Huge new data center campus eyed for SE Mesa

Nov. 6—Landowner Pacific Proving LLC has proposed a 178-acre campus east of Legacy Park with six data centers containing 32 data halls totaling 1.4 million square feet of server space.

Pacific Proving's preliminary submission to the Mesa Planning Department calls for 360 megawatts of capacity — putting it well into the "hyperscale" category. For comparison, NTT Global Data Centers' planned Mesa campus will have 240 MW of capacity.

One of the largest landowners in southeast Mesa, Pacific Proving bought the southern 1,800 acres of the former GM Proving Grounds in 2004 and owns the land beneath Legacy Park.

The data campus' project narrative doesn't state the entity that is interested in building and operating the data centers. The attorney who submitted the proposal did not respond to a request for information.

The data campus proposal comes on the heels of an October pre-submittal meeting ahead of a formal application by Amazon Web Services for two separate data campuses on two parcels the company owns on Pecos and Elliot roads, respectively.

Amazon's Pecos Road data center campus is slated to have 454,000 square-feet of data halls spread across 71 acres, to the east of Pacific Proving's data campus project.

The spate of new data center proposals and the scale of the Pacific Proving campus will test the city's tolerance for these projects in industrial parts of Mesa where officials would prefer to see job-intensive advanced manufacturing.

Last month, Mesa officials started expressing concerns about the pace of new data centers coming to Mesa, worrying out loud about the prospect of the industry gobbling up a disproportionate amount of industrial land and resources while adding relatively few jobs to the local economy.

Proponents of data centers says they generate tax revenue and help develop a community's technology workforce with minimal impacts on surrounding neighborhoods from traffic.

Concerned about the relatively small contribution of permanent jobs, outgoing Economic Development Director Bill Jabjiniak asked business leaders last month to help the city brainstorm ways to "slow that train down."

In some ways Mesa is a victim of its own success in this area.

A data center industry expert told the Tribune earlier this year that once a hyperscale project like Meta's Mesa campus moves into a region, other operators are drawn to the area.

In 2021, then-Gov. Doug Ducey signed a bill extending tax incentives for data centers another 10 years.

Most of the 178-acre site owned by Pacific Proving is currently outside Mesa city limits in Maricopa County jurisdiction, so the landowner is requesting annexation into the City of Mesa as well as rezoning to Light Industrial with a Planned Area Development overlay.

In many areas in southeast Mesa, data centers are allowed by right under existing Light Industrial zoning — part of what scares city leaders about the surge in demand.

But Pacific Proving's annexation request will give the city additional leverage, something District 6 Councilman Scott Somers referenced in a statement to the Tribune.

"Southeast Mesa has more than its fair share of data centers. Electricity, water and land are limited and we don't want to become oversaturated by a single sector that uses a lot of resources while producing few jobs," he said.

"This project requires annexation and rezoning," he added. "We have a need for more job intensive uses to achieve our vision of making the Gateway area a hub for high-wage, high-value jobs."

City leaders want to see Mesa's industrial land used to make "things," like medical devices and electric vehicles.

Mesa's manufacturing and technology scene has momentum currently.

High-tech HVAC firm Xnrgy announced a plant and headquarters near the Gateway Airport; solar equipment maker Amphenol Industrial Operations announced a Mesa plant in September; and last month, CMC Steel Arizona celebrated the opening of a new micro steel mill at its Mesa campus.

But at the same time, demand for data center services is exploding as the use of artificial intelligence and internet-enabled devices grows, giving the industry an edge during times when borrowing money for business expansions is costlier.

In September, the owner of Utah's largest data center was the only comer willing to meet the $62.7 million minimum bid set by the Arizona Land Department in an auction for 165 acres near Elliot and Warner roads.

A 2022 report by real estate firm CBRE found that vacancy rates for data centers nationally was a record low 3.8%, and in 2022, operators purchased or leased three times as much available data center space than in the prior year.

Demand for data center space seems to have only grown since last year.

Pacific Proving's pre-submittal meeting for the Pecos data center campus is scheduled for Nov. 7.