Doña Ana County approves historic $165B bond for data center

LAS CRUCES — Doña Ana County commissioners approved an unprecedented $165 billion industrial revenue bond to help finance a mammoth AI-training data center for Santa Teresa on Friday.

As soon as the ordinance authorizing the bond passed on a 4-1 vote, the room erupted in anger that had been brewing for seven hours.

Nicknamed Project Jupiter, the data center project is anticipated to be the largest single private investment in New Mexico’s history, with construction of offices, four data centers and a microgrid power generating and storage system. The developers, Texas-based BorderPlex Digital Assets and Stack Infrastructure of Colorado, said the total campus would be similar in size to the Mesilla Valley Mall in Las Cruces.

No tenant has been publicly identified for the data centers once they are online, though there has been speculation that a new partnership between Oracle and OpenAI might be interested. The $165 billion figure represents the maximum investment developers expect to make over the 30-year life of the project.

“There’s a national focus to secure these critical digital assets in the United States quickly, so that our country can continue to compete,” BorderPlex Digital Assets Chairman Lanham Napier told the commissioners. “The building of these AI assets is significantly contributing to increases in direct GDP. The locations of these community assets is being determined right now locally for generations to come.”

The IRB does not commit county funds or entail public debt. Rather, the county holds title to the property and equipment until the bond matures, leasing them back to the company.

The developers have agreed to pay $360 million to the county over 30 years in lieu of taxes; an additional $50 million to fund water and wastewater upgrades and $6.9 million for other community projects.

Critics of the proposal called the payments a pittance compared to the potential tax revenue for a development of this magnitude, while supporters and some of the commissioners said it was an opportunity to develop unused industrial land and leverage the project to bring capital funds into a community in desperate need of expensive infrastructure improvements.

The project has the backing of Gov. Michelle Lujan Grisham’s administration and economic development experts, hailing promises of 2,500 construction jobs over a decade and 750 permanent staff jobs — although the latter figure would ultimately be determined by whatever tenant locates its operations there. The state Economic Development Department projected a $96 billion overall economic impact in the region over the first 10 years.

The first public announcement of the project came in February, when the governor inked a memorandum of understanding with BorderPlex Digital Assets. Local attention came in August, after the developer applied for the industrial revenue bond and commissioners voted to give notice of a hearing to approve or reject the IRB.

In a three-week window, a furious campaign unfolded, with the developers asserting without evidence that a vote to reject or even postpone the decision would mean New Mexico would lose the project altogether.

Meanwhile, county residents, environmental and community organizations sought answers about the project’s impacts on water supply and quality and how much the county was trading away in potential tax revenue that could benefit local schools, roads and emergency services. Mistrust grew as a promise of twice-weekly community meetings dwindled to five town halls in total, where answers to many questions about water requirements, carbon emissions and other local impacts of the data centers were unavailable because, representatives of Stack Infrastructure said, engineering plans were not complete.

The Sunland Park City Council passed a resolution last week saying the city was not opposed to Project Jupiter, but wanted time to learn more about the proposal and ask questions about projected impacts on housing costs, roads, water and energy systems.

The developers said the facility would operate on a closed-loop cooling system requiring a single fill-up of millions of gallons of water that would take place over a six-month period. Estimates of Project Jupiter’s water needs during construction were not available. For the office campus, developers projected domestic water use averaging 20,000 gallons daily.

Representatives of the company told residents that cooling water may be trucked in from elsewhere, but that it might also explore using brackish water from Mesilla bolson — an aquifer holding a vast reserve of water not suitable for drinking. The county has sought proposals for construction of a desalinization plant.

An opposition campaign, Stop Project Jupiter, took form in the days leading up to Friday’s hearing, which took place under heavier security measures than is typical, including additional armed security and metal detectors at the entrance to the county government center.

Supporters and opponents of the project lined up to deliver comments to the commissioners over several hours. They ranged in age from an 89-year-old resident who thought the county was giving away too much revenue to a pair of seniors from Centennial High School who study engineering and said the project represented opportunities for their generation to stay in their home communities and prosper.

Three times during the meeting, Commissioner Susana Chaparro made motions to postpone the vote, complaining that the commissioners and the general public had not adequate time to examine hundreds of pages of documents fleshing out the detail.

The documents were made available only this week, some on Thursday night, with missing pages and exhibits. The county’s bond attorney said the missing pages represented closing documents and legal background that would be available later.

Chaparro also argued passionately that the community and even the City of Sunland Park had been left out of the process.

“If we believe in real democracy, and moving forward in a transparent way, then we include the community from the beginning,” she said. Nonetheless, each motion died because no other commissioner would second her motion.

Other commissioners said their support was driven by a need to bring capital investment that would fund improvements for Sunland Park and Santa Teresa, and to foster regional business growth that might lift families out of poverty and retain younger workers.

“This is an opportunity to try to build continual growth through economic development, to build that base so we can offer more to our residents,” Commissioner Manuel Sanchez said.

Ultimately, Chaparro was the lone “no” vote on the IRB.

As soon as the ordinance passed, a few opponents began shouting from their seats, hurling insults at commissioners who voted yes and engaging in street-protest-style chanting. Chairman Christopher Schaljo-Hernandez recessed the meeting while security officers tried to calm the room and ordered some protesters to leave.

When the meeting reconvened, most of the gallery seats were empty and the room was quiet as commissioners approved, also on a 4-1 vote, a separate ordinance declaring Project Jupiter eligible for additional assistance through state Local Economic Development Act funding.

The 89-year-old resident who had opposed the project, Balm Leavell, looked dazed when it was done. Speaking through a surgical mask, he shook his head and told a reporter, “This is capitalism run amok, that’s what this is.”