The Tucson City Council’s rejection of Project Blue leaves a bunch of questions about what happens if its developers opt to build elsewhere in the metro area, particularly how they would get water and electricity for the data centers.
The council voted unanimously Wednesday not to allow the massive project within Tucson city limits; it would have been the largest customer of both Tucson Water and Tucson Electric Power. But Project Blue’s developers have been talking to other local jurisdictions as well, including Marana.
“The reality is this: Project Blue will be built in the Tucson metropolitan area, regardless of what the City of Tucson decides,” Tucson Councilwoman Nikki Lee wrote in a newsletter Tuesday. “How? While I do not have the list of backup sites, I was told directly that this company came into our community with multiple options already identified. Some of those sites are located on federal, state, or unincorporated county land within the Tucson metropolitan area and neighboring towns. Within our watershed. Within the TEP service area. With potable (drinking) water availability.”
Here are some of the questions that “reality” poses about Project Blue’s future, and the best answers we have so far:
Residents against Project Blue held signs and filled the chamber Wednesday at the meeting where the mayor and council voted unanimously against moving forward with the data-centers proposal in Tucson.
Q. If Project Blue were to try to set up shop in an unincorporated area of Pima County that doesn’t have municipal water service, could Tucson Water sign a side deal with the developer to deliver it water outside the city?
A. As current city policy stands, it would be difficult at best if not impossible. For such a side arrangement to happen, there would need to be an inter-governmental agreement or contract that would have to be approved under a mayor and council policy, said Tucson City Manager Tim Thomure. On Wednesday, the council gave clear direction to establish such policies for data centers at the urging of Mayor Regina Romero, who wants the city to have comprehensive policies for land use, zoning and environmental issues for data centers. Right now, those policies don’t exist.
Q. Could Project Blue go out and drill wells to serve its data centers in an unincorporated area of Pima County?
A. Yes. It could obtain an industrial use permit from the Arizona Department of Water Resources to drill wells — if it could meet several key conditions. First, if the proposed well or wells lie within 3 miles of the water service area of a city, town or private water company, those entities would first have to deny them water service. Second, Project Blue would have to demonstrate it has an assured water supply. That means it would have to show it would have enough groundwater to last for the duration of the permit. The permit typically lasts up to 50 years and can be renewed.
A small crowd gathered outside Tucson City Hall Wednesday to celebrate the City Council’s rejection that day of the Project Blue data centers project.
Q: Where might Project Blue get water if it locates in Marana, one of the jurisdictions its developers are talking to?
A: Marana Mayor Jon Post said the project could get water from nearby farms and irrigation districts if it chose to locate in the town.
Q. What happens to the 290 acres in unincorporated Pima County that was going to be sold to the Project Blue developer, and annexed by Tucson, for the first round of data centers?
A. Right now, that’s unclear. On June 17, the Pima County Board of Supervisors voted to sell that land, near the Pima County Fairgrounds on the metro area’s southeast side, for $20.8 million to Humphreys Peak Properties LLC of San Francisco for use by Project Blue, which is being developed by Beale Infrastructure.
But while the county board approved a land purchase agreement for the property, the deal never formally closed because a number of conditions for closing were attached that haven’t been met. Among them are annexation of the property into the city, which the City Council now won’t allow, and an agreement to serve utilities to the project. If those conditions aren’t met, the buyer of the land has the right to terminate the agreement, said Deputy County Administrator Carmine DeBonis, although the county hasn’t received a request yet to terminate it.
Q. Does the city’s non-disclosure agreement with Project Blue developers still hold now that the council has killed any Tucson role in the project?
A: The only fact about the project that is still withheld under the agreement is the identity of its future operator, said Assistant City Attorney Chris Avery. (A 2023 Pima County memo identified the end user as Amazon Web Services but no city or county official has confirmed, or denied, that information.)
“I don’t think we’d release information about who the ultimate end user would be. Pretty much everything else, we’ve released in the draft agreement (between the city and Project Blue) and in response to Coucilwoman) Nikki Lee’s questions” about the project, Avery said Thursday.
Q. If Project Blue sets up data centers outside Tucson, will Tucson Electric Power be the utility to serve it electricity?
A. Yes, if the new data centers end up within TEP’s fairly extensive service area that stretches north almost to the Pinal County line, northwest along Interstate 10 through much of Marana, west of the Tucson Mountains and south to Sahuarita and Green Valley along Interstate 19. To the east, the service area extends east of Houghton Road and well into Vail on the far southeast side.
Trico Electric Cooperative is the utility that would most likely house Project Blue if it were to locate outside TEP’s service area. Trico surrounds much of TEP’s service area on all sides but the east side. Most prominently, it serves electricity to a broad swatch of suburbanites living north and northwest of TEP country in Marana and unincorporated Pima County. UNS Electric borders TEP on the south in some areas, and the Sulphur Springs Valley Electric Co-Op operates just east and southeast of TEP’s service area.
