Submitted signatures could force vote on Marana data center. What this means for future projects

Project Blue — a proposed massive data center to be built in Marana, near Tucson — has faced opposition from the beginning. Tucson City Council meetings were packed with residents protesting the project. Residents were concerned about excessive energy and water use.

And now, two groups concerned about the project are trying to force a public vote on it. The No Desert Data Center Coalition and Arizonans for Responsible Development submitted 2,800 signatures apiece to the Marana Town Council to put two rezoning issues on the ballot. They only need about 1400 valid signatures.

Jeremy Duda is a reporter for Axios Phoenix and he said this could be a sign of things to come for controversial data center projects in Arizona.

Full conversation

LAUREN GILGER: Good morning, Jeremy.

JEREMY DUDA: Good morning.

GILGER: Thanks for coming on. So they submitted 2,800 signatures. They only need about 1,400. Seems like pretty good odds they might get this one on the ballot?

DUDA: Probably. For any campaign like this, you need a pretty good cushion of signatures just to account for the inevitable invalid ones. But yeah, with twice as many, roughly twice as many signatures as they need for each of these referendums as two parcels that were rezoned.

And just to clarify real quick, project, this is the Marana project is from the developer of Project Blue infrastructure. It's not part of Project Blue, just all in the Tucson area and all by the same developer. But it's obviously through the developer, a lot of folks see a connection to Project Blue because the same developer that's inspired such controversy down in Tucson.

GILGER: Yeah, and Project Blue has been controversial for some time now. Let's talk a little bit about that and what happened. The developer here is Beale Infrastructure. They want to build this project. They wanted to build it initially using water from the Tucson area. That didn't happen, but where did it end up?

DUDA: Well, it ended up still in the Tucson area, just outside of the Tucson city limits. What they wanted Tucson to do was to annex the land, bring that into Tucson, and then they would be part of the city limits, I believe, with access to city water. The Tucson City Council, after opponents organized very heavily against Project Blue, I believe unanimously rejected the annexation proposal.

So everything kind of shifted over to the Pima County Board of Supervisors, which approved this is, I'm not even sure if it's even in a different location, but it is in a spot where it's in the county land, not city land, and it is moving forward pending the outcome of a lawsuit.

GILGER: Yeah. So then we have this data center project by the same developer pop-up in Marana. What is it supposed to look like?

DUDA: It is a data center campus in the area, it's on two parcels of land, and the issue here is that there had to be a rezoning. You know, these things, data centers are popping up all over the places, these are increasing pretty much exponentially all over the country, and Arizona is one of the biggest markets.

But a lot of these things, you don't generally hear about them unless the city or the town or the county has to take some kind of action. And that's what we saw here in Marana with a rezoning that was required. And that's when the opposition really came out in force.

GILGER: Right, OK, so Project Blue, as we talked about, has been kind of a poster child for the controversy around data centers in the desert, but they're becoming more controversial as you're getting at here across the state, and lots of them are popping up.

Talk a little little bit about the concerns that folks have? I mean, we mentioned water, we mentioned energy use. There are already a lot. Like, does it make a difference at this point?

DUDA: I think to people who view these as environmental concerns or unnecessary uses of power and water, I think any of them to those folks are going to be a concern. And this has become such a polarizing issue. I think any time it comes up in a public forum, opponents are going to come out and start organizing. We saw this in Chandler last year.

Remember former Sen. Sinema came to lobby some city officials for this and the city and the City Council ended up, I believe, again, unanimously rejecting this. So anytime that there's going to be some kind of municipal action, some kind of vote, you're going to start to see folks take advantage of the opportunity to shut it down.

GILGER: Right, And we're starting to see cities reject them like Chandler did. Also cities looking at kind of ordinances, regulations for these data centers. The governor also wants to take action in a way as well. Tell us what's on that front.

DUDA: Well, the governor has a couple of things that she's looking to do. One is, you know, new water fees, because that's one of that is one of the major concerns, particularly on the left with data centers, the amount of water they use. And I believe like some of the technology for them and the newer ones is improving to the point where they have kind of closed loop water systems.

There's also a major tax incentive that was approved years ago as Arizona was trying to, as the proliferation of data centers was really just starting and Arizona was trying to attract a lot of these things. I believe it was under former Gov. Ducey, there's a major tax incentive that was signed. Gov. Hobbs wants to get rid of that now, says, hey, we have no problem attracting data centers where I believe the number two market in the country for them outside of Virginia.

And so she wants to get rid of that and save some money on that. Remains to be seen, getting rid of a tax incentive requires a two-thirds vote over the Legislature. So that's a pretty steep hill to climb.

GILGER: Yeah, OK, so let's talk more about the potential of voter referendums here, like we're seeing happen in Marana. Like you're reporting this might not be the last time we see this happen. Why not?

DUDA: Well, I think now that folks, you know, the combination of the increased activism every time a city has to take some kind of vote on one of these things. And now that folks are, I think Marana kind of shows folks, hey, this is kind of the next frontier that if the town council, the city council, the board of supervisors, whoever doesn't want to take our concerns into account, we can organize against it. And put this on the ballot where, given how unpopular these things are, I think you have to assume the odds of defeating it are at least decent for the opponents.

Now, you do, there is kind of a perfect storm here, and this isn't something that I think that would be applicable everywhere. You know, if Phoenix approves a number of signatures you need is based on the size of the electorate, and obviously in Marana with 60-something thousand residents is collecting the signatures a lot different than in Phoenix or Pima County or Mesa or something.

GILGER: Right. You would need a whole lot more. And it's not always possible to challenge these things. Like, there is not always some kind of official action that has been taken to approve these?

DUDA: Sure. Most of these you don't hear about when they start up because they end up on land that's already zoned for industrial use. Really, when you start to see the controversies, if there's a rezoning or if there is a development agreement or an annexation or something that the city or the county needs to do, that gives people, that gives opponents something to kind of sink their teeth into.

And then even if something that passes and you want to refer to the ballot, you still have to be able to organize against it. Collecting signatures isn't always easy. In this case, in Marana, they had a worker power group kind of backed by worker power, which is an organized labor group tied to the Unite Here labor union that's been very active over the last few years all over the state and taking development, local development issues and referring them to the ballot.

So there's a lot of help on the ground from this very well-organized labor group. It was a small electorate where you needed relatively few signatures. And obviously, there was something that actually could be legally referred to the ballot. So that's not going to be the case in every one of these things.

GILGER: Right. But you spoke with a few political consultants who say that, you know, developers who want to build data centers here might be thinking about planning for this, right? Like maybe budgeting for a potential referral to the ballot as they kind of plan out the projects ahead.

DUDA: Or looking for areas where, looking for situations where something's not going to be susceptible to a citizen referendum, looking for places where it'll be difficult because of, signatures or other hurdles. Like Marana probably seemed like a pretty good bet for this data center because, I mean, I think the Planning and Zoning Commission, I think, was unanimous. I think there might have been one vote against it on the Town Council.

You know, the elected officials and the planning and zoning officials were pretty supportive. which I'm sure to the developers, looked like it meant that they wouldn't have the same issues they had in Tucson or in Chandler. And then, low and behold, the activists, the organizers, they still wanted to have their say as well.

GILGER: Yeah. So developers might be looking at different areas when they're considering where they might want to put data centers in the future?

DUDA: Well, certainly, I think that's especially depending on what happens with Marana, if that goes to the ballot, which the odds will look pretty good based on the signatures. And if it gets defeated, I think that's definitely something that data center developers are going to take a look at and say, OK, how do we keep this from happening to us? Because these things are just going to, they're going to keep building. The advent of AI means that there's a greater and greater need for data centers. It's not going to slow down. They have to go somewhere. And right now, a lot of folks want to put them here.