El Paso officials say city can’t cancel Meta data center deal
El Paso city officials assert that the municipal government cannot legally rescind a tax break agreement granted to Meta Platforms, Inc. for its data center project, despite a city council representative's efforts to terminate the deal. They warn that breaking the legally binding agreements would likely result in significant legal challenges and financial liability for taxpayers. Public opposition to the data center is centered on concerns about water usage, air pollution from a dedicated gas-fired power plant, and the adequacy of promised job creation.
El Paso city officials, including City Manager Dionne Mack and City Attorney Karla Nieman, have publicly stated that the city is legally unable to cancel an economic development agreement with Meta Platforms, Inc. for a data center. This announcement comes after City Representative Josh Acevedo called for a June 9 City Council vote to direct staff to negotiate the termination of the Chapter 380 Economic Development Program Agreement and related incentive agreements with Meta and Wurldwide LLC.
The officials emphasized that the project was approved through legally binding agreements in December 2023. They warned that any unilateral attempt to terminate these agreements without contractual cause would likely lead to significant legal challenges, expose El Paso taxpayers to substantial financial liability, and potentially damage the city's reputation for honoring business commitments. Mayor Renard Johnson supported this stance, noting his veto power over City Council actions.
Representative Acevedo, whose district encompasses parts of South and Central El Paso, stated that his motivation to cancel the deal stems from "significant public concern" regarding utility affordability, water resources, environmental impacts, and infrastructure burdens. Opponents of the data center, which includes a dedicated 366-megawatt natural gas plant built by El Paso Electric in partnership with Enchanted Rock, argue it will consume excessive groundwater (permitted for up to 1.5 million gallons per day, though estimated actual usage is 400,000 gallons per day), contribute to air pollution, and create insufficient jobs to justify the tax breaks. The facility is projected to increase the city's greenhouse gas emissions, contradicting El Paso's recently adopted climate action plan.
The existing agreement provides Meta with an 80% property tax break for decades and $12.5 million for road infrastructure improvements. Meta has committed to investing $10 billion and hiring 300 workers, exceeding the agreement's minimums. The first phase of the data center is expected to commence operations next month. Acevedo's proposal, co-sponsored by City Rep. Lily Límon, aims to explore the city's legal and policy options to renegotiate or terminate the deal, acknowledging it would be a "massive process" involving extensive staff research and multiple council discussions.