BlackRock joins Meta’s El Paso Data Center project: What it means for city agreements and taxpayers
UPDATE (5:34 PM) - The City of El Paso has released the following statement regarding the financial partnership with BlackRock and Meta:
The City Attorney's Office has reviewed the City's agreements with Wurldwide in light of Meta's public announcement and the information that has been publicly released regarding the proposed transaction. The City was not provided the terms of the proposed transaction before Meta's public announcement. Based on our review of the City's agreements and the publicly available information, our preliminary analysis is that the proposed transaction does not currently appear to trigger the assignment provisions of the City's agreements.
The City will continue to review any additional information that becomes available to ensure all contractual obligations to the City continue to be met.
District 2 City Council Representative Josh Acevedo said he didn't know about Meta's partnership with BlackRock until Meta's press release Tuesday.
"I found out reading the news and there was no sense that from my understanding, that Meta reached out to any member of council. So I don't think they even reached out to city officials. And they have such a large contract that, you know, again, they just don't care. They have all the power," Rep. Acevedo said.
El Paso Mayor Renard Johnson says he didn't know either.
"I wasn't personally notified about the transaction that they did, the 80%/20%. I know they did reach out to my chief of staff and made her aware that they were working on something, but we were made aware of it at the same time you guys were yesterday," Mayor Johnson said in an interview.
Section 10 of Meta's 380 agreement with the City outlines four processes under transfers:
10.1 Affiliates and Future Owners or Lessees.
Approved Company may at any time assign, transfer or otherwise convey any of its
rights or obligations under this Agreement, in whole or in part, to an Affiliate,
future owner of all or a portion of the Land or lessee of all or a portion of the
Land or Project Improvements without the consent of the City, but upon written
notice to the City ( and upon such assignment the assigning entity shall be relieved
of its covenants, commitments and obligations hereunder to the extent of the
rights and obligations so assigned).
10.2 Collateral Assianment.
Company may assign its rights and obligations under this Agreement, in
whole or in part, to a financial institution or other lender for purposes of granting
a Mortgage in the Land and/or improvements thereon without the consent of the
City, but upon written notice to the City.
10.3 Sale/Leaseback._
So long as Company or an Affiliate to which this Agreement has been
assigned remains a lessee, or its substantial equivalent, Company may transfer fee
simple title to the Land to a third party and continue to exercise its rights and
obligations under this Agreement, including but not limited to the rights to receive
Property Tax Grants hereunder, and may choose to retain its rights and
obligations under this Agreement (in lieu of an assignment).
10.4 Other Assignment.
Except as otherwise provided by Sections 10.1, 10.2 and 10.3 herein,
Company may not assign, transfer or otherwise convey any of its rights or
obligations under this Agreement to any other person or entity without the consent
of the City Council, which consent shall not be unreasonably withheld, conditioned
or delayed, but conditioned on: (i) the prior approval of the assignee or successor
and finding by the City Council that the proposed assignee or successor is
financially capable of meeting the terms and conditions of this Agreement and (ii)
prior execution by the proposed assignee or successor of a written agreement with
the City under which the proposed assignee or successor agrees to assume and be
bound by all covenants and obligations of Company under this Agreement. Any
attempted assignment other than an assignment pursuant to Sections 10.1, 10.2 or
10.3 without the City Council's prior consent shall constitute grounds for
termination of this Agreement following ten (10) calendar days after receipt of
written notice from the City to Company (provided that the City shall only be
entitled to send such termination notice after Company's failure to cure within the
cure period set forth in Section 6.9 herein). Any permitted assignee or successor in
interest of Company of rights and/or obligations under this Agreement shall be
deemed "Company" for all purposes under this Agreement.
Veronica Carbajal, Sembrando Esperanza Coalition, said she thinks more checks on data centers across the country are forcing data centers like Meta to find funds elsewhere.
"As more and more of us say no to AI and stop using AI, you know, in our lives and in our companies, that is also going to impact the industry," Carbajal said.
EL PASO, Texas (KVIA) – Tuesday, Meta released a statement saying they are entering a financial partnership with BlackRock for the El Paso data center.
The partnership gives BlackRock 80% interest while Meta retains 20% ownership.
A spokesperson from Meta says the partnership with BlackRock won't have an impact on the day-to-day operations or Meta's commitment to El Paso. They say BlackRock will only be providing funding.
ABC-7 has reached out to City Attorney Karla Nieman about if the City received written notice of the partnership as required by Section 10 of the 380 Economic Development Program Agreement and how it impacts the standing Community Benefit Agreement with Meta.
This is a developing story, check back later for updates.
