Project Jupiter bond agreements are still changing

Note: Project Jupiter agreements — original versions, versions as they existed when the Doña Ana County Board of Commissioners voted at their Sept. 19 meeting, and the newest versions released by county officials — are listed at the end of this article, with links.

Project Jupiter’s bond financing is heading toward a final closing date later this week, but the agreements Doña Ana County commissioners approved that authorize that money are still in flux.

Just over a month after she cast the only vote against approving the $165 billion bond package, Commissioner Susana Chaparro has concerns about that.

“Even at this point, changes are being made without the entire commission voting on these changes,” she said. “That does not align with how I feel this process should go forward.”

Commissioners voted 4-1 on Sept. 19 to authorize the bond agreements, which provide property tax breaks to the developers through a complex funding mechanism. The developers plan to spend $165 billion for construction of the massive campus of data centers, their own power plant, and refreshes of technology in those facilities to keep them operational for 30 years.

With their votes, commissioners also gave Chair Christopher Schaljo-Hernandez the power to sign off on final versions of about a dozen documents, including lease agreements.

In other words, the other four commissioners handed off their role in approval to one commissioner.

The N.M. Foundation for Open Government has a problem with that.

“That is making policy behind closed doors, and that is not government transparency. That is not something that is in the best interest of New Mexicans,” said Christine Barber, the organization’s executive director. “…If it doesn’t violate the Open Meetings Act, it violates the spirit of it.”

The state’s Open Meetings Act requires that policymaking bodies deliberate and decide most public business in public.

Meanwhile, the nonprofit Empowerment Congress of Doña Ana County, which has been lobbying against Project Jupiter, and two residents, José Saldaña Jr. of Sunland Park and Vivian Fuller of Santa Teresa, filed a lawsuit Friday alleging that the county’s approval of tax incentives for Project Jupiter didn’t follow the law. They’re requesting that a judge vacate those approvals, which could halt the project.

Broad authority

Regardless, the county is moving forward with finalizing the agreements. The Sept. 19 bond resolution requires another commission vote if any changes conflict with what commissioners approved that day, but otherwise Schaljo-Hernandez has broad authority to OK new language and the addition or deletion of provisions in the agreements on his own.

For example, Schaljo-Hernandez can approve changes to language about the promises made by the developers of Project Jupiter, including reducing water use by using a closed-loop system to cool electronics at the data centers, a cap on water use of 60,000 gallons per day, and several million dollars in donations for community priorities.

As I reported last week, such promises were included in drafts of legally binding lease agreements that the commission approved in September. But newer versions of the leases, which county Economic Development Director Denisse Carter provided me Thursday in response to a records request, did not include those provisions. They had been moved to a memorandum of understanding that does not appear to be legally binding.

Apparently that wasn’t the final word, however. Schaljo-Hernandez provided me a new version of one of the leases on Monday and a separate “community benefits agreement,” a brand new document that includes many of the developers’ promises.

That agreement with several of the companies involved in Project Jupiter states that it is “binding on each of the parties.” In addition, the lease agreement with the company Yucca Growth Infrastructure, which is building Project Jupiter’s microgrid, states that the company “shall timely comply with its obligations pursuant to the Community Benefits Agreement.”

New agreement ‘covers all the bases’

Schaljo-Hernandez said in an interview that he has been working with the county’s bond attorneys and staff to ensure the developers’ promises are legally binding. He said the newest agreement accomplishes that, and specifically mentioned the pledges related to the closed-loop system and water use.

“It covers all the bases. It looks a lot better than it did,” Schaljo-Hernandez said.

As for the concerns about transparency, the commission chair said he isn’t making policy or approving substantial changes. He said he’s simply ensuring that what commissioners voted to approve last month is what gets finalized.

“Nothing has changed,” Schaljo-Hernandez said. “…All those things that were discussed at the September meeting in open session are the things I’m looking for in this agreement.”

Thursday is the scheduled closing date for the bond agreements, Schaljo-Hernandez said.

How we got here

A confluence of factors have led to one commissioner having final approval on bond agreements that green-light such a gigantic project:

• The developers required nondisclosure agreements and pressured the county to move quickly with a threat that they’d go elsewhere if there were delays. That shortened the time commissioners and the public had to learn about and comment on the project.

• Negotiations on some details of the agreements were ongoing leading into the commission’s Sept. 19 meeting. That was at least in part because Commissioner Manuel Sanchez was pushing for changes to make some of the developers’ promises legally binding.

• While the county released versions of the agreements before the Sept. 19 meeting, they did not share updated versions with the public as they continued to change those documents. The public didn’t know what was being voted on that day, and Chaparro has said she didn’t either. Many of the documents, including the official bond ordinance I received from the county clerk after it had been signed, were labeled as drafts when commissioners voted.

• And a county ordinance allows the commission to authorize its chair, or in their absence the vice chair, “to sign documents on behalf of and as authorized by the Board.” That ordinance was likely intended for routine financial transactions that require a closing period after a commission vote.

The bond ordinance commissioners approved in September gave such authorization to Schaljo-Hernandez. “The Chair and Vice Chair of the Commission are each authorized to approve the final form, terms and provisions of the Bond Documents on behalf of the Commission,” it states.

Any changes, it adds, must be “consistent” with the bond ordinance or approved in a second resolution by a vote of the county commission.

‘Done representing their constituents’

State Sen. Jeff Steinborn, a Las Cruces Democrat who is pushing for negotiations on the power generation plan for Project Jupiter, said the fact that commissioners voted to approve agreements “with missing pages” is more concerning to him than the vote to give final approval to Schaljo-Hernandez.

“The biggest issue in terms of transparency is that they approved an agreement that wasn’t complete,” he said. “This is not a minor transaction. This has significant ramifications for the county.”

Chaparro said she voted against the bond financing in September because the documents were labeled drafts. She has also complained about missing pages.

“I’m thinking, why are we even doing this? We’re not ready,” she said.

Fast-forward more than a month, and Chaparro said commissioners and their constituents should be kept updated on changes to the agreements.

“There is no permanent document yet, even though we’ve already voted on it, and that is just wrong,” she said.

Barber cautioned the other commissioners against trying to insert themselves back into a decision-making process they handed to Schaljo-Hernandez. That’s because if three or more of them discuss the agreements outside a public meeting, they’re violating the Open Meetings Act with an illegal rolling quorum.

“They’re done representing their constituents,” she said. “They gave it away at that meeting on the 19th, whether they meant it or not.”

The changing documents

The Project Jupiter agreements as the county originally released them start on page 169 in this document.

Versions of the agreements as they existed when commissioners voted on Sept. 19 are all at the end of this article.

Here are the newest versions of the agreements, released to me by county administration in response to a public records request, on Thursday and Friday:

The industrial revenue bonds:
• Lease with Yucca Growth Infrastructure, LLC
• Yucca Growth bond purchase agreement
• Yucca Growth indenture
• Lease with Red Chiles (A/B/C/D), LLC and Green Chile Ventures, LLC
• Red Chiles bond purchase agreement
• Red Chiles indenture
• Red Chiles sublease
• Lease with Green Chile Ventures, LLC
• Green Chile bond purchase agreement
• Green Chile indenture
• Green Chile sublease

The LEDA (gross receipts tax) agreement:
• Ordinance 368-2025
• Project participation agreement

Other:
• Memorandum of understanding

And here are the newest documents provided to me by Schaljo-Hernandez on Monday:
• Lease with Yucca Growth Infrastructure, LLC
• Community benefits agreement

Disclosure: My spouse, state Rep. Sarah Silva, is asupporter of Project Jupiter.