Microsoft is making an unprecedented investment in the City of La Porte and its schools, said community officials March 3. The company renegotiated an agreement to pay its share of property taxes for its data center project in the city.

Microsoft President and Vice Chair Brad Smith is making good on a promise made in January to not seek property tax abatements or other perks from local governments.

“Microsoft is proud to be part of the La Porte community, and we are glad to continue our work with city leaders to ensure our data center development and operation strengthens, not strains, the community,” said Michael Stockwell, land development at Microsoft, in a press release. “This new agreement is a great opportunity for us to direct funding into an important civic service, the community school corporation, and is in line with our community-first commitments to be good neighbors in the communities where we build, own, and operate our data centers.”

The previous agreement included an exemption on personal property taxes and a potential $100 million payment in lieu of taxes over a 40-year period to the schools and redevelopment commission. The new agreement says Microsoft will pay taxes in full, of which 15% will go to the school corporation for 20 years.

“The new tax agreement is great news for our city and our future,” Mayor Tom Dermody said. “This arrangement provides greater benefits when compared to other structures we’ve seen, with significantly more lucrative revenue streams for both the city and the school corporation. Microsoft has demonstrated a true commitment to our community, and this partnership we have forged will benefit local families and students for generations to come.”

The La Porte Community School Corp. and the city's redevelopment commission also approved the new agreement. A city representative said the new agreement “is significantly more lucrative that what was previously in place.”

La Porte Community School Corp. Superintendent Dr. Sandra Wood said the agreement will be transformational for the district and its students.

“This is a defining moment for our school district,” Wood said. “What the City of La Porte and Microsoft have made possible will give the students of La Porte an unmatched advantage. An opportunity of this magnitude doesn't just open doors for this generation, it builds them for every generation that follows.”

The data center in La Porte was first announced in summer 2024 as a $1 billion 245,000-square-foot facility on 489 acres in the Radius Industrial Park. Then Gov. Eric Holcomb announced the deal would create up to 200 new jobs by the end of 2032.

Typical jobs at a data center include initial construction, data center technicians and critical environment technician.

Microsoft also pledges to pay its share of electricity prices so residential rates don't go up, and to replenish more water than they use at its data centers, according to its website.