Two large-scale data centers proposed for Southern Arizona moved forward this week after the Marana Town Council voted unanimously Tuesday night to rezone roughly 600 acres for a facility developed by Beale Infrastructure, and Pima County completed a land sale exceeding $27 million for a second Beale project east of Tucson known as Project Blue on Christmas Eve. The back-to-back advances put the region on the verge of hosting its first major data centers — and deepened a conflict over who will bear the costs of powering and cooling them.

The two projects together promise $5 billion in capital investment, $145 million in local tax revenue, and more than 4,000 construction jobs, according to developers. But Arizona Attorney General Kris Mayes, the city of Tucson, and an organized citizen coalition are pressing utility regulators to reconsider an energy agreement they say could shift significant costs onto existing ratepayers — a dispute that may determine whether the projects proceed on their current timeline.

Marana council approves rezoning; Pima County closes land sale

The Marana Town Council voted unanimously Tuesday night to rezone roughly 600 acres for a large-scale data center developed by Beale Infrastructure, with council member Herb Kai absent and recused because his family owns one of the two parcels involved. Days earlier, on Christmas Eve, Pima County had completed a land sale exceeding $27 million for a second Beale facility east of Tucson, known as Project Blue.

The Marana parcels are owned by the Kai Family Trust and the Church of Jesus Christ of Latter-day Saints. Law firm Lazarus and Silvyn represented both property owners; partner Keri Silvyn also presented to the council on behalf of Beale, promising $5 billion in capital investment, $145 million in town tax revenue, and 4,200 construction jobs. The project is expected to require 550 to 750 megawatts of power at full build-out, supplied by Tucson Electric Power and Trico Electric.

Marana Town Manager Terry Rozema said the proposal was before the council because of the revenue it would bring. “There is so much infrastructure in this community that needs to be built, that we do not have the money to do,” Rozema said.

Mayor Jon Post framed the vote as a question of competitive positioning. “Marana cannot be the community that ignores opportunities,” Post said. “We are going to create an area in our community where jobs are going to come.”

A skeptical yes, and a referendum threat

Not every affirmative vote was unambiguous. Council member Patrick Cavanaugh, who pressed the hardest on unforeseen costs and energy impacts during public deliberations, voted in favor but said he was extending trust he was not certain would be honored.

“I need a lot of trust. I need to trust in the power companies. I need to trust in Beale. Nothing goes on the Marana citizens,” Cavanaugh said. “It’s going to take a lot: we can do this.”

Before his vote, Cavanaugh warned that the hundreds of backup generators required for the facility could create problems residents had not anticipated. “I think the noise is going to be a lot greater than you think, and the soot and smoke coming out of those is not going to be pretty,” he said.

Arnaud Dusser, director of development for Beale Infrastructure, said generator operations and their air-quality impacts would be overseen by county regulators, and noted that data centers, like hospitals, require continuous backup power.

Sue Ritz, a U.S. Army National Guard veteran who opposed the project, said she intends to pursue a citizen referendum on the rezoning decision. “The point of the referendum is to allow the citizens in the town of Marana to make a decision of what they want,” Ritz said. She also cited long-term cleanup costs for PFAS compounds — so-called forever chemicals — as an unresolved concern, noting that contamination remediation is among the reasons Marana is weighing a water rate increase.

Marana resident Colin Mellars said the town’s existing data center ordinance, which requires noise studies, water-sourcing disclosures, and power sufficiency assessments, was a step forward but contained gaps. “Companies view these fines as the cost of doing business,” Mellars said, urging the council to consult independent experts and tighten definitions before breaking ground.

Even as Pima County closed on the Project Blue land sale, a formal challenge to the project’s energy framework was taking shape at the Arizona Corporation Commission. Arizona Attorney General Kris Mayes filed a petition on Dec. 30 asking the commission to rehear its approval of an energy agreement between Tucson Electric Power and Humphrey’s Peak Power LLC, the entity associated with Project Blue.

The city of Tucson, underground-utility advocate Daniel Dempsey with Underground Arizona, and Tucson resident Reed Spurling — a member of the No Desert Data Center Coalition — filed separate rehearing requests.

Mayes argued that the agreement contains a provision allowing TEP and the data center customer to set their own rates by departing from the commission’s approved tariff. That rate-setting authority, she argued, belongs to the commission. “It is precisely because of the attractiveness of data centers and other large load customers to utilities that the Arizona Corporation Commission must be vigilant in carrying out the role created for it by Arizona’s founders,” Mayes’ petition stated. “The stakes are high: deals whereby a data center or large load customer does not pay its fair share can result in the shifting of their significant costs to other ratepayers, discouraging growth and distorting markets in the process.”

Spurling framed his request in similar terms. “Residential customers should not have to subsidize the costs of powering large data centers,” he said. “The Commissioners must do their jobs as required to protect us, or risk losing their jobs in the next election.”

ACC chair Kevin Thompson disputed Mayes’ reading of the commission’s role. “This protest isn’t actually about process or form. This is more performative band wagoning theater from the AG,” Thompson said in a statement, adding that rejecting the special contract would have left TEP free to proceed under existing tariffs with fewer consumer protections.

TEP spokesperson Joseph Barrios also rejected Mayes’ analysis. “The assertions put forward by the Attorney General do not align with the facts,” Barrios said.

Beale Infrastructure said commissioners had engaged in a thorough discussion and expressed confidence the matter would be resolved. The commission has 20 calendar days from each application’s filing date to decide whether to grant a rehearing.

Opposition coalition and union support draw a fault line

Tuesday night’s Marana council meeting illustrated the competing coalitions that have formed around data center development across Southern Arizona. The chambers were crowded, with opponents holding signs and union representatives in safety vests taking turns at the microphone during a public comment session that ran for several hours.

Representatives from the Western States Regional Carpenters Union, Laborers International Union Local 1184, and sheet metal workers union SMART Local 359 testified in support of the project. Fernando Lebron, a business representative with SMART Local 359, said large infrastructure projects are critical sources of regional employment. “When our members are working, the benefits extend off the job site,” Lebron said. “We support local businesses, contribute to tax revenue and invest in the community where we live.”

Opponents argued that trade employment gains could not offset long-term environmental and financial risks to residents — and that neither the council nor the commission had adequately weighed them.

The No Desert Data Center Coalition, which first organized ahead of Pima County’s vote to rezone land for Project Blue, said it has drawn hundreds of participants to meetings, teach-ins, and pressure campaigns targeting both county and city officials. The group has also shared its organizing strategies with communities in other states facing similar development proposals.

A third data center possibility at Davis-Monthan

In addition to the two Beale projects advancing in Pima County and Marana, the U.S. Air Force has an open solicitation for a data center that could be housed at Davis-Monthan Air Force Base in Tucson. A base spokesperson said offerors would be required to demonstrate how they would minimize impacts to surrounding communities related to energy access and affordability, water, and communications bandwidth.

Beale Infrastructure said it expected Project Blue to break ground sometime in 2026 but did not provide a specific date.