Hermantown / Google numbers

Why it matters

Two items to update on yesterday's Hermantown writeup. (1) The disclosed project numbers ($650M / $2B total / 1,500-2,000 jobs) anchor the negotiated-tax-abatement math. The proposed $80M abatement against $2B total spend is a 4.0% effective abatement rate — at the lower end of typical hyperscaler / state-incentive packages (Henrico VA averages 6-8%, Mount Pleasant WI was ~12% on the original Foxconn / now Microsoft package). If NC HB 1004 passes (yesterday's lead) banning local tax incentives entirely for ≥40 MW loads, sites in NC would face an effective +4-12% capital-cost penalty against MN / VA / WI peers — a real geographic-arbitrage delta worth modeling in firm-equivalent-mw-underwrite.md. (2) Three phases over 8-10 years is the disclosure that shifts the lawsuit math. If Google is contractually committed to a 3-phase / 8-10 year buildout, the 'sue-then-table' play (now demonstrated in MN / OH / IL within 30 days) carries a new cost: each year of litigation delay pushes Phase 3 commissioning past Google's AI-capacity-commitment window, which (per Google's own April 2026 capex guidance) is structured around a 2030 baseline. A 2-year delay collapses Phase 3 entirely. That's a real operational risk Google will price into its alternative-site portfolio — and worth tracking whether Google quietly accelerates a backup MN / WI / IA site as a hedge over the next 30-60 days.