RIP Project Blue
The politicians got the message ... Good luck with that tax hike ... And to the moon!
Project Blue started with a roar — promising a massive investment in Tucson’s water infrastructure, the creation of thousands of construction jobs and millions of dollars flowing into government coffers.
It died on Wednesday with a whimper, as every single member of the Tucson City Council denounced the NSA-like secrecy demanded from Amazon Web Services and its proxies, the excessive water usage and their overall lack of trust in the people behind the proposal.
More than 100 residents — many wearing red to show their resistance to Project Blue — cheered as the Council unanimously voted to kill the proposal.
That vote canceled the planned annexation hearing scheduled for August 19 and ensured the item would not return on a future agenda.
The bottom line? Tucson is not for sale.
Here’s the Council in their own words:
Councilwoman Karin Uhlich was the first to openly discuss ending talks with Project Blue at Tuesday’s meeting. Uhlich had already told residents in her midtown ward she wouldn’t support the project.
”The point is that we're not going to consider or approve Project Blue. We are directing the manager and staff to end those negotiations immediately,” Uhlich said.
Councilman Kevin Dahl, who had long opposed the proposed data centers, said he felt misled by the developers when he asked if other cooling options existed for the massive, water-hungry facilities. He said he hoped future proposals would bring jobs and revenue without jeopardizing Tucson’s precious water.
”I remember asking, is water the only way to cool? And I was given, yes, that's the only way we can do it. But they do (use other technologies to cool data centers) elsewhere,” Dahl said.
Councilman Rocque Perez said he’s keeping an eye on the developers’ earlier claims that they planned to stay in Tucson.
“I now urge Pima County and our counterparts in other municipalities, as well as the public that's here today, to pay attention closely as to what happens next. Because data centers aren't going anywhere in this battle. It's just the beginning for Tucson,” he said.
Councilwoman Nikki Lee said the secrecy surrounding Project Blue — and poor communication with the city — badly damaged the proposal’s chances.
“Project Blue represents a lot of things to a lot of people right now, more than just the data center and the project itself. It's a distrust in government, it's a distrust in corporations, it's a very large distrust in tech companies, a distrust in technology and privacy in general, and a fear of artificial intelligence and how fast things are moving and how little control we have and what does it mean for ourselves, society, and for jobs,” she said.
Councilman Paul Cunningham pointed out that the proposal offered no guarantees that Tucson Electric Power wouldn’t pass on future costs to local residents. And he didn't trust the developers, who insisted on hiding behind non-disclosure agreements — and holding elected officials to them — despite Cunningham never signing one personally.
“I'm the most realistic, non-conspiracy theorist guy of all time. But some of these tech bros, some of the things they do is very concerning. So we need to keep our eye on the ball with all that stuff,” he said.
Vice Mayor Lane Santa Cruz said even baristas were talking about Project Blue — a sign that everyone in the community was paying attention. She also raised alarm about how the data centers could be used — calling out those working with the federal government to surveil and detain members of the community.
“These data centers aren't being built to uplift our communities. They're being built to serve private profit and government surveillance. What do we need all this AI for? To store data for ICE? To expand predictive policing? To feed the same systems that already harm our communities,” Santa Cruz said.
Mayor Regina Romero straddled the line between backing the vast majority of her constituents who didn't want Project Blue and business boosters who argue residents are too quick to shoot down economic development opportunities. She acknowledged that while Project Blue is dead, more data center proposals are likely coming.
“We have to understand as a community that this industry is out there and that everyone, including Donald Trump and Congress as well as the state, have incentives and policies to preempt cities like Tucson. So it doesn't end here,” Romero said. “We also have to work together because we can't just say no. What do we want to say yes to? What type of jobs do we want for our residents, for our construction workers and trade workers?”
Romero also blamed the Pima County Board of Supervisors for approving the land sale that set the project in motion.
“The Board of Supervisors and their team also should have stopped this right there,” Romero said.
We reached out to Pima County Supervisor Steve Christy — the highest-ranking elected Republican in the county — who voted to sell the county-owned land to the developers in June.
At the time, Christy acknowledged the project’s fate rested with the Tucson City Council and said he hoped the seven Democrats would support the $3.6 billion economic development deal.
On Wednesday, Christy told the Tucson Agenda that the Council made the wrong call — and that the decision would hurt future economic growth.
“The city of Tucson missed a great opportunity,” Christy said. “It is very disappointing that Pima County will continue in the economic malaise we are globally known for.”
We also asked former Pima County Supervisor Adelita Grijalva — who is widely expected to win her father’s seat in Congress next month — whether she would support the city if the federal government tried to override its decision.
“Land use and water resource decisions should be made by local elected officials in close consultation with the community — not imposed from Washington, D.C. I would oppose any attempt by the federal government to override local decision-making on this project,” Grijalva said.
There was no immediate reaction from any of the principals behind Project Blue on Wednesday, but we expect to hear more soon about their promises of a “Plan B” for Tucson.
Joe has been covering Project Blue for months, and he could really use a beer. This button buys him one.
The Pima County Board of Supervisors wants the Arizona Legislature to end a longstanding tax break for data centers.
Supervisor Jennifer Allen, who opposed the June sale of 290 acres of county-owned land to Project Blue, put the idea on the agenda last week, and a majority of the Board voted to make it part of their lobbyist's to-do list for 2026.
Allen's office estimates that Pima County, the City of Tucson and the state will lose out on about $200 million because state law exempts pricey data-center gear — think racks of cutting-edge servers — from being taxed.
Even so, the county’s lobbyist, Michael Racy, doubts state lawmakers will be eager to close the loophole. (Not to mention, ending the tax cut would require a two-thirds majority vote in each chamber of the Legislature.)
“Since we've got the fastest rate of data center growth in the United States of America, we just might not need this (tax exemption) any longer. Doesn't mean I'm optimistic that we'll be successful in getting it repealed,” Racy told the Board.
Supervisor (and former lawmaker) Andrés Cano, who also voted against selling the county land to Project Blue in June, noted Amazon has routinely fought property tax valuations set by the Pima County Assessor’s Office.
“We know that Amazon is a trillion-dollar company that sues Pima County every year to reduce its property tax obligations,” Cano said. “We have to ensure that from the legislative level, as data centers continue to infiltrate communities across our region, that we are asking corporations to pay their fair share.”
Appealing property taxes is common — entire firms specialize in lowering valuations for clients — but at least one supervisor worries the future data centers will take the county to court over how much tax they should pay once the facilities are up and running.
Supervisor Steve Christy was the lone vote against adding closing the loophole to Pima County's legislative priority list, arguing it might send the message that Pima County isn’t business-friendly.
Don’t tread on my brand: Executives at IndyCar aren’t happy the Trump administration is dubbing their new immigration detention center in Indiana the “Speedway Slammer,” Courthouse News Service reports. The nickname was based on the Indianapolis Motor Speedway and comes after Trump officials flippantly named a detention center in Florida “Alligator Alcatraz.” Homeland Security Secretary Kristi Noem floated Arizona as another state where federal officials are hoping to establish a state-run immigration detention center, but Gov. Katie Hobbs said her office “will not participate,” the Arizona Republic’s David Ulloa Jr reports. Elsewhere in the Trump administration getting in trouble with companies for its mass deportation program, Penske Transportation Services posted on social media that they didn’t want their trucks used by Border Patrol agents, who were seen clambering out of a Penske truck in tactical gear to chase immigrants around a Home Depot parking lot in Los Angeles.
Looking to the horizon: Now that Project Blue is dead in Tucson, the city needs to find a way to get more economic “wins,” Arizona Daily Star columnist Tim Steller writes. The public’s angry response to Project Blue “carries the risk of making us look like we don’t want other new businesses here either. That’s an impression we’re going to have to fight or fix.” To get those wins, Steller urged elected officials to “govern Tucson well” by fixing roads, improving public safety and enforcing codes. At the Tucson Sentinel, columnist Blake Morlock argued the Project Blue proposal never should have made it as far as it did without elected officials first making clear what was at stake.
“A little bit more transparency during the process of discussing the potential deal could've meant a lot less wasted effort, a lot less public turmoil, and maybe a sharper view of what sort of development projects we do want to attract to the region,” Morlock writes.
Finding a workaround: University of Arizona officials say they have found a way to get around at least some of the federal funding cuts for research, KOLD’s Isabela Lisco reports. Researchers at a UA cancer lab are drawing on a new set of grants, known as Bridge Funding Grants, to extend scholarships for graduate students and to keep research going at the cancer lab.
Long time coming: The former co-owner of a day care center in Sonora, Mexico, where 49 children died in a fire in 2009 is in ICE custody in Eloy, KJZZ’s Nina Kravinsky reports. The incident caused widespread outrage in Mexico and Mexican President Claudia Sheinbaum is calling for Sandra Lucia Téllez to be extradited to face charges of homicide and negligent injury.
San Pedro protections: The Center for Biological Diversity is suing state water officials for not protecting groundwater supplies near Benson, including the San Pedro River, KJZZ’s Camryn Sanchez reports. The City of Benson uses groundwater and has the 100-year assured water supply designation from the Arizona Department of Water Resources. But that designation hasn’t been reviewed in 17 years and the lawsuit claims the designation should be revoked due to dropping water levels in the aquifer.
“We're going to get a little out of this world here for a second. So just bear with me.”
When Councilwoman Nikki Lee said that, our ears perked up.
Then she proceeded to explain that data centers should be built in space and insisted it was not “sci-fi” to discuss launching buildings into space.
But then Lee walked through it — the vacuum of space means heat dissipates quickly and there is solar energy 24/7 to power the data centers.
“Right here at the University of Arizona, through a big idea challenge, a project was selected called Making Space for Off Earth Scalable Cloud Computing and Data Infrastructure. So it's not science fiction, it's where this infrastructure can be operated sustainably,” Lee said.
Project Blue, meet Blue Origin, Jeff Bezos's space company. You have a lot of friends in common.
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I think Steve Christy should understand that there is a difference between being business friendly and oligarch, NDA and environmentally destructive friendly.
Yes, potentially data centers could be placed in space but that move would have to overcome many technical hurdles. The world’s first commercially available quantum computer is being made by a company with the stock symbol QBTS. The greater computing power could lessen the size of AI centers.