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Beal’s Project Blue would fund 18‑mile reclaimed line, promise ‘water positivity’ and bring $3.6B initial investment to southeast Tucson
Summary
Developers and City of Tucson officials told a packed Ward 4 meeting that Beal Infrastructure’s Project Blue would pay to extend an 18‑mile reclaimed water line, aim to replenish 100% of the project’s consumptive use, and deliver an initial $3.6 billion phase with about 180 onsite jobs; annexation and development agreements remain pending and subject to public hearings.
Developers for Project Blue told attendees at a Ward 4 community meeting that the proposed data‑center campus would be paid for largely by the private developer and would include an 18‑mile reclaimed‑water pipeline, an aquifer recharge and recreation area and commitments intended to make the project “water positive.” Carrie Sylvan, representing Beal Infrastructure, said the initial phase would be a $3.6 billion capital investment and that Project Blue has committed to replenish “drop for drop” the consumptive use associated with the facility.
The project team said the developer will design and fund the reclaimed pipeline and related recharge infrastructure “at no cost to city taxpayers” and will pay for the reclaimed water and programmatic work that replaces that water. Sylvan said draft contract language includes a water‑positivity charge currently modeled at $750 per acre‑foot and that the developer would both pay standard commercial/industrial rates and an additional water‑positivity rate to finance projects (for example, leak detection, wellhead PFAS treatment, or other augmentation) intended to bring new wet water into Tucson’s portfolio.
City staff and Project Blue described the primary site as industrially designated land near I‑10 and Houghton, north of the fairgrounds and not immediately adjacent to single‑family residences. Mike Jachowski, a senior city project manager, said the property is currently unincorporated Pima County land; the city will initiate annexation and hold a public hearing on Aug. 19, 2025 to begin a roughly one‑year process for signatures and subsequent council consideration. Under state law, he said, the city’s zoning translation must not be more intensive than existing county entitlements.
Project Blue’s economic case for the initial phase includes roughly $1.2 billion in construction and $2.4 billion in equipment, the presentation said, and estimated tax revenue of about $250 million over a stated period (the city’s share for the initial phase was described as roughly $97 million of that total). The team estimated 180 full‑time onsite jobs for the initial phase and thousands of construction jobs over several years; construction activity was described as spanning 7–10 years for full buildout.
On water volumes, staff said the initial phase would use about 440 acre‑feet per year and full buildout about 1,910 acre‑feet per year. Project Blue presenters repeatedly emphasized monitoring: reclaimed water would be measured entering and leaving the site, and the project team said treated reclaimed water would be cleaned for cooling use, recycled multiple times on site and discharged under applicable industrial discharge and county wastewater permits. "Project Blue will be net positive," Sylvan said during the presentation, and later: "We are not creating new water," acknowledging the distinction between acquiring legal water rights and the physical movement of wet water.
City staff said the draft development agreement contains enforcement tools tied to water allocation: higher incremental rates for excess use (150%–200% rate multipliers were discussed), replacement obligations and a liquidated‑damages penalty in the draft (the presentation cited $500,000 as a draft figure for a 10‑year period if average allocations are exceeded). Officials said additional accountability language and absolute caps were being considered in response to public feedback.
The presentation also addressed energy: Project Blue would take service from Tucson Electric Power, pay full retail industrial rates and post a letter of credit and termination fees to cover system costs. The team said the initial phase’s power needs would be met using current capacity plus contracted renewable resources identified through TEP requests for proposals; backup generators on site, the team said, are for emergencies and would be subject to local permitting and monitoring.
Next steps: city staff said a study session is scheduled for Aug. 6, and the annexation public hearing is set for Aug. 19, 2025; any development agreement and zoning actions would return to Mayor and Council for formal consideration following that process. Meanwhile, the Project Blue website and future community meetings will post updated fact sheets and responses to questions collected at the meeting.
