El Paso District 2 city Rep. Josh Acevedo is seeking to terminate the tax break agreement the city awarded Meta Platforms Inc. in exchange for the tech giant developing a $10 billion data center in Northeast El Paso – a move officials have warned could create massive financial risks for the city.
Acevedo — whose district comprises portions of South and Central El Paso — is calling for a vote to direct the city manager and city attorney to “initiate negotiations to terminate the Chapter 380 Economic Development Program Agreement and any related incentive agreements with Wurldwide LLC and Meta Platforms, Inc.,” according to a draft of the agenda item obtained by El Paso Matters. The proposal will be discussed at the Tuesday, June 9, City Council meeting, Acevedo said in a news release, though an agenda has not yet been posted on the city website.
Canceling the agreement as construction is in progress would raise legal questions about what losses the city may incur – including facing lawsuits by the trillion-dollar company. City staffers have argued such a move also could cause other businesses to question entering into legal agreements with the city of El Paso.
Acevedo would need support from four other council members to terminate the contract, and it’s not clear he has those votes.
The move comes after months of increasingly intense public backlash to the data center project. Opponents argue the facility will consume unsustainable levels of groundwater, produce air pollution as a result of the data center’s dedicated gas-fired power plant and create too-few jobs to justify the tax breaks and resource usage.
The economic development agreement the city executed with Meta in late 2023 grants the company an 80% break on city taxes for 35 years and the city also provided $12.5 million to improve road infrastructure near the data center site. The incentive applies to the full $10 billion Meta is investing, not just the $800 million initial commitment.
The city of El Paso has estimated the data center will pay around $15 million a year in city property taxes, becoming the city’s biggest property taxpayer when the campus is fully built.
RELATED: Meta data center expected to become city of El Paso’s largest property taxpayer
Acevedo said he was motivated to cancel the deal by “significant public concern regarding utility affordability, water resources, environmental impacts, infrastructure burdens, transparency concerns, questions regarding contractual enforceability and governmental immunity, and the adequacy of projected public benefits associated with the project.”
Meta has said its facility will employ 300 permanent workers when it’s operating, plus 4,000 workers during the construction phase through 2028.
City-owned El Paso Water is supplying water for cooling to the data center and has estimated the facility will use on average 400,000 gallons of water per day. Meta has said it will replenish twice as much water as its facility uses, although how that will work in practice is unclear.
The first portion of Meta’s campus will become operational in July, according to filings El Paso Electric submitted to the Public Utility Commission of Texas.
El Paso Electric is building a $500 million, 366-megawatt natural gas plant dedicated to Meta’s facility in partnership with a generator company called Enchanted Rock. Meta’s power plant is permitted to emit annually 47 tons of particulate matter, 98 tons of carbon monoxide and 68 tons of nitrogen oxides, which contributes to ozone pollution.
The amount of greenhouse gases the facility will emit is not clear, but city staffers have said additional data centers in El Paso city limits – Meta as well as a data center proposed on Fort Bliss – would increase the city’s greenhouse gas emissions by 21%. The climate action plan the city adopted this year instead calls for reducing greenhouse gas emissions in the city.
“We have heard loud and clear from the community on this issue and now is the time to break the contract agreement with Meta,” Acevedo said in a statement. “This hyperscale data center will drain our region’s water resources and bring further pollution to the area with its gas-powered electrical plant.”
City staffers and council representatives in mid-April held a closed-door discussion during executive session about the implications of terminating the agreement with Meta. After the discussion, the city said canceling the tax break agreement with Meta without cause could create “potential liability exceeding $1 billion.”
“The concerns around water use, energy demand, and environmental impact are valid, and they are being taken seriously. This agreement was approved by the previous City Council, and while the vast majority of Council was not part of that decision, we are responsible for ensuring it is enforced and that El Paso families are protected,” Mayor Renard Johnson said in a statement issued after the closed-door discussion.
SEE ALSO: Proposal: No tax breaks, incentives for future data centers within city
Staffers with the city have pointed to the additional property tax revenue Meta will produce as a benefit of the project.
In an interview, Acevedo said his constituents are nearly universally opposed to the Meta project. And the benefits of the data center to the city and its residents are unclear, he said.
“It just seems to me that this was a really bad deal,” Acevedo said. “I don’t want to have that on my conscience, that we could have done a lot more and we decided not to do it over money.”
This is a developing story and will be updated.
The post El Paso city representative seeks to terminate Meta data center deal, a move city officials have warned carries huge risks appeared first on El Paso Matters.
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