Jackson Jambalaya

One thing I would like to point out is we requested multiple times information from Amazon Data Services, James's department, on costs that we felt were relevant to the projects, because as stated earlier, they were relying on the replacement costs at the time they reported or filed the appeal and of a national cost service. However, actual project-specific construction costs, I feel, is highly relevant to that determination. And that information is available for the projects themselves. They were not willing to share any of that with us, the internal documents. To me, there's no better way to determine replacement cost than the actual cost to replace that facility, which they have. 

Mr. Polianski replied:

That is an internal policy that we don't disclose actual costs for multiple reasons, but primarily that it would if the costs are available in the public setting, that may put Amazon at a competitive disadvantage against our competitors.  

In the end, the Board unanimously voted to accept Cannady's assessment. 

Kingfish note: The Board took the trouble to employ a court reporter for the discussion. If they are $223 million apart in assessments, expect this one to go to court.  

Posted below are the transcript and the AWS "appraisal"

Transcript 

[00:00] Norm Cannady: ...stated, at the megasite, and those are for Amazon Data Services. Prior to the meeting starting, I placed before each of you a packet with the five appeal forms that were submitted. And there within that packet, there's also a cost report that's based on replacement cost that was prepared by an employee from Amazon Data Services. I'm not sure that that employee is associated with Amazon anymore, the original report. Okay, so their opinion of value stated on that document for each building was $68,881,306. James Polianski is here representing Amazon today, and he completed that appeal form and submitted that opinion of value at the time the original appeal was filed.

Over the weekend, I received a revised report from Mr. Polianski, and along with that, a few documents where Amazon had purchased a few data centers. And I'll let him discuss the revisions of that, but the revised opinion of value he submitted is $69,983,599—595, I'm sorry, or $324 per square foot for each facility. And each building's about approximately 215,000 square feet. So at this time, I'll ask Mr. Polianski—

[01:52] Gerald Steen: Hold on, before before you do, let's hold off on that. Hold off on him before he come up. I just want to make sure I understand that they have each building assessed at 68 million 881. And your record, value, shows at 292 million?

[02:10] Norm Cannady: That's correct.

[02:11] Gerald Steen: Is that what we're looking at?

[02:12] Norm Cannady: That's correct.

[02:13] Gerald Steen: And this is on each of the five buildings?

[02:16] Norm Cannady: Each building.

[02:17] Gerald Steen: Individually. And did I hear you correctly is... well, we'll just wait. Yeah. Let whoever's going to speak for AWS to come up at this point and give your name, address, and tell the board what you would like for us to hear.

[02:40] James Polianski: Good morning to the honorable Board. Thank you for allowing us to present today. I also want to thank Mr. Norman Cannady for the number of years of good working relationship. And there is a variance in opinion of value—

[02:58] Gerald Steen: State your state your name.

[02:59] James Polianski: Oh, absolutely. First name James, last name Polianski. 1929 127th Place Southeast, Everett, Washington. I work out of the Seattle office for AWS.

[03:12] Gerald Steen: Okay. Thank you.

[03:14] James Polianski: If I may approach and provide you with several printed out packets?

[03:20] Gerald Steen: Please do. Our administrator is usually here to be able to hand those out, but I guess...

[03:31] Gerald Steen: Make sure the court reporter gets one as well.

(James Polianski distributes packets to the Board of Supervisors, staff, and court reporter)

[03:53] James Polianski: Very good. This is an opinion of value that was derived by an industry standard, Marshall & Swift Valuation Service. I'll first describe the the properties. They are 2025 built, concrete tilt-up. Each building is approximately 215,000 square feet for a total of just over or just under 1.1 million square feet for the five buildings.

On the inside of the packet, on page 2, there is a summary of the four land parcels, which are not part of the appeal, and only the improvements are under appeal and review. And as as you can see, there is a substantial difference between assessed value and our estimated market value or true value of the properties.

On page 3, this is a location map, but I'm pretty certain each one of you knows where the site is located.

On page 4, mid-construction is an aerial map of the five buildings, and on page 5 is a finished representation of one of the buildings, but all of the buildings are cookie-cutter identical to each other.

On page 6, this is a summary of cost approach as provided again by an industry-standard manual. This is what what appraisers use to estimate value for data centers. The estimated base cost of is $234 per square foot. And then we provide some adjustments for height, perimeter, current and local multipliers, and ultimately end up with an adjusted cost basis of $291 a square foot times one of the buildings, 215,000 and and that indicates a value of 62, almost $63 million for the building. In addition to that, we add some adjustments, one of which is sprinklers and and site site costs, which is parking and curbs and gutters, etc. Ultimately, the improvement value indicates 69 or just under 70 million or approximately $324 per square foot times five buildings. And that is our estimate of value for the five buildings.

The rest of the packet is supporting documentation, and really the primary and and main support is on page 8, which on the top portion of the of the page illustrates kind of a chart for data centers. And the subject property is a Class C of good quality. And if you go all the way to the right, the rightmost column, that indicates a dollar per square foot of $234—$234 per square foot. And that is frankly the most the most or the highest cost basis for an air-cooled facility, which is what the subject property is. There is a number of facilities that are Class A and B that are more expensive to build, which are water-chilled, and that is not the case for the subject property. The rest of the packet is fairly straightforward, providing further support.

And lastly, on pages 18, 19, and 20, in order to test the reasonableness of the cost approach, we looked at what other similar properties tend to sell for in the market. The market is the market has a very wide range of sales anywhere from, and this is this is based off of CoStar, which tracks data center sales, and it varies from 8 $18 a square foot to over $3,000 a square foot. And so the range for data centers is wide. The biggest challenge is when data centers do sell, it is not published anywhere what is included in that sale. Often times there are power contracts included, often times the computer equipment is included, and so on. And to my understanding, that's what reflects the higher end of the sales.

Now, the three sales that are provided are all sales that were Amazon-acquired properties. They were acquired from a leased relationship, and so Amazon chose to buy out the lease. And so the first property in Pennsylvania was purchased for $69 million. It's a 300,000 square foot facility built in 2023, so very similar to the subject built age. And it sold for $230 per square foot.

The next facility is a collection of three buildings for $135 million, or $303 a square foot for a collective of 446 thousand square feet.

And then lastly, on on page 20, and this is a little bit of a dated sale, we bought out a lease at the end of 2022 for $20.9 million, or just under $82 a square foot for a 255,000 square foot facility.

Having said that, the most recent sale is as of June 2024 for $303 a square foot, and that falls very close to what Marshall indicates the cost would be for our facilities. And so that passes the reasonableness of the cost approach.

In summary, that's where we would request the board to adjust the assessed value for a collective of $349.9 million for the five buildings.

[12:12] Gerald Steen: Questions for James? James, I know we heard the tax assessor a few minutes ago saying there was a revised email that you sent him over the weekend from 68 million to 69 million. That still puts us far, far apart from 292 million.

[12:34] James Polianski: There's a little bit of a range there, yes.

[12:36] Gerald Steen: Who did who did that assessment?

[12:39] James Polianski: The original?

[12:41] Gerald Steen: Yes.

[12:42] James Polianski: It was done by an Amazon employee that basically moved on.

[12:51] Gerald Steen: What was that original assessment?

[12:53] James Polianski: Well, it wasn't an assessment, it was an estimated value, and really the only two differences that were adjusted, that I made the adjustment, was for local and current multipliers, and for I deducted the land value, because the original assessment included land value, and now that we've reconciled land value, this is only for the improvements. And so this latest packet is the one that I've completed.

[13:31] Gerald Steen: Okay. And I think I heard the assessor say that, or maybe you saying, that it was the fire sprinkler system as well that was left out of the first assessment? Did I hear that correct?

[13:44] James Polianski: No, the first included fire fire sprinklers.

[13:51] Gerald Steen: Alright, we're like I said, from 69 million to 292, that's a long way off.

[13:57] James Polianski: There is a long way between assessments.

[14:05] Gerald Steen: Any other questions from the board? Thank you, James. We may ask you to come back up and a few more questions here shortly.

[14:15] James Polianski: Yes, sir. Thank you for your time.

[14:16] Norm Cannady: Mr. President, can I ask one question?

[14:18] Gerald Steen: Yes, sir. Come up.

[14:20] Norm Cannady: So you're stating that the revised cost approach, replacement cost that was submitted over the weekend, that is your opinion of value?

[14:29] James Polianski: Yes, sir.

[14:31] Norm Cannady: All right. Thank you.

[14:34] Gerald Steen: And you did that opinion yourself?

[14:36] James Polianski: I did, yes.

[14:38] Gerald Steen: Yeah.

[14:44] Gerald Steen: Other questions for James?

[14:47] James Polianski: Thank you for your time.

[14:48] Gerald Steen: All right, thank you, James. Anyone else would like to speak in favor or against or just in general? Okay. Mr. Assess- Tax Assessor?

[15:03] Norm Cannady: Unless you have some questions for me, I'm ready to I'll touch on a few things and close this out.

[15:11] Gerald Steen: Do you mind touching on how you got to your assessment?

[15:14] Norm Cannady: Sure.

[15:25] Norm Cannady: So, as I stated earlier, our true value for the 2026 tax roll for real property is $292,123,055. That's based on a building area for each of the five buildings at 214,534 square feet. And that equates to a real property value per square foot of $1,362. The real property value per megawatt, I believe each of these facilities are their critical IT load is around 65 megawatts, is 4.49 million per megawatt. And according to sources that we had to turn to when comparing these numbers to this class of facility, it falls within the ranges that we relied on.

The combined total of real and personal is 1 point—$1,152,123,055. And the combined calculation provides a directional cross-check against the information we had to consider, and the resulting the results fall between the published benchmarks.

[16:55] Gerald Steen: Right.

[16:58] Norm Cannady: Any more questions?

[17:01] Gerald Steen: Any questions for the tax assessor?

[17:10] Norm Cannady: Sir?

[17:11] Karl Banks: Feel if I ask one I wouldn't understand the answer. (Laughter)

[17:17] Norm Cannady: I would like to say this, and then I'll ask the board to make a decision on the assessment for 2026. But I feel that our assessment reflects the true value of the completed real property improvements necessary to support these operations. They're highly specialized data centers. And this is not simply a conventional building or shell. The real property includes specialized building systems that are integral to the facility. And their construction involves significant electrical, specialized structural requirements, mechanical cooling, redundancy, and supporting infrastructure.

One thing I would like to point out is we requested multiple times information from Amazon Data Services, James's department, on costs that we felt were relevant to the projects, because as stated earlier, they were relying on the replacement costs at the time they reported or filed the appeal and of a national cost service. However, actual project-specific construction costs, I feel, is highly relevant to that determination. And that information is available for the projects themselves. They were not willing to share any of that with us, the internal documents. To me, there's no better way to determine replacement cost than the actual cost to replace that facility, which they have. So, I'll respectfully request that the board uphold the assessment established by the Tax Assessor's Office for the 2026 tax roll at this time.

[19:03] Gerald Steen: Okay. Well, before that, I would ask James... James, do you have a second to come back up, please?

(James Polianski returns to the podium)

[19:14] Gerald Steen: I would ask, I just heard our tax assessor saying that AWS was not willing to turn over some information, or to share some information with the tax assessor to come up with these numbers. Why would that not be, or is that the case?

[19:33] James Polianski: That is an internal policy that we don't disclose actual costs for multiple reasons, but primarily that it would if the costs are available in the public setting, that may put Amazon at a competitive disadvantage against our competitors.

[19:57] Gerald Steen: All right. Would you would you start over and explain that to me once more, because I kind of heard some stuttering going on in that answer. So if you would, just take your time and explain to me why you would not—would not share that information with the tax assessor.

[20:13] James Polianski: It's an internal policy.

[20:15] Gerald Steen: Is it It's your internal policy not to share the original numbers with with the local government?

[20:24] James Polianski: Yes, sir.

[20:25] Gerald Steen: To be able to get a true cost or value of the building? Am I hearing you correctly there?

[20:31] James Polianski: The the true cost... the the true market value is based on market forces, not on cost. And I think the assessor would agree to to that as well.

[20:44] Gerald Steen: Okay. And I guess I'm just getting back that y'all are not willing to share that information. Because that way, this discrepancy, if you if you did so, I don't think this discrepancy, the number from 69 million to 292 million, would be that far apart. I think it would come very close for whatever that number may be, being accurate. Would you not agree with that? Or would you agree with that?

[21:14] James Polianski: The—

[21:17] Gerald Steen: Yeah, let me ask—

[21:18] James Polianski: Fair market—

[21:19] Gerald Steen: Let me ask the question again. If you would share the information with our tax assessor that y'all have, then the number from 69 million to 292 million would come a lot closer together. Would you not agree with that?

[21:34] James Polianski: Yes, we we feel that the market value would come closer to 69 million.

[21:42] Gerald Steen: No, my question is, if you share the information with the tax assessor, these numbers would come closer, meeting somewhere—I'm not saying in the middle, but somewhere else. If you would share that information with the tax assessor.

[21:56] James Polianski: It it would certainly come down by a significant amount, yes.

[22:01] Gerald Steen: And the 69 would go up tremendously.

[22:06] James Polianski: We would have to review the actual costs.

[22:14] Gerald Steen: All right. And that's fine. You're saying the 69 wouldn't go up. Why don't you just share the information with the tax assessor, then? If you're so firm on your numbers, just share the information with the tax assessors, and then everybody would know.

[22:32] James Polianski: Again, it's an internal policy that that we follow.

[22:36] Gerald Steen: Okay. Other questions from the board?

[22:40] Gerald Steen: Thank you, James.

[22:41] James Polianski: Thank you.

[22:42] Gerald Steen: Mr. Cannady, anything else you would like to say before we make a motion?

[22:48] Norm Cannady: Couple of things. One thing I would like to point out, if if you look take a look at the formal appeal form that was filed, Mississippi Code 27-1-23 grants the Tax Assessor's Office the authority to inspect and demand data. And that information has been requested and not submitted.

Furthermore, based on Mr. Polianski's comments about internal policy, we would be willing to sign an agreement not to disclose that information to anyone if they would turn it over to us. But it would need to include all of the real property improvements and components that that we feel are associated with the real property valuation.

[23:39] Gerald Steen: James, is that something that would entertain your company?

[23:44] James Polianski: We we would have to confirm with internal counsel. I I think the protective order would alleviate a lot of the challenges.

[23:56] Gerald Steen: Yeah. Okay.

[23:57] Norm Cannady: That's all I have.

[23:58] Gerald Steen: All right, thank you. Ready for a motion?

[24:02] Gerald Steen: All right, motion to declare the 2026 real and personal property assessment rolls equalized according to law as well as knowledge and confirm the amended homestead and homestead—

[24:13] Norm Cannady: We need a vote, a motion on which true value you're going to adopt for the...

[24:19] Gerald Steen: That's AWS panels.

[24:21] Norm Cannady: Yes.

[24:22] Gerald Steen: All right, do I have a motion from the board on which true value that we're going to adopt for... You want to read those numbers out?

[24:28] Norm Cannady: Yes. See if I can locate there...

[24:36] Karl Banks: Number six.

[24:37] Norm Cannady: Our value is $292,123,055.

[24:43] Karl Banks: That's a big number.

[24:44] Gerald Steen: All right, do we have a motion?

[24:45] Karl Banks: I'd like to make a motion that we adopt the 292,123,000.

[24:53] Gerald Steen: Okay, we got a motion from Supervisor Banks. Do we have a second?

[24:55] Board Member: I'll second it.

[24:57] Gerald Steen: Further discussion? And this is for each building. Motion is for each building.

[25:01] Karl Banks: Each building. That's the numbers I read in.

[25:03] Gerald Steen: That's correct. Any other discussion? If not, all in favor say aye.

[25:08] Board Members: Aye.

[25:09] Gerald Steen: All opposed? Okay.

[25:12] Karl Banks: It's a lot of sitting and listening up here.

[25:14] Gerald Steen: Well, I was going to make a motion within the public hearing, but we can we can go outside. It doesn't really matter. All right, have a motion... I'm going to make the motion inside the public hearing.

All right, the motion is to declare the 2026 real and personal property assessment rolls equalized according to the law as well as knowledge and confirm the amended homestead and homestead deletions and reflect the same on the preliminary 2026 real and personal property tax roll. Respectfully accept, approve...