Microsoft
Microsoft PHX 10-11 campus (Project 10-11), 279 acres between Broadway Road and MC-85; Third Amendment to the Infrastructure Development Agreement for Project 10-11 (IDA recorded June 27, 2019, Maricopa County no. 2019-0486224), approved by Resolution No. 2023-2295
development agreement, approved, approved 2023-03-06
Operator: Microsoft
Developer: Microsoft Corporation
Scale: 279 acres · 790,000 sq ft
Verification: read from the signed document
A strong version: A fund that scales with the project, with a community seat on the body that spends it
Not addressed in the agreement.
No community fund. Before the Phase Three (PHX 12) building permit, Microsoft deposits $800,000 with the City to pay a City-retained designated representative who coordinates Microsoft's PHX 10-11 and PHX-70 projects for two years; unused funds are returned and any excess cost is invoiced to Microsoft (Sec. 6.3.5 and new Sec. 33).
A strong version: Incentives come back if the facility stops operating, not only if a jobs number is missed
Not applicable to this deal.
No public incentive to claw back; the money flows from Microsoft to the City. The $36M in-lieu payment is trued up in both directions after the updated Carollo study (Sec. 6.3.3). Remedies for non-performance are permit and certificate-of-occupancy holds (Secs. 6.3.6-6.3.11, 16.2), $5,000 per day for discharges over 500,000 gpd and $10,000 per day for discharges through the old line after the deadline, plus water shut-off after five days of violation (Secs. 6.4.7-6.4.8), and a 30-business-day cure period before default (new Sec. 31).
A strong version: A bond, escrow, or letter of credit that pays for teardown and site restoration if the operator walks
Not addressed in the agreement.
instrument: none
No decommissioning, restoration, or end-of-life obligation in the Third Amendment; none found in the 2019 IDA or the 2019 self-certification agreement. Off-site infrastructure is dedicated to the City with a two-year warranty (Sec. 16.3).
A strong version: The operator pays for its own interconnection and carries a minimum bill that survives it leaving
Not addressed in the agreement.
interconnect paid by: unknown
The agreement covers water and wastewater only; electricity is not addressed. Microsoft announced in 2019 that it contracted output from First Solar's 150 MW Sun Streams 2 plant for its Arizona campuses. Substation and transmission cost allocation with the utility is unknown.
A strong version: A stated cap or closed-loop cooling, plus public reporting
cap: 5,000,000 gal/day · reporting: yes · recycling required: no · cooling: mixed
The City's obligation to serve up to 5 MGD of potable water applies only to data center use (Sec. 5.1; original IDA planned five water-cooled buildings at no more than 1 MGD each). Only Phases One to Three (PHX 10, 11, 12; about 290,000, 250,000, and 250,000 sq ft) may use direct evaporative cooling; all later buildings must use air-cooled chillers (Recital E, Secs. 2.11, 5.1). Before the PHX 12 permit Microsoft pays a $36,000,000 in-lieu payment toward the City's programmed $90,000,000 expansion of the 157th Ave. wastewater plant (3,000,000 gpd added; Microsoft needs 1,200,000 gpd at full build-out), trued up after an updated engineering study; wastewater impact fees for the plant are waived and those already collected are refunded (Sec. 6.3.3). Microsoft deposits $5,000,000 as financial assurance for a dedicated discharge line (about 12,000 linear feet) and water lines, escrowed against an engineer's estimate (Sec. 6.3.4), and must finish the line by August 31, 2024 (Sec. 6.3.6). Until the plant expands, discharge is capped at 500,000 gpd with TDS temporarily raised to 2,853 mg/L; afterward TDS may not exceed the greater of 1,400 mg/L or double the incoming water (Secs. 6.4.3, 6.4.5). Microsoft installs flow meters and the City installs its own with real-time electronic access (Sec. 6.4.4). A Water Resources Fee applies if full build-out demand exceeds Microsoft's Type 1 grandfathered right, waived only if 50 percent of potable water is returned as treated discharge usable as raw water; the 2019 plan to treat discharge for the City's surface-water plant was abandoned (Recital I, Secs. 5.8, 6.3.12). Water is billed at the commercial large-user rate of $10.19 per thousand gallons, CPI-adjusted (Sec. 17.8.3). The Atlantic's Karen Hao found a pre-construction estimate of about 56 million gallons a year at full build-out in a publicly available document Microsoft supplied to the City, after the City's records response redacted water figures as proprietary.
A strong version: A numeric limit measured at the nearest residence or property line
Not addressed in the agreement.
No noise term. Goodyear's code section 11-1-8 uses an unreasonably-loud standard with no decibel limits. The amendment does extend the berming and landscaping mitigation on the east and west property lines 100 feet north of the northern boundary before PHX 12 occupancy (Sec. 6.3.13).
A strong version: Binding job commitments with a consequence, not projections
Not addressed in the agreement.
permanent: 100 · construction: 1000 · enforceable: no
The agreement contains no jobs term. Microsoft's July 30, 2019 announcement projected more than 100 permanent and more than 1,000 construction jobs across its Goodyear and El Mirage campuses combined. Microsoft's counsel told council each building represents more than a $300 million investment.
A strong version: Local subcontracting goals and haul-route road repair paid by the operator
Not addressed in the agreement.
infrastructure: $36,000,000
No local-contracting or haul-route term. Microsoft designs and builds all on-site and off-site water and wastewater infrastructure at its sole cost, acquires easements, and dedicates off-site work to the City (Secs. 5.3, 13.2, 16.3); the $36M in-lieu payment replaces wastewater impact fees rather than adding to them.
A strong version: No NDA, the agreement is public, and an independent audit on a schedule
agreement public: yes · dashboard: no
The full Third Amendment (executed by Microsoft CVP Aditya Dalmia on February 27, 2023; City signature blank in the packet) is in the public March 6, 2023 agenda packet, and the 2019 agreements are on the City's Legistar. The City's own action report records that Microsoft had not built the TDS-treatment, storage, and discharge-control improvements that were conditions of PHX 11's certificate of occupancy, and that the amendment supplied a temporary fix. When The Atlantic requested water-use records in 2023-24 the City produced documents with the figures blacked out as proprietary to Microsoft; the 56 million gallon estimate came from a footnoted pre-construction document. The 2019 self-certification agreement let Microsoft start two buildings before re-platting or site plan approval. The City's recorded copy of the Third Amendment and its execution date were not located.
A strong version: A but-for test before any abatement, with the forgone revenue stated
Not applicable to this deal.
No city abatement or PILOT. The City stops charging the 157th Ave. plant's share of wastewater impact fees and refunds those collected, in exchange for the $36M in-lieu payment (Sec. 6.3.3); all other impact fees remain payable (Sec. 5.7). Arizona's Computer Data Center program (A.R.S. 41-1519) exempts certified data center equipment from state, county, and city transaction privilege and use tax for ten full calendar years after certification (twenty for a sustainable redevelopment project), with a $50M minimum investment in Maricopa County; whether Microsoft certified this campus is unknown.
The Atlantic reported in March 2024 that the campus would use about 56 million gallons of drinking water a year at full build-out, a figure the City had redacted from public records as proprietary to Microsoft. source
The City's March 6, 2023 action report states Microsoft sought a permanent certificate of occupancy for its second building without having built the TDS treatment, storage, and discharge-control improvements that were conditions of occupancy, and that the existing Broadway Road sewer was never intended to carry its industrial discharge. source
The February 25, 2019 development agreement (Resolution 2019-1942) let Microsoft build its first two buildings through a self-certification process before re-platting or site plan approval, with Microsoft bearing the risk of rework. source