---
title: "Digital Realty offers De Soto $1,000 a household while asking Johnson County to defer the taxes"
description: "Every household in De Soto, Kansas is being offered $1,000 a year for ten years while Digital Realty seeks tax increment financing on the same $7.5 billion project. The $20 million fund is a rounding error against that cost, and a landlord borrowing at 5.125% can afford it; the compute layer, with debt near 16% yields, cannot."
publisher: "The Inference"
section: "Money"
published: 2026-10-18T21:19:47.574Z
modified: 2026-10-18T21:19:47.574Z
canonical: https://theinference.org/article/digital-realty-offers-de-soto-1-000-a-household-while-asking-johnson-county-to-defer-the-taxes
language: en
keywords: "Digital Realty, Data Centers, Kansas, Taxes, Bonds"
---

# Digital Realty offers De Soto $1,000 a household while asking Johnson County to defer the taxes

> Every household in De Soto, Kansas is being offered $1,000 a year for ten years while Digital Realty seeks tax increment financing on the same $7.5 billion project. The $20 million fund is a rounding error against that cost, and a landlord borrowing at 5.125% can afford it; the compute layer, with debt near 16% yields, cannot.

[Digital Realty](https://theinference.org/markets/companies/digital-realty) has put a price on a town's consent. Every household in De Soto, Kansas [is being offered $1,000 a year for ten years](https://theinference.org/article/digital-realty-is-offering-de-soto-households-up-to-1-000-a-year-to-say-yes-to-its-data-center), in utility and property-tax credits, as the data center landlord prepares to build [1]. The same project carries a second ask: [tax increment financing, or TIF, from Johnson County on a $7.5 billion development](https://www.bizjournals.com/kansascity/news/2026/10/12/data-center-community-fund-de-soto-property-tax.html) [2]. Consent has become a budgeted construction cost in the AI buildout, and this month showed who can afford to pay it.

## The town is paid from one pocket and asked to wait from the other

The credits land on exactly the bills that data center critics cite: utilities and property tax. TIF runs the other way, paying for a development out of the growth in the property taxes it generates, so the county waits for new revenue while the project funds itself. The household offer draws on a $20 million community fund, roughly a quarter of one percent of the project's cost, and CEO Andy Power frames it as a responsibility to communities that make the buildout possible [1].

*Chart: **De Soto's entire $20 million fund is less than a week of Digital Realty's capital spending** Column chart of Digital Realty's annual capital expenditures, fiscal 2020 to 2025, between 0.8 and 2.4 billion dollars a year, with a reference line marking the entire 20 million dollar De Soto community fund sitting on the baseline*

*Capital expenditures by fiscal year, US$ billions, as reported in Digital Realty's SEC filings. The line marks the entire $20 million De Soto community fund, about 1.3% of the company's fiscal 2025 capital spending. Source: Digital Realty annual figures, SEC filings. [9]*

## Four hundred signatures against, and a national poll that agrees

Neighbors have done the arithmetic. "It's a bribe, is what it looks like," resident Toni Caldwell told KSHB 41, a Kansas City television station [3]. Another neighbor, Sara VanDeCreek, called the timing purposeful, coming "right now before they ask for tax incentives to help with bonds" [3]. [A petition against the town's two data center proposals](https://www.kshb.com/news/local-news/kansas/johnson-county/de-soto-data-center-plans-to-offer-1-000-to-households-but-neighbors-say-theyre-not-so-sure) has passed 400 signatures [3], and a [CBS News](https://www.cbsnews.com/news/kansas-data-center-1000-dollars-neighbors-opposition/) poll found more Americans oppose a data center in their area than support one [1].

## Indiana shows the other bargain on the table

The same month brought the other end of the experiment. Kokomo, a city in Howard County, Indiana, [announced Digital Realty's plan for what would be the company's first data center in the state](https://www.datacenterdynamics.com/en/news/digital-realty-eyes-gigawatt-scale-data-center-site-outside-indianapolis-indiana/): three buildings totaling about a gigawatt [4]. The city says the campus could be fully built out by 2033, will use closed-loop cooling to cut water use, and will carry no tax abatements [4].

In plain terms, Kansas pairs a cash offer to De Soto's households with a request that Johnson County wait on the project's property-tax growth, while Kokomo expects the company to build paying full taxes. Which of the two costs less per megawatt is what Digital Realty is now in a position to learn.

|  | De Soto, Kansas | Kokomo, Indiana |
| --- | --- | --- |
| Project | $7.5 billion development | Three buildings, about a gigawatt |
| Consent offer | $1,000 a year per household for ten years, from a $20 million community fund | None announced |
| Property taxes | TIF sought; the county waits on the tax growth the project generates | No tax abatements; the company pays full taxes |
| Timeline | TIF hearing on November 19 | Could be fully built out by 2033 |

*The two bargains Digital Realty put on the table this month, as reported by the Kansas City Business Journals, KSHB 41 and DataCenterDynamics.*

## The debt that makes the offer affordable

Digital Realty owns the buildings; [CoreWeave](https://theinference.org/markets/companies/coreweave) and [Nebius](https://theinference.org/markets/companies/nebius) sell the computing that runs in buildings like them. The landlord [priced EUR 1 billion of ten-year notes at a 5.125% coupon](https://www.ad-hoc-news.de/boerse/news/corporate-news/digital-realty-announces-bonds-and-sets-results-date-what-it-means-for-digital-realty-stock/70346052) this month, earmarked for green projects [5], and added CHF 510 million of lower-coupon Swiss notes that first repay its revolving credit line, freeing room for construction [6]. The coupon gap mostly reflects lower Swiss franc interest rates rather than cheaper funding [6].

A day after the Swiss notes closed, the company's joint venture with Mitsubishi [broke ground on a 24-megawatt Osaka facility](https://www.rackline.news/story/1x93ram) that is not scheduled to open until late 2028 [6]. The debt is pre-paying for buildings planned years out, and for the goodwill that lets them get built.

*Chart: **Four tranches in one week: coupons climb from the Swiss market to the euro market** Bar chart of the annual coupon on each of Digital Realty's four October 2026 bond tranches, from 1.68% on 2029 Swiss notes to 5.13% on 2036 euro notes*

*Annual coupon on each tranche Digital Realty sold in the first week of October 2026; the gap against the euro tranche largely reflects lower Swiss interest rates rather than cheaper funding once currency is taken into account. Sources: ad-hoc-news; Rackline. [5][6]*

## Sixteen percent at the compute layer

The compute layer cannot be so polite. [Yields on CoreWeave's 2030 bonds climbed near 16% in the October selloff](https://finance.yahoo.com/markets/stocks/articles/nebius-stock-fell-12-day-173431985.html) [7], and the selling spread to Nebius, which closed down 12% [7]. [BlackRock](https://theinference.org/markets/companies/blackrock) chief Larry Fink [warned that a data center moratorium would put the country in a recession](https://www.cnbc.com/2026/10/14/blackrocks-fink-warns-data-center-moratorium-could-spark-a-recession.html), with the backlash a key issue in the November 3 midterms [8].

## A settlement or an opening bid

Digital Realty is right to pay De Soto directly and right to build; the unresolved question is why the same project also needs Johnson County to wait on its taxes. The offer's terms are still open: the company and the city are working out how the credits reach households, and the announcement does not say when payments start or whether renters are treated like homeowners [1]. Permission is now a budgeted cost of construction; the builders who can afford it keep building through the backlash, and the repriced compute layer cannot.

Two dates will show whether the payment was a settlement or an opening bid: the De Soto city council's TIF hearing on November 19 [3], and Digital Realty's third-quarter results on October 29 [5].

## Takeaway

A landlord borrowing at 5.125% can budget consent; the question, headed into a November 19 TIF hearing, is why a $7.5 billion project also needs Johnson County to wait on its taxes.

## Sources

1. [CBS News, "Data center developer offers residents of Kansas town $1,000 each for 10 years", 14 October 2026](https://www.cbsnews.com/news/kansas-data-center-1000-dollars-neighbors-opposition/)
2. [Kansas City Business Journals, "Digital Realty offers payments to De Soto households as it seeks TIF for $7.5B data center", 12 October 2026](https://www.bizjournals.com/kansascity/news/2026/10/12/data-center-community-fund-de-soto-property-tax.html)
3. [KSHB 41, "De Soto data center plans to offer $1,000 to households, but neighbors say they're not so sure", October 2026](https://www.kshb.com/news/local-news/kansas/johnson-county/de-soto-data-center-plans-to-offer-1-000-to-households-but-neighbors-say-theyre-not-so-sure)
4. [DataCenterDynamics, "Digital Realty eyes gigawatt-scale data center site outside Indianapolis, Indiana", 16 October 2026](https://www.datacenterdynamics.com/en/news/digital-realty-eyes-gigawatt-scale-data-center-site-outside-indianapolis-indiana/)
5. [ad-hoc-news, "Digital Realty announces bonds and sets results date", October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/digital-realty-announces-bonds-and-sets-results-date-what-it-means-for-digital-realty-stock/70346052)
6. [Rackline, "Digital Realty's European bond run pre-funds a build cycle that now reaches Osaka in 2028", 14 October 2026](https://www.rackline.news/story/1x93ram)
7. [Yahoo Finance, "Nebius Stock Fell 12% in a Day as CoreWeave's Debt Scare Spread", 17 October 2026](https://finance.yahoo.com/markets/stocks/articles/nebius-stock-fell-12-day-173431985.html)
8. [CNBC, "BlackRock's Larry Fink warns a data center moratorium could trigger a recession", 14 October 2026](https://www.cnbc.com/2026/10/14/blackrocks-fink-warns-data-center-moratorium-could-spark-a-recession.html)
9. [Digital Realty, annual figures from its SEC filings, retrieved 18 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001297996)


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Digital Realty offers De Soto $1,000 a household while asking Johnson County to defer the taxes — The Inference. Canonical: https://theinference.org/article/digital-realty-offers-de-soto-1-000-a-household-while-asking-johnson-county-to-defer-the-taxes