In a newsletter Tuesday afternoon, Ward 4 council member Nikki Lee dropped a bombshell about the proposed Project Blue data center project: “Project Blue has multiple paths to build here, and every intention to do so,” she wrote, “regardless of what the City of Tucson decides.”
With that statement, Lee dropped a new and crucial piece of information that will likely be a central part of the discussion at Wednesday’s city council meeting.
That meeting is slated to be the first time Tucson elected officials discuss the massive and secretive Project Blue data center proposal.
The session will be in-person and livestreamed on YouTube on Wednesday Aug. 6, beginning at 12:30 p.m. at City Hall, at 255 W. Alameda. See the agenda here.
It comes after a raucous and packed public meeting on Monday night where the crowd was overwhelmingly against the project, and as Pima County Supervisors vote to lobby against Arizona sales tax exemptions for data centers.
Lee said she learned the new information after frank conversations with the Project Blue team, as well as Lee’s ongoing question tracker spreadsheet to get clear answers about the project.
“The decision now is not whether Project Blue will exist. It is whether Tucson wants to be part of how it is done,” Lee wrote.
Lee could be a deciding vote if the City Council moves forward with annexing land recently sold by Pima County to development company Beale Infrastructure.
In a Tuesday newsletter, Ward 6 council member Karin Uhlich said she remained against moving forward with the project until the city has a stronger ordinance on data centers writ large.
“I do not favor proceeding with the Project Blue annexation,” she wrote. “Hundreds and hundreds of residents have spent countless unpaid hours and — if my journey has been similar — unwelcome waves of added stress, confusion, anger and fear since this all surfaced.
The controversial data center project is one of the largest development projects ever considered by the city or county.
While no action will be taken during the upcoming city council study session, it will be the first time that multiple council members who have been sharply critically or vocally against the data center will discuss the project publicly.
Most local residents weren’t aware of the project until June, when the Pima County Board of Supervisors voted to sell 290 acres of unincorporated county land to Beale Infrastructure, a firm that develops data centers across the country.
“We’ve chosen this community precisely because of its access to abundant clean energy resources, proactive commitment to sustainability, as outlined in the city’s Climate Action and Adaptation Plan,” a Beale spokesperson said in a statement.
Among the important details unavailable to the public have been the company behind the data centers, which Arizona Luminaria reporting revealed to be Amazon Web Services.
Here is a brief primer of the documents shared along with the agenda for Wednesday’s City Council study session:
What’s in the memo
A Mayor and Council document lays out the basics around the data center proposal, and says the council will discuss the project as well as the proposed annexation of the 290 acres of land into the city of Tucson.
Even before its first public meeting, the city of Tucson had already filed a petition with the Pima County Recorder’s Office to begin the process of annexation.
The document also includes information about a state-level data center incentive and how it will impact revenue from this project.
Under Arizona’s 2013 “Computer Data Center” incentive, qualifying data centers are exempt from state and local sales tax and use tax on their purchase of equipment for up to 10 years — an investment anticipated to be $24 billion for Project Blue.
The city is not proposing any local financial incentives for the project, the document states.
The city of Tucson expects to receive $97.3 million in direct revenue from the project over 10 years in construction, utility and commercial lease taxes, among others.
How other Arizona cities are dealing with this
Mayor Regina Romero asked the city manager to initiate a review of data center ordinances and regulations by other Arizona cities.
Included in that document are the following examples:
- Chandler’s ordinance amends the city code to only allow data centers in specific districts and require enhanced noise mitigation.
- Mesa approved zoning amendments that require an additional zoning requirement to bring in a data center and additional standards for location and noise mitigation.
- Tempe proposed amendments to city code that require a 500-foot minimum buffer from residential properties and for on-site generators to be fully enclosed and plans to monitor high water and energy usage by data centers
Big promises on water
In an introductory statement, Thomure promises that the summary of the development agreement “will, to a large extent, fill the communication void that resulted from this project’s early-stage Non-Disclosure Agreement (NDA) requirements.”
In a summary of the draft’s key elements, the document includes Project Blue’s water-related promises:
- The developers of Project Blue will fund or directly invest in Tucson Water efforts to secure new water resources to offset their water use
- Project Blue will use minor amounts of potable water that will be offset annually
- The primary project’s initial use of potable water will eventually be replaced “drop for drop”
- Project Blue will save Tucson Water rate-payers money
- “In the simplest terms: Project Blue will not deplete Tucson’s water supplies for the community. No other project in Tucson to date can make such a claim.”
The city manager’s summary also notes that the development agreement summarized in the document won’t be the governing document for all parts of the project.
Read a draft of the proposed development agreement here.
More information on water-related promises of the project are included in the updated Project Blue fact sheet shared ahead of Wednesday’s meeting.
Economic impact
The Chamber of Southern Arizona, in collaboration with Pima County and the City of Tucson, retained Phoenix-based economic development research firm Applied Economics o create an economic analysis of the project.
It includes key economic promises from what the document terms “the company,” without using a specific name:
- 180 new jobs by the third year of operations in 2029
- Jobs with an average wage of $64,000
- Investment of $1.2 billion over three years, beginning in 2026, to construct 900,000 square feet of data center space
- $2.4 billion in new equipment in the first three years of operations (2027 through 2029), but which would be exempt from state and local sales tax for up to 10 years
- Between 2026 and 2028, an estimated 3,024 direct construction jobs
