City Manager Dionne Mack and City Attorney Karla Nieman expressed caution about a proposal to terminate an agreement with Meta for its data center in Northeast El Paso.
City Rep. Josh Acevedo on Tuesday, June 2, announced his plan to introduce an item at the upcoming El Paso City Council meeting to cancel a 380 Agreement for the massive data center, which would result in the loss of critical tax subsidies for the project.
“We have heard loud and clear from the community on this issue and now is the time to break the contract agreement with Meta,” Acevedo said in a news release. “This hyperscale data center will drain our region’s water resources and bring further pollution to the area with its gas-powered electrical plant.”
However, in a news release Wednesday, June 3, Nieman and Mack issued a statement saying that the city “cannot simply decide to terminate the agreement.”
“The project was approved through legally binding agreements adopted by the City Council in 2023,” a news release from the two city officials stated. “Since then, Meta has invested millions of dollars in land acquisition, planning, engineering, infrastructure, and construction based on those agreements. Construction is already underway.”
Mack and Nieman’s statement went on to say that any additional expenses brought on by canceling the project, such as outside counsel, court costs, staff time and financial damages, “would have to be funded by the public.”
“Because of those investments and contractual commitments, the city cannot simply decide to terminate the agreement,” the statement continued. “Any attempt to do so would likely result in significant legal challenges, and there is little reason to believe the company would voluntarily abandon a project after investing substantial resources in El Paso.”
“The practical question is whether taxpayers should be asked to absorb potentially significant unbudgeted legal costs in an effort to undo agreements that were lawfully approved and relied upon by a company that has already invested millions of dollars in our community,” the statement concluded. “The city’s responsibility is to protect taxpayers from unnecessary financial exposure and ensure public resources remain focused on core priorities such as public safety, streets, parks, infrastructure, and other essential services—not on costly and uncertain litigation.”
Mayor agrees with city officials’ assessment
Mayor Renard Johnson, in a post on Facebook Tuesday, June 2, agreed with the assessment from Mack and Nieman, saying that attempting to terminate the contract “exposes El Paso taxpayers to significant legal liability, years of litigation, and potentially substantial financial damages.”
Johnson also warned that canceling the contract could harm El Paso’s reputation as a place where new businesses want to set up shop.
“As mayor, I believe we must protect both our community and our credibility,” Johnson wrote. “That does not mean we ignore the concerns residents have raised. Those concerns are exactly why the city has spent the last several months engaging the public, reviewing potential impacts, and developing a policy framework that addresses water resources, electrical infrastructure, environmental considerations, incentives, land use, transparency, and long-term protections for residents.”
Acevedo: ‘Action must be taken now’
For Acevedo, the call to action has come from the community.
In a series of community meetings, residents consistently raised concerns about the environmental impacts of data centers and insisted that the Meta agreement be terminated, despite the threat of legal action.
“As residents of a desert community, the value of our water and air far outweighs any revenues the city would collect or possibly lose from this major data center,” Acevedo said. “With a massive data center planned for Fort Bliss and one in neighboring Doña Ana County, we cannot afford to put our community’s health and natural resources at risk. Action must be taken now.”
The city is already taking action to curb the rise of data centers — the City Council has voted not to recruit or incentivize new data centers, and city officials are at work on a finalized Data Center Policy Framework.
Canceling the Meta agreement, however, would be a change of pace, as the city has so far taken no action to halt current data center development.
“This data center was brought forth with the help of the Borderplex Alliance to satisfy the wealthy,” Acevedo’s news release stated. “Their CEO, Jon Barela, disrespected our community and is working towards advancing Gov. Greg Abbott’s agenda to make Texas the gas-powered data center capital of the world. That is not innovation that will turn El Paso into the next Silicon Valley, it is just another giveaway to the fossil fuel industry that puts us on the back end of the AI bubble.”
Adam Powell covers government and politics for the El Paso Times and can be reached via email at apowell@elpasotimes.com.
This article originally appeared on El Paso Times: El Paso city leaders warn of legal costs to stop Meta project
Reporting by Adam Powell, El Paso Times / El Paso Times
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By Adam Powell, El Paso Times | USA TODAY Network
