenues for Jefferson County, including approximately $600 million for the Jefferson County School System
- More than $400 million in new tax revenues for the State of Alabama
What Nebius says
Nebius spokesman John Sutter confirmed that the incentive package was a deciding factor in the company’s decision to invest in Birmingham.
“Economic incentives were a key factor in our decision to invest in Birmingham and, as a result of the Industrial Development Board’s review and decision, our multi-billion investment is projected to generate $87 million annually in tax revenue for the state, city, county and schools,” Sutter said. “As construction advances, we’re focused on building responsibly, generating benefits for our community, and earning trust through our actions.”
Community concerns — and approvals
Some neighbors in the Oxmoor Valley have raised concerns and filed a lawsuit in recent weeks over noise and environmental impacts from the project.
A sound study commissioned by Nebius projects that the data center will not increase average noise levels above existing ambient noise levels. No adverse impacts to local air or water quality are expected.
Nebius says the facility will use a closed-loop cooling system projected to consume less water than the previous occupant of the site and will place no greater burden on the sewer system. Alabama Power has confirmed its grid has sufficient capacity to service the project and that residential electricity rates will not increase as a result.
Nebius will be responsible for the full cost of utility improvements necessary to service the site.
The city of Birmingham determined that all zoning and permitting requirements were met. Nebius’s site development plan was approved unanimously by the Oxmoor Steering Committee.
Questions remain about the accountability structure surrounding the deal, specifically the relationship between the Birmingham City Council and the IDB it appoints.
