Microsoft Gives Up Its Douglasville, GA Tax Incentives to Pay Its Own Way. DC Blox Gets $53 Million the Same Night.

At its regular meeting of 8 September 2026 the Douglasville City Council ended the tax incentive plan for Microsoft Corporation's data center and, on the same consent agenda, approved more than $53 million in property tax incentives for the second phase of DC Blox's campus in the city. Both were items on a nine-item consent agenda, which the agenda calls for the Council to adopt in one motion.

The Microsoft item is #26-301, a resolution approving a Cancellation of Bond and Termination of Bond Documents with Microsoft Corporation and the Development Authority of the City of Douglasville, and authorizing the Mayor to execute the agreement and terminate the Tax Incentives Agreement dated 21 December 2020. Microsoft has exercised its option to purchase the data center the Authority financed for it with a taxable revenue bond authorized at up to $400,000,000. City Manager Marcia Frazier told the Douglas County Sentinel that the company "indicated that they are no longer interested in tax exemption," and that Microsoft was moving from leasing the facility to owning it.

The item immediately below it, #26-303, brought DC Blox's affiliate into the same tax plan Microsoft was leaving.

What Microsoft Gave Up

The agenda packet publishes the terms in full. Schedule 1 to the 2020 Tax Incentives Agreement, headed "Qualified Schedule for MICROSOFT CORPORATION Calculating PILOTs," sets the company's payments in lieu of taxes against a $400 million value.

The payment holds flat at $500,000 for five years and then steps up fifteen percent a year. Year fifteen is the last year of the schedule. The exhibit is a poor scan and the cents in year nine are not legible; the figure shown is what the fifteen percent step produces, and it reconciles with the years on either side of it.

Those are the payments Microsoft made under the tax incentive. They are not a measure of what it saved. The packet contains no assessed valuation and no estimate of lost revenue, so the value of the incentive to Microsoft cannot be worked out from it. For the company's two Fulton County sites, both granted through the Development Authority of Fulton County, the Atlanta Journal-Constitution put the estimated savings at $14.6 million over ten years at Palmetto and $17.1 million at East Point, and reported that the estimated savings for the Douglas County project was not made public. The Fulton authority's published agenda records for the Microsoft projects give the authorised bond amount but no year-by-year payment schedule. Douglasville publishes the schedule itself.

The terms also differ in length. The Fulton incentives run ten years. Douglasville's schedule runs to a year fifteen, and the bond behind it matures on 1 December 2038.

Why Microsoft Gave Them Up

On 13 January 2026 Microsoft announced a set of commitments it calls Community-First AI Infrastructure. On local taxes the pledge was specific: the company said it would not ask local municipalities to reduce their property tax rates when it buys land or proposes a data center, and would instead pay its full and fair share of local property taxes. Company president Brad Smith, quoted by GeekWire, said the industry practice of buying land under nondisclosure agreements, which left communities in the dark about who was arriving, was "clearly not the path that's going to take us forward."

That pledge was prospective and said nothing about agreements already in place. It became retroactive over the following months. In August the Atlanta Journal-Constitution and Bisnow reported that Microsoft was working to reverse tax incentive agreements at three Metro Atlanta sites — East Point, Palmetto and Douglasville — each partway through its schedule. On 5 August 2026 Fulton County commissioners voted unanimously for a non-binding resolution that urges the Development Authority of Fulton County to decline data center incentives but cannot compel it. Commissioner Bridget Thorne said Fulton taxpayers should not be subsidizing some of the wealthiest companies in the world.

The same week, commissioners in Medina County, Texas voted unanimously to end a 2021 economic development agreement that had cut Microsoft's property tax by eighty percent. County Judge Keith Lutz described the company's position as terminating such agreements "like it never happened."

Nothing in Georgia law or local policy required any of this. The 2026 General Assembly's data center bills all targeted the state sales and use tax exemption on equipment, which survived; none of them touched the local property tax incentives or the development authority bond-lease structures at issue here. Douglas County — not the City — adopted a data center moratorium in March 2025 and extended it for ninety days that June, and it was a land-use measure covering rezonings, variances and special use permits rather than tax agreements. The City of Douglasville has no such moratorium of its own, and the Fulton resolution reaches only new incentives. The Douglasville packet makes no reference to the company's national commitments; the City's file treats the transaction as the exercise of a purchase option contained in a 2020 lease.

The 2020 Structure

The bond-lease is the standard route to a data center property tax incentive in Georgia. A development authority takes title, issues a taxable industrial development revenue bond, leases the project back to the operator, and the operator pays negotiated payments in lieu of taxes because a tax-exempt public body is the owner of record.

On 1 December 2020 the Authority adopted a bond resolution authorizing the issuance of its Development Authority of the City of Douglasville Taxable Industrial Development Revenue Bond (Microsoft Corporation Project), Series 2020, in an aggregate principal amount not to exceed $400,000,000, to finance Microsoft's data center project in the City of Douglasville, Douglas County, Georgia. That figure is the authorized ceiling now being cancelled. It is neither a new financing nor a statement of what Microsoft spent.

The documents establishing the structure are dated as of 21 December 2020: a Lease Agreement between the Authority and Microsoft with a related Short-Form Lease Agreement recorded in the Douglas County real estate records, a Bond Purchase Agreement between the Authority and Microsoft, and the Tax Incentives Agreement among the Authority, the City and Microsoft, acknowledged by the Douglas County Board of Assessors and the Tax Commissioner of Douglas County. Microsoft is identified as a Washington corporation.

The land is described in Exhibit A to the cancellation agreement as two tracts in Land Lots 165, 166 and 173 of the 1st District, 5th Section of Douglas County: Tract A of 92.831 acres and Tract B of 66.610 acres on the Final Plat of Riverside West, Phase II, certified by Pablo M. Garcia of Urban Engineers, Inc., dated 10 March 2021 and recorded in Plat Book 41, pages 197 and 198. The cancellation documents give the tax parcels as 01660150009 and 1660150010.

The Tax Incentives Agreement describes the site as land recently acquired by the company. A letter of 26 February 2021 from Microsoft's Redmond headquarters, filed with a special land use permit release request, states that Microsoft had acquired certain property from Rooker Riverside, LLC located within the Riverside West Industrial Park.

In December 2023 Microsoft applied for a parking variance, PCCV23-0011, on approximately 160 acres at 1601 North River Road in Land Lot 166, District 1, Section 5, parcel 01660150010. The owner of record on that application was the Development Authority of the City of Douglasville. The Council adopted the variance at its regular meeting of 8 January 2024. Under a bond-lease the operator applies for its own zoning relief on land the public authority holds.

What the Tax Incentive Was Built On

Douglasville has been adjusting the terms of its ad valorem incentives since 2008. Resolution R-08-030, adopted 22 January 2008, addressed the use of time-limited, performance-based property tax incentives. R-08-277, in July 2008, reactivated the Development Authority to attract new jobs and investment. RES-2010-43 and RES-2013-57 followed. By 2020 the City and the Authority had noted "a number of unintended consequences from and missed opportunities caused by the 2013 Tax Plan," and on 16 November 2020 the City adopted RES-2020-46, approving a new 2020 Tax Plan. The Authority then drafted an amended plan, and on 7 December 2020 the City adopted RES-2020-51, approving the Revised 2020 Tax Plan.

RES-2020-52 was adopted the same night. Its recitals record that Microsoft had already been approved for participation in the original 2020 Tax Plan and that the Authority recommended the company receive the benefits of the Revised 2020 Tax Plan instead. The resolution authorized Microsoft's participation and the execution of the Tax Incentives Agreement, effective 21 December 2020.

The plan measures incentives on capital investment, the creation and retention of job opportunities for City residents, and the average hourly wages for those jobs. A participating business files an annual company report that includes a calculation of any Performance Shortfall and pays the amount due with the report, and compliance with the investment, employment and average wage goals is to be assessed and reported to the Mayor and Council. Qualifying under the plan was a condition of eligibility for the bond.

Ending the agreement closes the annual reporting duty and the shortfall exposure along with the tax incentive. Nothing in the record before the Council discloses whether a shortfall was ever assessed or paid.

Microsoft Held Its Own Bond

The cancellation agreement states that Microsoft owns the only Outstanding Bond, which matures on 1 December 2038, and that Microsoft represents to the Authority that all payments on the Outstanding Bond have been made or have constructively been made, and that Microsoft as holder of the Outstanding Bond acknowledges full payment. The Bond Purchase Agreement was between the Authority and Microsoft directly.

The operator is the bondholder. There is no third-party creditor to satisfy, which is why a bond with twelve years left to run can be cancelled inside a single meeting cycle, and why a corporate decision made in Redmond could be executed here without a negotiation. A developer reading the $400 million should read it as a ceiling on a tax mechanism rather than as capital raised in a market.

What the Cancellation Agreement Does

The agreement runs to seven pages and does eight things.

It terminates the Bond Documents, subject to an express carve-out: termination does not end rights that by their terms survive, including the Unassigned Rights of the Issuer as defined in the Lease and any other rights to indemnification in favor of the Issuer. The Clerk of the Superior Court of Douglas County is authorized and directed to mark the Security Document of record released, paid, cancelled and satisfied in its entirety.

It records the Authority's waiver of the notice period requirements imposed on Microsoft in the Bond Documents relating to prepayment of the Outstanding Bond, the purchase option and the option to terminate the lease term. The waiver is what lets the parties close on their own schedule rather than the one the 2020 documents set.

It deems the Outstanding Bond redeemed, cancelled and surrendered as of the date of the agreement, and records that Microsoft has exercised its purchase option and that the Project is being conveyed to Microsoft by the Authority effective on the same date.

It requires the Authority to execute and deliver a Quitclaim Deed and Bill of Sale, the Issuer Deed, releasing any and all interest the Authority has in the Bond, the Bond Documents and the Project.

It authorizes UCC-3 termination statements against both financing statements, and directs that the agreement, the Issuer Deed and the termination of the fixture filing be filed of record with the Clerk of Superior Court of Douglas County, with the UCC-1 termination filed for central indexing with the Georgia Superior Court Clerks' Cooperative Authority.

It puts the cost on Microsoft. Under the section headed "Company to pay Costs of Documentation," the company shall promptly pay, following receipt of an invoice, the reasonable fees and out-of-pocket expenses of the Issuer, the Issuer's counsel and the company's bond counsel relating to the transaction, including fees for preparing the agreement, the Quitclaim Deed of Release, the Quitclaim Deed and Bill of Sale and any related resolutions and documents.

Within the four corners of the agreement, no termination fee, recapture amount or exit payment to the City or the Authority appears beyond those transaction costs, and nothing requires Microsoft to repay tax incentives it has already received. The Issuer's Unassigned Rights are preserved, and those rights are defined in the Lease, which is not in the record before the Council.

What Happens to the Tax Treatment

The 2020 Tax Incentives Agreement addresses this directly. Section 3, headed "PILOT Payments," recites that the Authority is not subject to ad valorem property taxation on its interest in the Project and that the company's interest under the lease is a mere usufruct and not a taxable estate. Section 4, headed "Reversion to Normal Taxability," provides that if the lease is terminated or expires, the Project will be taxable according to normal ad valorem property taxation rules applicable to privately-owned property beginning with 1 January of the calendar year following the calendar year in which the lease is terminated or expires.

The trigger is the lease, not the bond and not the tax incentives agreement, and the Microsoft version carries no other condition. That is worth noting against the later agreements built on the same template, including the DC Blox ones, which add a second trigger so that normal taxation also resumes for any calendar year after year ten. Microsoft's 2020 agreement has no such cut-off.

The change is scheduled rather than immediate. If the closing occurs in 2026, the first full-assessment year is 2027. Its size is not stated anywhere in the packet.

The 2021 Amendment

The structure was expanded once. RES-2021-82, adopted 15 November 2021, approved a First Amendment to the Tax Incentives Agreement reflecting a Land Addition: land Microsoft requested be added to the Project, adjacent to and contiguous with the original leased land. The Authority found that the addition would further promote trade, commerce, industry and employment opportunities and increase employment in the City, and recommended City approval.

The cancellation agreement dates the corresponding amendments as of 28 December 2021 — a First Amendment to Lease Agreement, a First Amended Short-Form Lease Agreement recorded at Deed Book 4083 page 74, and the First Amendment to Tax Incentives Agreement. The copy of the First Amendment to Tax Incentives Agreement attached to RES-2021-82 is dated "as of November ___, 2021," with the day left blank.

The sequence is the precedent worth noting. The tax incentive was granted in December 2020 and the footprint enlarged twelve months later by amendment rather than by a second bond, with the Board of Assessors and the Tax Commissioner acknowledging the amendment as they had the original.

The Recorded Paper That Has to Be Cleared

The cancellation agreement cross-references every instrument that has to come off the Douglas County records:

• Short Form Lease Agreement, Deed Book 3985, page 743
• First Amended Short Form Lease Agreement, Deed Book 4083, page 74
• Deed to Secure Debt, Assignment of Rents and Leases and Security Agreement, Deed Book 3960, page 160, re-recorded at Deed Book 3985, page 751
• First Amended Deed to Secure Debt, Assignment of Rents and Leases and Security Agreement, Deed Book 4083, page 54
• Fixture Filing, Deed Book 3903, page 840, amended at Deed Book 4090, page 258
• UCC-1 financing statement No. 048-2022-000124, centrally indexed with the Georgia Superior Court Clerks' Cooperative Authority

The recorded agreement is to be returned to Kevin C. Watters of The Watters Law Firm, LLC, Southlake, Texas. The signature blocks are held for Scott Guthrie, Executive Vice President, for Microsoft; Leslie Choo, Chairman, for the Development Authority; and Mayor Rochelle Robinson, attested by City Clerk Vicki L. Acker, for the City.

Unfinished Business in the Packet

Three things in the approved documents are blank or inconsistent.

The cancellation agreement is undated. Its opening line reads "dated as of __________, 2026," and the City resolution carries a blank number, RES-2026-___. Both are execution-copy blanks, so the Council authorized a form rather than a closing. The resolution requires the agreement to be "in substantially the form attached hereto as Exhibit A with such nonmaterial changes, insertions, or omissions as may be approved by the person executing the same on behalf of the City," and authorizes the Mayor or Mayor Pro Tem and the City Clerk to execute it. The date of signature is not established by the packet.

The Deed to Secure Debt is given two book numbers for the same instrument. The cover-page cross-reference lists Deed Book 3960, page 160. The body of the agreement recites Deed Book 3906, page 160.

Microsoft's signature block describes the company as "a Washington Corporation limited liability company." Every other reference in the file, including the recitals on the first page of the same document, identifies Microsoft Corporation as a Washington corporation.

What Replaced It, on the Same Agenda

Item 7.B approved DCB Atlanta West, LLC's inclusion in the City's Revised 2020 Tax Plan for Combined Phase II and authorized execution of the related Tax Incentives Agreement. The packet identifies DCB Atlanta West as a Delaware limited liability company, successor and assignee of DC Blox Inc. and a wholly-owned affiliate of DC Blox, with a notice address at 1040 Crown Pointe Parkway, Suite 560, Atlanta. The 2026 document is styled Tax Incentives Agreement DCB Atlanta West LLC Combined Phase II Series 2026.

The Sentinel reported the Phase II package at more than $53 million in incentives against a $739 million investment, part of what it describes as an overall $1.2 billion campus, with two buildings instead of three after the company combined what were originally planned as buildings two and three, and completion expected in 2029. The incentive runs at zero percent property tax in years one through three, then ten percent in years four and five, twenty percent in year six, forty percent in year seven, fifty percent in year eight and sixty percent in years nine and ten. The reported savings by band are set out below.

This is the second Douglasville incentive for the company. In July 2024 the Council approved $98 million over eleven years for a colocation data center expansion, on a campus DC BLOX had announced in October 2023 as 55 acres and 180 megawatts. The Sentinel reported that package as covering building and property only, with computer server taxes expected to generate about $37 million a year for local entities, and the project as bringing 25 permanent jobs at around $130,000 a year plus roughly 500 construction jobs over five years. Mayor Pro Tem Terry Miller said at the time that it was hard to scoff at $2 billion coming into the community.

The change in approach is Microsoft's, and it has not changed Douglasville's. The Revised 2020 Tax Plan is intact, the Development Authority is still issuing, and the same consent agenda that ended one data center tax incentive granted a larger one.

How Long This Took

The unwind documents were first filed to the City's document portal on 18 May 2026, in an agenda item folder titled "Microsoft Project Douglas 2020 TIA Bond Cancellation RES." Project Douglas is the code name used for the Microsoft project since 2020. The city resolution in that May filing carries the date 1 June 2025 beneath its title and is otherwise substantially the text that went to Council fifteen months later.

A revised set was filed on 27 August 2026: the resolution as version 4932-4628-7788.v1, dated 8 September 2026, and the cancellation agreement as version 4917-8366-5060.v3. The Authority approved the cancellation on 28 August, three weeks after the Atlanta unwinds were reported. The item was presented at the Legislative Work Session on 3 September and adopted on consent on 8 September, with Deputy City Manager Chelsea Jackson as staff lead and the Economic Development Committee, chaired by Mayor Pro Tem Terry Miller, as the sponsoring committee.

From the December 2020 closing to the September 2026 termination is five years and eight months, against a bond that ran to 2038.

Why It Matters for Site Selectors and Developers

Both schedules are in the public agenda file, because the City files its attachments in full rather than by reference. Anyone benchmarking a Georgia data center incentive can read the terms rather than infer them, and can see how the same municipal tax plan priced an owner-occupier in 2020 and, in 2026, an operator building for hyperscale tenants.

Exiting a bond-lease where the operator holds its own bond costs transaction fees. The cancellation agreement contains no termination fee, recapture or exit price, and no obligation to repay incentives already taken. The purchase option was in the 2020 lease, and exercising it needed a City resolution and an Authority approval rather than a renegotiation. Where a third party holds the bond, redemption terms and notice periods become negotiated items and an early exit of this kind would not be available on a waiver.

Notice periods were waived. The Authority waived the notice requirements in the bond documents relating to prepayment, the purchase option and lease termination, which is worth knowing when modelling how quickly a Georgia exit can close.

A hyperscaler holding three Metro Atlanta tax incentive agreements has stopped asking for local incentives and is handing back the ones it holds. That does not appear to have changed what Douglasville is willing to grant, and the DC Blox approval on the same agenda is the evidence. Whether it changes what other jurisdictions are willing to grant, or what other operators feel able to request, is the open question the Fulton County resolution puts on the table.

Consent-agenda treatment is normal for this. No public hearing was noticed for either item on 8 September.

The Risks and Obstacles

Releasing the recorded instruments is the step most likely to lag. Six recorded instruments, a fixture-filing amendment and a centrally indexed UCC-1 must all be released, and the releases depend on the Clerk of Superior Court acting on the direction in the agreement and on the UCC-3 terminations being filed. Until they are, the county records still show a development authority as owner and a secured party of record on a project the operator holds outright.

The closing date is not fixed by the packet. The agreement is undated and the resolution unnumbered, with nonmaterial changes left to the signer's discretion, so the record before the Council does not establish what was signed or when.

The survival language is not cosmetic. Termination expressly preserves the Authority's Unassigned Rights under the lease and any indemnification rights in the Authority's favor. Those rights are defined in the Lease Agreement, which is not among the documents the Council saw.

The revenue effect is unquantified. The Board of Assessors and the Tax Commissioner both acknowledged the agreement being terminated, and both will now assess the property on a different basis. No figure appears in the packet, and the City has published no estimate of what the 2027 digest gains.

Microsoft's commitment is a corporate policy rather than a legal undertaking to Douglasville. Nothing in the cancellation agreement prevents the company from seeking incentives from this City or this Authority in future.

What to Watch

Whether the Cancellation of Bond, the Quitclaim Deed and Bill of Sale, the fixture-filing termination and the UCC-3s are filed in the Douglas County records, and on what date. The structure ends when those instruments are filed rather than when the Council votes.

Whether the Douglas County digest shows these parcels transferring from the Development Authority of the City of Douglasville to Microsoft Corporation, and what valuation follows in the 2027 assessment year.

The Development Authority's minutes for 28 August 2026, and the City's minutes for 8 September, which may record terms and discussion the agenda packet does not.

The East Point and Palmetto unwinds in Fulton County, which are the same transaction under different local documents and will show whether the terms Microsoft accepted in Douglasville are the terms it is accepting across the region.

Whether other Georgia authorities holding 2020- and 2021-vintage data center bonds see similar approaches. The structure was used across the state in the same period, and this is the first one we have seen reach its end.

This article is factual background and is not legal, financial, or investment advice.