TCEDA OKs Incentives for $3.2 Billion Brookwood Data Center

One of the proposed data centers that has consumed Brookwood for months now has a name, a price and an approved public cost.

Applied Digital confirmed Wednesday that a small part of the 1,300 acres they own in Brookwood will be home to the Delta Forge 2 campus, a $3.2 billion AI data center, and the Tuscaloosa County Economic Development Authority officials voted unanimously to approve the incentive package behind it: roughly $314.5 million in tax abatements, alongside a $270 million community benefit agreement.

It is the same project the Tuscaloosa Thread first revealed in August through a state stormwater permit, back when the company would say only that "no decision has yet been made" about the site. On Thursday, the Dallas company made it official in a media alert, naming Brookwood as the home of what it had previously disclosed only as its "Delta Forge 2" campus.

Applied Digital designs and operates large data-center campuses that it leases to other technology companies, and Delta Forge 2 is the fifth in what it calls its AI Factory platform.

"We are a designer, builder, owner, and operator of next-generation data centers. We are effectively a landlord. What we do is we design these facilities, we build them, we operate the electrical, cooling, and security systems and the facility as a whole," said Nick Phillips, the Executive Vice President of External Affairs for Applied Digital. "Then we rent out what's called a data hall, which is just a room, or rooms, inside these buildings, to hyperscalers."

The $3.2 billion figure, the company says, is the combined investment of Applied Digital and its tenant, an unnamed "U.S.-based high investment-grade hyperscaler" that has signed a lease for 210 megawatts of computing capacity at the site.

The identity of that tenant, the company that would actually run the artificial-intelligence computing in Brookwood, has not been disclosed.

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The public cost came into focus at the county meeting. According to a Tuscaloosa County Industrial Development Authority fact sheet, the project would receive about $314.5 million in tax abatements, made up of a 20-year abatement of $140.7 million in ad valorem taxes and $173.8 million in construction-period sales and use taxes. Over 20 years, the fact sheet projects the project would still pay about $170.7 million in taxes that cannot be abated, including roughly $131.5 million in education taxes, which are protected by the state.

"The project will create significant education revenue for our local schools, which is the primary reason our board is considering this," TCEDA Executive Director Justice Smyth said.

Separately, Applied Digital is committing $270 million in community benefit payments to the Tuscaloosa County Economic Development Authority over 20 years. The company says that money will be distributed to the local governments whose taxes are being abated, including the cities of Brookwood, Tuscaloosa and Northport and Tuscaloosa County.

The campus is expected to support more than 100 full-time jobs once operating, with construction employment peaking above 1,000 workers, the company said.

Applied Digital estimates the completed campus at 1.26 million square feet on a roughly 160-acre footprint, part of a nearly 1,300-acre site, and expects it to become the largest taxpayer in Brookwood's history.

Phillips also assured the meeting that residents of Tuscaloosa County will have access to and input on the development.

"We are experts in data centers. And we look to the community — you are the experts in the community," he said. "We look to partner with you and work together. We try very hard to become great members of the communities in which we operate. You will see a lot more from us over the coming days, weeks, and months."

Brookwood Mayor Joe Barger called it the largest industrial operation to come to Tuscaloosa County since Mercedes-Benz U.S. International.

"For our community, this project is about creating opportunities for local families, strengthening our schools and positioning Brookwood for the future," Mayor Joe Barger said in the company's announcement. "We anticipate that Applied Digital will be a good neighbor and a long-term community partner, and expect this $3.2 billion investment to benefit Brookwood residents for generations to come."

Barger told the Thread that the only votes left ahead for this project are with the Tuscaloosa County Commission to approve the tax incentive, and a final vote from the Brookwood City Council, though he said he expects both to pass.

Construction is anticipated to begin in October and finish in 2028.

Delta Forge 2 is the largest and now most concrete of at least three data center projects the Thread has tied to the Brookwood corridor. The others are a tied to the New York firm Youngwoo & Associates, which the city council rezoned this month, and a third site tied to the Dallas firm Provident Data Centers. A city map presented at a recent council meeting showed the three developers holding a cluster of parcels around Brookwood Middle School.

This is a breaking, developing story and will be updated.

For more coverage of this project and other industrial development in West Alabama, stay connected to the Tuscaloosa Thread.