The Mesa City Council held a study session on June 26, 2025, focusing on the economic implications of data centers in the city. Council members discussed the significant tax exemptions that data centers receive, which impact the city’s revenue from sales and property taxes.

Leanne, a city official, highlighted that the equipment used in data centers is purchased tax-exempt, meaning the city misses out on substantial tax revenue. This situation raises concerns as Mesa relies heavily on sales tax for funding essential services. The council noted that while data centers contribute to the local economy, they do not provide enough jobs or tax revenue to justify the extensive land they occupy. Mesa has a high concentration of data centers, with 15 out of 60 in Arizona, but the economic return is limited, with only one job created per acre.

Jay, another council member, emphasized the need for a strategic approach to land use, advocating for projects that yield higher job density and economic benefits. He pointed out that existing employers in Southeast Mesa occupy significantly less land while providing nearly 3,000 jobs, contrasting sharply with the data center model.

The council plans to develop a new strategic plan for economic development in the upcoming fiscal year, aiming to attract high-quality jobs and diversify the local economy. They also intend to enhance retail attraction strategies to meet community needs and preferences.

Overall, the discussions underscored the importance of balancing land use with economic returns, as the city navigates its future development strategies amidst growing competition for resources and jobs.