$14B data hub proposed near Buckeye. Here's why locals oppose it

A Colorado developer is looking to build a massive data center on nearly 1,000 acres in the West Valley, adding to the region's accelerating prominence in high-tech.

But not everyone is on board.

Denver-based Tract is asking Maricopa County to rezone 529 acres near Buckeye from rural and residential to industrial to allow for the construction of a Northwest Campus data center. Maricopa County documents originally showed the campus would cost about $12.8 billion to build, but a company representative said the development cost is expected to be closer to $14 billion.

For its South Campus, Tract is also looking to rezone 435 acres from residential to industrial. The South campus will sit adjacent to the Northwest Campus.

The property is located just south of Roosevelt Canal. To the east is Tuthill Road, and to the west is Perryville Road. It crosses over both Yuma Road and Jackrabbit Trail.

The site lies in unincorporated Maricopa County, although it is surrounded by Goodyear to the east and Buckeye to the north and west.

According to the company's website, Tract is a data center land acquisition and development company. The data center would focus on managing massive physical infrastructure projects and the associated growth of cloud infrastructure.

According to documents submitted to the county, the data center will “significantly contribute to the economic growth and vitality of the county.”

It will provide 280 to 300 full-time employment positions, which will be skilled trade or engineering roles. The company cites the median wage of around $97,000 for IT positions in the United States in 2021.

The massive data center would generate for Maricopa County about $81 million per year in real and personal property taxes and over $1.6 billion over a 20-year period for both the proposed Northwest and South campuses, the company said in its application documents.

And there won’t be much of an issue with traffic. Data centers have less of an impact on traffic than residential or commercial uses, the application noted. Because the land is currently zoned for residential use, there would be more traffic under the current zoning. Data hubs don't create a large number of jobs, so not a large number of commuters.

Tract and its future clients will also be responsible for any road improvements needed.

If it gets that far. Neighboring cities are pushing back on the proposed data center.

Both the cities of Goodyear and Buckeye wrote letters of opposition to the county, citing concerns about traffic and building heights.

In an email to the county in November, Buckeye Principal Planner Ken Galica said the data center will not be compatible with the land use designation in nearby Buckeye, which is residential.

Galica cited the city’s clustering of light industrial land uses, which includes data centers, in certain areas as opposed to placing them in the center of residential areas.

“Approval of this project would not only result in a visual/aesthetic discontinuity between the project and surrounding neighborhoods (planned and existing) but would also serve to physically disconnect those more similar uses, negatively impacting trail networks, safe routes to school, etc.,” Galica wrote in the email.

A Buckeye spokesperson said the city doesn’t have further comment.

In December, Goodyear Contract Senior Planner David Williams wrote a letter of opposition to the county.

In Goodyear, the city has architectural design requirements, with buildings also being subjected to a 50-foot height limitation, Williams wrote.

The site would be bordered by Goodyear just to the east. And that section is currently designated for a neighborhood in the city’s General Plan. Because the section of Buckeye to the north is also designated for residential, the data center would be practically surrounded by residential land.

Williams also expressed concern over potential noise so close to residential areas, as well as the project needing to contract with Rural Metro for fire service needs, as it doesn’t fall in the service area of either Buckeye or Goodyear.

In a response filed in city documents, Tract said the concern is regarding the location of the project rather than the project itself. The response reiterated that the data center will generate less traffic than residential areas and will not require use of municipal water or sewer supply and is the best use of the land.

Due to concerns about the building's height, Tract reduced the maximum height from 110 feet to 60 feet.

According to city documents, the South and Northwest campuses will have groundwater rights to about 4,000 acre-feet, which will be accessible from wells. An acre-foot of water is about 326,000 gallons, generally enough to support a few households for a year.

The proposed development on the Northwest campus will require about 1,300 acre-feet of water.

The property has grandfathered groundwater rights, which enables the developer to consider the site. To qualify, the plot of land had to have been irrigated with groundwater between 1975 and 1980. The rights have to be purchased along with the land.

The proposed Tract data center would be part of the region's rapid growth in that industry.

Phoenix is the second-largest data center market in the nation in terms of new capacity leased by users, according to a report released by real estate firm JLL.

The Phoenix metro has 2.8 million square feet of data center space under construction, and during the second half of 2023, there were leases completed on 748 megawatts of data center capacity, according to JLL.

“It’s very active on the development side here,” Carl Beardsley, JLL managing director who specializes in data centers said. “As soon as a site has confirmation of power, it’s sellable.”

But, the power demands of a data center could be the constraining factor for data center development, he said. In order for a site to be viable for a data center, it has to have reliable access to large supplies of power, which have become more difficult to come by, and the process now takes much longer, he said.

Growth in artificial intelligence and reliance on mobile technology will continue to fuel the need for data centers around the country, he said, making it difficult to forecast what demand and construction needs will be in the next few years.

“We need data centers to live the lives that we now live,” he said of people’s reliance on smartphones and other technology used in daily life.

Much of the space that is under construction now has already been leased, so net new data center space likely won’t come online until 2025, Beardsley said.

Some major technology companies, like Google, Meta and Microsoft, have built their own data center facilities in the Phoenix metro, but Beardsley said that is unlikely to be a trend going forward.

“The development cycle is far too long for the tech companies,” he said, meaning they might opt for space developed by companies that specialize in those projects.

The Phoenix metro has about 6.9 million square feet of existing data centers, according to JLL. More than 2.8 million square feet is under construction and another 2.7 million square feet is planned.

Reach the reporter at ahardle@gannett.com or by phone at 480-259-8545. Follow her on X, formerly Twitter: @AlexandraHardle.

This article originally appeared on Arizona Republic: $14B data hub proposed near Buckeye, locals not on board