Tax break; water deal for Meta Data Center

LOS LUNAS — The Los Lunas Meta Data Center has its sights set on expansion, which will be assisted through an industrial revenue bond (IRB) ordinance recently approved by the Los Lunas Village Council.

“(The ordinance) allows for the opportunity to provide certain tax incentives for the company, to encourage them to continue with their expansion project here in the village, and continue doing what they’re doing as a community partner,” said the village’s bond attorney Jill Sweeney at the Feb. 13 council meeting.

The expansion is set to include two new data center facilities to support current products and enable future generations of AI (artificial intelligence) hardware at the Los Lunas data center.

Sweeney explained the ordinance authorizes the issuance and the sale of IRBs for the benefit of Greater Kudu LLC, a subsidiary of Meta, who submitted the IRB application. An IRB is essentially a tax break for companies that plan to expand by way of construction and equipping of a future project.

“The bonds are to be issued in up to six series in the principal amount not to exceed $7.5 billion each,” Sweeney said. “This is a tax abatement process to assist the company in the development and the creation of the jobs in the community, and there are job requirements listed in the lease. What those zeros represent is the number of dollars that the company intends to invest in the community.”

Sweeney confirmed it would not be a debt of the village, as the village would not be providing money to the company.

“The bonds will be issued for the purpose of inducing Greater Kudu LLC to expand its existing data center to include next-generation data center facilities …providing for the payment of the principal of and interest on the bonds from lease payments to be paid by Greater Kudu LLC to the village; and providing for the execution and delivery of an indenture, a lease agreement and a bond purchase agreement,” the ordinance reads.

Community support

During the meeting, Rhona Espinoza, executive director of the Greater Valencia County Chamber of Commerce, shared support for the project on behalf of GVCCC.

“I speak for the business community as the chamber director and also community partners, nonprofits and the municipalities that I represent,” said Espinoza. “We extend our heartfelt gratitude to Meta for their commitment to our community. Their generous sponsorships have made an indelible impact on numerous nonprofit organizations, youth groups and municipalities across Valencia County.”

Since 2019, Meta has awarded more than $4.9 million in funding to local organizations through their annual Data Center Community Action Grants program for projects that put the power of technology to use for community benefit.

“Their generosity and dedication have touched countless lives and have set an inspiring example of what it means to be a true community partner,” said Espinoza. “We look forward to continuing this fruitful partnership and witnessing the ongoing positive impact of Meta sponsorships in Valencia County.”

Los Lunas Schools media and marketing specialist Sidney Olivas also shared support for Meta on behalf of LLS during the meeting.

“Meta’s commitment to enhancing our educational environment has made a significant impact on our students and staff by providing access to advanced technology and STEM resources,” said Olivas. “I have the privilege of going from school site to school site, where I’ve seen these hands-on experiments and projects take place, and they really have made a huge difference in the classrooms.”

Los Lunas Mayor Charles Griego agreed Meta’s presence “will benefit our community for years to come,” and the council then unanimously voted in approval of the IRB ordinance. Sweeney said adoption of the ordinance would be published and move towards closing in late March.

Amended water agreement

During the same meeting, the council also unanimously approved an updated water agreement with the Los Lunas Meta Data Center.

“There is not going to be any increase of water beyond what they’ve already been committed to by the village,” said Los Lunas Public Works Director Michael Jaramillo.“This agreement ensures that they cannot exceed the existing amount that we’ve agreed upon, and that there’s a reporting process to ensure that they’re not going to exceed the water (allocated).”

The village’s legal counsel Larry Guggino outlined the previous agreement allowed the data center to consume up to 500 acre feet, almost 163 million gallons, of water per year. This amount would stay the same through the amended agreement.

In the amended agreement, the amount of water guaranteed to the data center in the worst case scenario for the entire campus has been lowered, said Guggino, from up to 4 1/2 million gallons a day, if it were really hot, down to 3 million gallons a day.

If there was an emergency, such as a water shortage, the previous agreement gave some priority to the data center, but in the new agreement “they’re in line with every other industrial user.”

Also different in this agreement, as opposed to the last agreement, is in the worst case scenario, there were no limits as to the number of days that the water could be used if it was really hot.

“In this one, we guaranteed them that we can provide them up to 3 million gallons of water a day for up to five days,” said Guggino. “The agreement also has some language where we can actually amend it to a lesser amount, if it looks like they’re using less water, and that’s the trend.”

“I think you’ve done a good job of protecting the village, and to ensure that their business can continue,” said Los Lunas Village Councilor James Runyon of the amended agreement, which the council then unanimously voted in approval of.

Meta sustainability initiatives

At the Jan. 16 council meeting, Los Lunas Meta Data Center community development manager David Williams shared an update on the data center, as well as their sustainability initiatives.

“Our Los Lunas campus is the seventh global data center and is probably in the top five of the largest campuses,” said Williams. “At peak, which we continue to see today, we’ve employed over 1,100 construction workers, and, currently, we support over 180 operational roles and anticipate supporting over 400 at full build out.”

Williams said the Los Lunas data center’s electricity use is matched with 100 percent renewable energy, and that they continuously innovate to make their data centers more water efficient.

“Our campus in Los Lunas utilizes water primarily for evaporative cooling and humidification. Our advanced cooling system maintains optimal temperatures in our data halls, while our humidification process ensures the right levels,” he explained.

Williams said water used in the cooling system is recycled multiple times before being discharged to the village’s wastewater system.

“Our design has been regarded for its highly-efficient cooling tech, allowing us to use outside air for cooling most days, drastically reducing water usage,” he said. “On typical days, no water is used to cool our servers, even on hot summer days, water isn’t needed when temperatures are below 85 degrees.”

Currently, there are 10 buildings that are operational or in construction at Meta’s Los Lunas campus, which sits on a 750 acre parcel of land. Echoing the terms of the amended water agreement, Williams confirmed they are committed to working within their existing water rights and using water efficiently.

“We will not be asking for any additional water,” he said. “Currently, we are using about 60 percent of our allotted water use here on the top end, with our operational buildings. As our other sites come online, they’ll use a little bit more water, but everything has actually been working well below current agreements.”

Williams added that Meta is working with local environmental nonprofits and organizations on water restoration projects located in the same watersheds as their data centers. Throughout the Rio Grande watershed, he said Meta has invested in seven water restoration projects which together will restore 194 million gallons annually.

“It’s nice to hear companies being proactive to solve this problem,” said Runyon. “I think that a lot of other companies around can probably learn a few things. Thank you for being a good partner and neighbor in the community.”