Casa Grande staff recommends property-specific Prop 207 waiver to resolve data‑center claim

Casa Grande city staff told the City Council at a study session that negotiating a property‑specific waiver under Arizona's Proposition 207 is the preferred way to resolve a notice of claim from landowners who say a new zoning requirement for data centers reduced their property value.

Larry, a city staff member who presented the briefing, said the owners filed a Proposition 207 notice in February 2026 seeking approximately $140,000,000 in aggregate (roughly $70,000,000 per major holding). "That number is the claimants' projection of the devaluation," Larry said, adding that staff had not verified the figure. He told the council the city could repeal the ordinance, pay compensation, deny and defend the claim in court, or pursue a property‑specific waiver; staff does not recommend repeal or direct payment because of the likely fiscal impact and litigation risk.

Why it matters: the city adopted an ordinance in October 2025 requiring future data‑center projects to obtain a conditional use permit so each proposal can be reviewed case by case for water, power, noise and other impacts. Staff told the council that a negotiated waiver applying only to the parcels in the claim could include binding operational restrictions similar to conditions the city would otherwise impose through a CUP, while preserving the ordinance for future projects.

"We believe that pursuing a binding waiver with operational restrictions provides the best balance between protecting the city's legal and financial interest, while maintaining the council's long‑term policy for future data center development," Larry said.

Council members questioned how other Arizona cities handle Prop 207 claims. Larry answered that the statute applies statewide, some municipalities use administrative waiver processes, and municipal approaches vary; he noted Phoenix has seen multiple Prop 207 claims. A council member who asked about administrative handling was identified in the record as Council member Herman.

The presentation included preliminary economic figures staff said would be refined: Larry said staff estimated a hypothetical build on the roughly 480 acres under discussion could produce about $6,000,000 a year in primary property tax revenue to the city, about $23,900,000 to Pinal County school and special districts, and about $4,500,000 to the state. He prefaced those numbers by saying staff had not brought full supporting data to the study session and that more detailed analysis would be provided at the Aug. 3 meeting.

Council members who spoke at the session—including Matt, Anthony and Bob—praised holding an informational study session rather than placing the matter on consent and stressed the need for transparency and conditions that address water, power and noise. Matt said the council's goal was transparency and that negotiations and public input were important for such a consequential claim.

Next steps: staff said final waiver terms were expected to be available for the mayor and council's consideration at the regular meeting on Aug. 3; the presentation materials and an Engage Casa Grande webpage with FAQs and a comment function were posted so residents could review information and submit comments. Larry also said council would meet in executive session later that night to continue negotiations. The city provided an email (piopio@casagrandeaz.gov) for written comments and said members of the public will be allowed to speak at the Aug. 3 meeting when the topic returns for formal action.

No formal motions or votes were taken at the study session. The council will have the opportunity to consider staff's recommendation and any proposed waiver terms at the scheduled Aug. 3 meeting.