Projects would bring data center, missile company to Tucson area

A new industrial center in the works for Tucson’s southeast side would host at least one data center, while a second effort nearby, sources say, would bring a hypersonic missile company.

Pima County plans show three “Illustrative Concept” designs that a 290-acre parcel of county-owned land near the Pima County Fairgrounds could be used for. County staff and the county Planning and Zoning Commission recommend approval of those land uses.

And in a memo to the Board of Supervisors, Pima County Administrator Jan Lesher said a company, code-named “Project Blue,” would generate about 180 new jobs once construction is completed, with salaries averaging about $64,000 annually, resulting in an “annual economic impact” of about $63.5 million and about $7.3 million in “annual labor income.”

Pima County Supervisor Steve Christy said the space would be a data center. He said the company, which will have several buildings of 220,000 square feet at the site, will supply a “significant number of jobs, but we don’t have specifics.”

“The county met with the construction company and the lending company last week,” Christy said.

County supervisors are expected to have a purchase-sales agreement presented to them as early as their June 17 meeting, or at a board meeting in July.

If the agreement is approved, the county would sell the land, appraised at $20.875 million, to the company. Once the land is sold, it would be annexed by the city.

The purchaser “anticipates using renewable water supply (reclaimed water) for industrial use from the City of Tucson,” Lesher wrote. The water supplier would be Tucson Water.

Tucson City Councilman Kevin Dahl told the Star Wednesday, “I haven’t been briefed on this yet and I don’t know any details, but we shouldn’t consider reclaimed water a free resource. It’s water. It takes money and energy to treat it. I have lots of questions about this.”

Data centers use large amounts of electricity and, potentially, water. By some estimates, the Associated Press reported, a mid-sized data center uses the same amount of water as 1,000 households.

County Supervisor Christy said that when meeting with the construction and lending companies last week, “I questioned them on a lot of the issues that we seem to be encountering whenever a business comes into the county and they seem to have it covered.”

Sources tell the Arizona Daily Star that a second project, also located on the southeast side, would host a hypersonic missile company.

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U.S. Sen. Mark Kelly wrote in March to a California-based defense company, Castelion Corp., proposing a Tucson site for expanding its “domestic manufacturing and testing,” as first reported Tuesday by Arizona Luminaria.

“The proposed site for Castelion’s expansion in Tucson is home to the University of Arizona,” Kelly wrote, pitching the university’s College of Engineering aerospace programs “that specialize in designing and developing technology for defense systems.” Arizona is a “national hub” in the aerospace and defense industry, Kelly wrote.

Based in El Segundo, Castelion was founded in 2023 by three former SpaceX employees. The company’s website says it is focused on “the rapid development and mass manufacturing of complex defense systems.” The Wall Street Journal reported this January that the startup raised $100 million “through debt and equity to build hypersonic missile systems.”

Project Blue, meanwhile, is a company that “operates in the advanced and emerging technology industry sector,” Lesher wrote in memos to the Board of Supervisors.

The three “Illustrative Concept” designs filed by the county with its Development Services Department in late April show what the land — located along the north side of Brekke Road between Houghton and Harrison roads, just north of the county fairgrounds — could be used for.

The first design shows 10 “Data Center Building” areas, each totaling 220,000 square feet, along with “Logistics/Administrative Building” areas.

The second design shows a total of 450,000 square feet of “Biomedical Research & Development” areas, 175,000 square feet of “Manufacturing and Warehousing” areas, and 350,000 square feet of “Corporate Headquarters Building” spaces.

The third design shows 1 million square feet of warehousing areas, 500,000 square feet of “Light Industrial” spaces and 550,000 square feet of “Business Park” areas, including office and administrative buildings.

Lesher has estimated that construction would begin sometime in 2026 and last about two years, with operations beginning in 2029.

The estimated “hard construction cost” is approximately $1.2 billion, Lesher said in a May 21 memo. The construction project would generate more than 3,000 jobs and over 2,000 “additional indirect jobs forecasted” during the construction period, she wrote.

“Project Blue” would generate about $97.3 million “in tax and fee revenues generated to the City of Tucson from 2026-2035” and about $152 million “in tax revenues generated to Pima County and other local taxing districts” over the 10-year period, Lesher said.

Tucson city spokesman Andy Squire said Wednesday the city has a nondisclosure agreement with an aerospace and defense company, but that it is not in regards to Project Blue.

When asked if the city has ever received communication from Castelion, the California-based defense company, Squire said he did not have any knowledge of that “and the NDA precludes us from discussing any parts” of the agreement.