Last month, the Doña County Board of Commissioners voted to approve Project Jupiter, which if completed as projected would be the largest data center in the country. The project is supposed to be a warehouse for emerging artificial intelligence (AI) servers. Although the project is benefiting from government tax incentives, the Doña Ana taxpayers are not helping to fund the project, and the county does not have liability of the project fails.
Nonetheless, because the project uses New Mexico industrial revenue bonds (IRBs) to help fund its development, the Doña Ana Board of Commissioners had to publicly approve the project so that the county could temporarily own the development to allow it to use the incentives the IRBs provide for the investors. The incentives provide access to tax free investment money.
Community members in Las Cruces and El Paso were alerted to the project because of the public scrutiny in voting to approve the $165 billion in IRBs. Questions arose about the project because in recent years datacenters have become controversial because of their use of electricity and water, as well as complaints about noise pollution they generate every day.
On September 30, the commissioners approved the project after listening to hours of complaints by opponents arguing about electricity and water usage, on a vote of four-to-one. Unless the project is stopped by November 14, the IRBs will kick in.
Even though the IRBs cannot be issued until after November 15, construction seems to have begun, according to KTSM’s report last Friday.
But the report sourced to the Border Report contains an important inaccuracy for public policy. The Border Report is a Nexstar Media Group project focused on reporting along the U.S.-México border. Its news reporters share their news reports among Nexstar affiliated news outlets, like KTSM.
Friday’s report on the Project Jupiter datacenter reports that the datacenter project will “bring more than 3,000 permanent and temporary jobs to Southern New Mexico and West Texas.” The report cites “local experts” for the figure. The number is somewhat accurate, but it leaves important context out. It reads more like marketing language than a news report. As will be observed, the number comes from marketing materials.
The news report goes on to quote Jerry Pacheco about how important the project is for the borderland communities. Pacheco is the executive director of International Business Accelerator. The Accelerator’s function is to promote businesses to fill New Mexico jobs. It shows success by the job growth in its target market even if the jobs are short term.
Many of Pacheco’s assertions are misleading or inaccurately explain the technology the proposed datacenter is supposed to enable. However, those inaccuracies are marketing language intended to bolster support for the project and are outside of the scope of public policy issues the job numbers represent.
The assertion that the project will “bring more than 3,000 permanent and temporary jobs to Southern New Mexico and West Texas,” which includes El Paso requires some scrutiny.
Misleading 3,000 Jobs
Because the project involves Doña County, the taxpayers expect a reason for the involvement of their governmental body. Delivering new jobs serves that purpose and helps align the project with the ISB’s purpose of economic development. Border Report nor Pacheco address the 3,000-job figure except to state that the project will “bring” them. The jobs language also helps to distract from the other issues of electricity, water and noise pollution that some Santa Teresa residents are concerned about.
The likely source for the number is the marketing material put out by the developers of the project who address the controversies about electricity and water usage as well as other concerns.
By referring to developer’s Application for Industrial Revenue Bond Financing filed on August 15 with the state, it can readily be observed that the promised 3,000 jobs are temporary.
The domain name used by the project was created less than 20 days before the vote by the Doña Ana Board of County Commissioners at around the time that the public began to scrutinize the project.
According to the application, there are two entities that will be offering jobs. The first one, labeled as “Entity A,” anticipates having 30 full- and part-time jobs in year one, and 50 jobs for each in years two and three. In other words, Entity A will hire 60 full- and part-time employees and 50 of each in years two and three for a total of 50 full-time jobs and 50 part-time jobs for the first three years. It also states that it will hire 500 construction workers for two years.
The second entity, “Entity B and C (consolidated),” likewise breaks down its job offerings for the first three year. They write that they will hire 150 full-time workers in year one, 350 in year two and 700 in year three. They also state that they will contract “about” 2,000 full-time constructions workers for two years.
The important thing to note is that the Doña Ana County will “own” the datacenter for 30-years to help the developers secure lower-cost investments but the job offerings in return are, at most 2,500 construction jobs for two-years and 750 full-time technical jobs for three years. The application makes no mention of the job situation after year three. The development is creating infrastructure around AI, which by definition seeks to automate as much work as possible to lower labor costs in the future.
As such, to argue that Project Jupiter will deliver “more than 3,000 permanent and temporary jobs,” is disingenuous considering that Doña Ana County is using 30-year IRB’s, a tool to foster economic development for less than 700 high-tech jobs, at most, over the long term.
There is no guarantee that the development will generate significant economic development through the 30-year cycle the county has committed to.
The application states that the development “aims to enhance regional technology capabilities” and “create high-quality jobs,” but it adds the caveat that they will be “adhering to best practices in sustainability and operational efficiency.” The rise in automation relieves the need for labor.
The job misinformation does not address the other issues of the use of electricity and water, not to mention pollutants, that the opponents have pointed to. At best, the development can generate 700 jobs for 30 years. Is that a wise investment for Doña Ana County?