'You can't drink data.' Public debates Santa Teresa data center

LAS CRUCES — A large data center proposed for Santa Teresa drew opponents as well as supporters from the public Tuesday as Doña Ana County commissioners heard a proposal for a large tax incentive package to help build it.

The commissioners voted 4-1 to proceed to a September vote on $165 billion in industrial revenue bonds, which support private manufacturing and infrastructure investments through tax abatements. The bond is secured by the enterprise’s future revenue and does not commit the county to any spending or borrowing; but it does forego potential revenue from taxes in exchange for negotiated direct payments.

The proposed Project Jupiter would include four data center buildings supporting AI technology and a microgrid facility producing and storing electricity.

Behind the project is BorderPlex Digital Assets, a firm based in Austin, Texas. In February, the company projected it would spend $5 billion on construction over a decade, to include $1.5 billion in annual IT equipment acquisition and $230 million in manufacturing equipment.

The company’s leadership includes Alicia Keyes, who served as New Mexico’s Economic Development Secretary during Gov. Michelle Lujan Grisham’s first term. Keyes, who was present at Tuesday’s meeting but did not speak, is BorderPlex Digital’s government affairs officer.The governor signed a memorandum of understanding pertaining to the microgrid that would power the facility, agreeing that as long as it provided power solely to the facility it would not be regulated as a public utility. The MOU also allowed the possibility that electricity generated from natural gas or nuclear generation could qualify as “zero carbon” energy under New Mexico carbon-reduction law, if the greenhouse emissions contributing to the microgrid remained below certain thresholds.

The commissioners also voted to consider an ordinance qualifying the project for state LEDA funds, which would grant the company a 50% return on the gross receipts and compensating taxes collected by the county and reimburse qualifying expenses.

Public hearings on both ordinances are set for Sept. 19.

Many in attendance displayed homemade signs protesting the project, with most expressing concerns about the water required for cooling data centers. Santa Teresa, where the proposed data center would be built, and areas of Sunland Park have contended with longstanding issues with water supply and quality. One of the signs stated, simply: “You can’t drink data.”

“This sounds to be a wonderful thing for Doña Ana County, but there’s a right way and a wrong way to do this,” Commissioner Susana Chaparro said, calling for greater community engagement preceding the ordinance process. “This community deserves answers to the questions they may have.” She subsequently voted “no” on moving the process forward.

Some commenters requested detailed information about the project, while others were categorically opposed to projects supporting AI, which requires massive computational infrastructure, electrical power and water for cooling.

BorderPlex Digital Chairman and cofounder Lanham Napier offered a brief summary of the Project Jupiter proposal, including $300 million in direct payments in lieu of taxes to the county and pledges of 2,500 construction jobs and 750 permanent positions, with full salaries ranging from $75,000 to $100,000.

Addressing concerns about water, Napier said the center would feature a closed-loop cooling system requiring a single fill-up at the beginning of its service life. He argued that Project Jupiter would not affect residents’ electric bills and would explore using brackish water to sustain its operations, with ongoing water consumption limited to daily workplace use.“For any water consumption that’s required, this project will invest to fund it,” Napier said. “We will end up with very valuable jobs on the other side of it.”

“We know what the needs are for our community, particularly around water,” Commissioner Manuel Sanchez said, participating in the meeting by telephone. “With the state really looking to push for appropriations to help us build this infrastructure, potentially, it means that our communities could benefit from tapping resources that we’ve never been able to tap in the past.”

Local residents, including some prominent community organizers in the county, urged the commissioners to put equity for local communities ahead of the interests of corporate shareholders, while others argued in support of Project Jupiter, saying additional jobs in the area could help families in the border-area colonias stay together.

Sylvia Ulloa of Las Cruces was among the speakers seeking a careful study of the potential lost tax revenue that could support local schools, roads and services — including water.

“What are we giving up when we say that we’re not going to tax these corporations on all of this infrastructure, on their equipment?” she said. “We need to know for sure: What is it that we’re giving up for that?”