Data center projects are arriving in Kentucky communities faster than many local governments can update their rules. Carroll County, Kentucky, faced that challenge this year. The rural Ohio River county has fewer than 12,000 residents and no countywide zoning. When Deca (DC Kentucky Holdings LLC) proposed a data center campus near Ghent, the County needed a new tool. After months of public meetings and resident input, the Carroll County Fiscal Court approved a data center community benefit agreement with Deca in October. The Montrose Group served as the County’s negotiator.
Key Terms of the Carroll County–Deca Agreement
The agreement delivers $500,000 to the County within 45 days of approval and execution, and $5 million in total. These funds go into the County’s General Fund for community benefit purposes. Annual payments begin at the start of vertical construction or 30 months after the agreement’s effective date, whichever comes first.
Critically, the community benefit is not a substitute for taxes. The agreement grants no tax abatement, and the $5 million is paid in addition to all taxes owed. Any future industrial revenue bond and payment-in-lieu-of-taxes (IRB/PILOT) arrangement would require separate Fiscal Court action. Moreover, no such arrangement can reduce the community benefit. The agreement also does not require the County to support classifying project equipment as manufacturing machinery or other reduced-rate property for county property tax purposes.
Protections Without Zoning
Carroll County has never adopted countywide planning and zoning. As a result, it had few tools to shape a project of this scale. Residents raised fair questions about power bills, water and noise. Without zoning, the data center community benefit agreement became the County’s primary tool for answering them. Its protections apply to every phase of the project and to any land added later. They include:
- Ratepayer protection. The project pays its own electric, water, sewer and road infrastructure costs. It must also use all reasonable efforts to keep those costs off other customers’ rates. A utility letter confirms that electric costs won’t be passed to other customers, and the company posts a bond for public road work.
- Water protection. The project must use closed-loop cooling. Deca has stated it has no plans to use wells or other private water sources. If that changes, it must give the County 60 days’ notice, comply with environmental law, and protect groundwater and existing users.
- Resident protection. The agreement sets noise limits at the project boundary, setbacks of 100 to 200 feet, buffering, construction standards, and decommissioning and emergency planning requirements.
- Future opportunity. The County keeps the right to negotiate additional benefits with the project’s end user.
The Montrose Role
The Fiscal Court engaged Montrose in July 2026 to serve as the County’s negotiator. First, Montrose reviewed Deca’s project information, investment estimates and fiscal impact analysis. Next, it developed the County’s community benefit priorities and negotiating positions. Montrose then negotiated the term sheet and the business terms of the agreement, and benchmarked those terms against comparable data center agreements, including in Kentucky. Finally, it coordinated the agreement with potential incentives, including IRB/PILOT and Kentucky’s Qualified Data Center program.
A Model for Kentucky Communities
Data center demand is spreading into communities with little experience negotiating long-term agreements of this size. Carroll County’s experience shows that bringing in the right legal and consulting expertise early is key to securing a strong agreement. County counsel handled the legal review, and Montrose led the business negotiation. Because of that division of labor, the County was able to set priorities early and benchmark against comparable deals. It kept the community benefit separate from the tax base and from any future incentive. Most importantly, it wrote protections for ratepayers, water and neighbors directly into an enforceable data center community benefit agreement.
The Montrose Group advises Kentucky counties and cities on data center agreements, incentive structures and community benefit negotiations. Contact Wade Williams, Director of Corporate Site Selection Services, at wwilliams@montrosegroupllc.com.