The controversial city incentive agreement with Meta Platforms Inc. for the Northeast El Paso data center will remain in place after the City Council voted 5-3 against a proposal that could have led to its termination.
“Vote them out” and “We’ll see you in November” a crowd of people who oppose the data center chanted after the heated Tuesday meeting that featured seven hours of public comment, much of it opposed to the data center plans.
City Reps. Josh Aceveo, Chris Canales and Lily Limón voted in favor of terminating the contract, while city Reps. Alejandra Chávez, Cynthia Boyar Trejo, Deanna Maldonado-Rocha, Art Fierro and Ivan Niño voted against it.
The city representative positions held by Canales, Chavez, Fierro and Niño are on the November ballot. Canales and Fierro are the only remaining members of the 2023 council that unanimously approved the incentives for Meta under what is known as a Chapter 380 agreement.
The economic development agreement grants the company an 80% break on city taxes for 25 years. The incentive applies to the full $10 billion investment Meta said it’s investing, although its initial commitment was $800 million. The El Paso County Commissioners Court in 2023 approved a similar agreement with Meta providing county tax breaks. Meta will pay the full amount of property taxes from the Ysleta Independent School District, El Paso Community College and the El Paso County Hospital District.
Meta officials have not responded to requests for comment from El Paso Matters on the proposal to revisit their 2023 agreement with the city.
“I’ve talked to previous council members, and they regret their decisions, and we have a path to fix this – to really look at this and have difficult conversations,” Acevedo said. “We can say that most of us were not here when this decision was made, right, and that’s factual, but what I’m hearing from you is now you’re here, you have the power – what are you going to do about it?”
Acevedo, who with Limón placed the item on the agenda after months of intense public backlash, said the threat of lawsuits was “fear mongering.”
“The question to us was brought up, are you on the side of the people or are you on the side of the profit? At the end of the day – at the end of the day – we just need water. I’m looking forward to a glass of ice water when I get home,” Limón said of listening to all of the speakers. “It’s all about the water.”
Canales warned that despite efforts to cancel the agreement, what remains unknown is how Meta might respond.
“There’s absolutely no guarantee that Meta will agree to come to the table. Meta, for better or for worse, seems to be in compliance with the existing agreement, that’s just the reality of the situation right now,” Canales said.
Opponents at Tuesday’s meeting largely expressed environmental concerns, contending that the facility would place heavy demands on groundwater supplies and electricity and generate excessive amounts of air pollution. Others argued the deal creates too few jobs in return for the tax breaks it receives.
“While the public is expected to conserve resources, this project could place enormous demand on resources that are already scarce. Growing up in El Paso, I learned that water is precious. We are constantly reminded to conserve because we live in a desert,” Westsider Araceli Reyes said. “So, it feels wrong that a corporation could use up to 1.5 million gallons of water a day while El Pasoans have to take shorter showers, recycle and do more with less.”
Many of the opponents threatened to vote out of office city representatives who didn’t support the contract’s termination.
A handful of people who support the data center, including contractors working to build it, said during the meeting that the data center has already created numerous jobs and that breaking the agreement would put the city at risk for future development.
The agreement only commits Meta to creating 50 permanent jobs, though the company has said it will employ at least 300.
SEE ALSO: El Paso officials say city can’t cancel Meta data center deal
Sandy Gomez, an attorney and partner for the Husch Blackwell law firm that specializes in public law, said that she estimated the city could be liable for $800 million.
“There’s potential actual damages, so loss of the incentive, consequential damages, which are unknown at this point, but if they had financing or other types of agreements that were tied to the abatement,” Gomez said.
City officials have argued the data center would generate new commercial tax revenue that could help reduce pressure on residential property taxpayers.
The city estimates the data center will pay about $15 million a year in city taxes alone, becoming the city’s biggest taxpayer. The annual city property taxes add up to roughly $400 million over 25 years with the tax abatement in place.
Representatives of the county, hospital district and community college haven’t provided El Paso Matters with estimates on how much tax revenue they’ll receive from Meta. Ysleta ISD would have little to no net change in its revenue picture under complex state funding laws.
Angelica Rosales, project director with Sundt Construction, spoke in favor of keeping the agreement in place, though she misrepresented the impact of increased tax revenue to Ysleta Independent School District from the Meta project.
“I just want to encourage, again, mayor and council, to stand firm on this,” Rosales said. “We have a legal and binding contract in place, and representative, or former EPISD trustee Acevedo, I would think that EPISD, with their $52 million budget shortfall, would love to have the $55 million million that YISD is about to get from this.”
However, under Texas school funding law, any additional revenue YISD would receive from Meta would be offset by a similar reduction in state aid.
The post City of El Paso’s Meta data center incentive agreement to remain in place appeared first on El Paso Matters.
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