Doña Ana County, located in the Chihuahuan Desert near the US Southern border in New Mexico, traditionally known for its chile pepper farms and New Mexico State University, is now aiming to transform into a major technology hub. County officials are moving forward with plans to capitalize on the artificial intelligence (AI) boom by considering a massive $165 billion debt package and a comprehensive set of tax incentives to establish a sprawling data center campus, dubbed 'Project Jupiter'.

Last week, Doña Ana County commissioners voted four to one to advance a resolution that would provide significant tax breaks for the development. The ambitious plan envisions four AI-oriented data centers, alongside crucial power generation, battery storage, and micro-grid facilities, all to be situated near Santa Teresa, New Mexico.

The financial mechanism behind this project is an industrial revenue bond, a popular economic development tool in New Mexico. It is crucial to note that the $165 billion figure represents the total investment in the project and is not an obligation or debt of Doña Ana County. Instead, the bonds will be purchased by an affiliate or parent company of the developer, meaning the projects will be self-funded and pose no direct financial risk to county taxpayers.

BorderPlex Digital Assets, an Austin-based firm, is facilitating the development in partnership with STACK Infrastructure, a data-center operator owned by Blue Owl Capital, which will be responsible for constructing the facilities. Once built, STACK typically leases out the data center capacity to various technology companies.

The transaction structure involves Doña Ana County acquiring the data-center campus and then leasing it back to the company for the duration of the bonds, up to 30 years. Upon maturity of the debt, the corporation will re-acquire the project. This county ownership model provides key tax advantages: the county's ownership exempts the project from property taxes, and the industrial revenue bond mechanism allows for the purchase of data-center equipment to be free from state sales levies.

Public hearings for the transaction are scheduled for later this month, followed by final votes from the commissioners on the necessary ordinances. If approved, construction is slated to commence this year. In exchange for these tax incentives, the company has committed to paying $300 million to the county in payments-in-lieu-of-taxes (PILOTs) over time. BorderPlex estimates the project will generate approximately 2,500 construction jobs and 750 permanent positions, with an projected $5 billion in construction spending over the next decade.

New Mexico Governor Michelle Lujan Grisham has expressed strong support for the initiative, stating that