Oro Valley moves to close data center loophole, shelves 888-acre annexation

Oro Valley moves to close data center loophole, shelves 888-acre annexation

ORO VALLEY, Ariz. (Tucson Daily Brief) — The Oro Valley Town Council on Wednesday started an expedited code change to bar data centers from being allowed by right in any zoning district, with a moratorium "to the degree possible" while the change is drafted. In the same meeting, the council voted 7-0 to pause work on annexing 888 acres of state trust land near Tangerine and Thornydale roads.

The council also approved $500,000 to finish the trail, grading, irrigation and turf around the pond at Vistoso Trails Nature Preserve, after about 10 residents urged it not to wait.

All seven council members attended.

Data center code change

Vice Mayor Melanie Barrett, who requested the item with Mayor Joseph C. Winfield, said she understood the town code may contain loopholes that "could allow for data centers in multiple of our zoning districts." She compared them to issues recently raised before the Board of Adjustment and said there were "people potentially interested in moving forward on some of those."

Barrett described a two-part approach:

• Now: Close the gap immediately, under the current council.
• Later: Have a future council study noise, water and energy use while following similar efforts by Tucson and Pima County.

Her motion directed staff to initiate a code amendment "making clear that data centers are not allowed by right in any zoning district in Oro Valley." It called for:

• A special Planning and Zoning Commission session on or before Oct. 27.
• A special council session on Oct. 28.
• A moratorium, to the degree possible, while the work is done.

Council Member Mary Murphy seconded. The motion passed 6-0 with one abstention. The abstaining member did not explain the vote.

Staff said the town must post notice and notify every owner of property zoned C-1, C-2 and Tech Park. Staff said it needed 20 days to do so, which the Oct. 27 date allows.

Annexation paused

The council directed staff to pause work on the state land annexation known as the Tangerine 888 and to focus instead on the Oracle Road and Ina Road area. Barrett made the motion and Murphy seconded.

The land lies between Moore Road, Camino del Norte, Thornydale Road and Shannon Road. The town has been the applicant with the Arizona State Land Department since 2018. The project appears in the council's 2026-27 strategic plan and the town's annexation strategy.

Staff concepts. Principal Planner Michael Spaeth presented concepts for both parcels:

Spaeth said the South parcel's commercial space is roughly the size of the Home Depot shopping center at Rooney Ranch. Murphy recalled that the 2018 proposal had been about 3,200 units; Spaeth called the new concepts a "dramatic reduction."

Revenue estimates. Staff estimated about $24.5 million in one-time revenue, including:

• About $5.75 million in impact fees
• $4.7 million in permit fees
• $13.3 million in construction sales tax

Annual revenue was estimated at about $3.2 million: roughly $1 million in retail sales tax, $1.8 million in state-shared revenue and $320,000 in utility tax. Road maintenance would cost about $1 million over 10 years. Staff said these were planning-level figures, not a net fiscal impact analysis.

Police modeling found no new officers would be needed, though two could be required if calls for service ran higher than expected.

Water. Water Utility Director Peter Abraham said the Arizona Department of Water Resources in July 2026 renewed the town's 100-year assured water supply designation, based on groundwater only. The designation counts the 888 acres as committed demand, with about 1,000 acre-feet a year tied to the land.

• Current potable demand: about 7,500 acre-feet a year
• Town build-out plus the 888 acres: about 9,000 acre-feet
• Current designation: about 11,400 acre-feet

Abraham said that even with a 100% cut to the town's Central Arizona Project allocation, groundwater would last about 130 years at build-out, including the 888 acres. He said the annexation would raise total build-out demand by 7%.

Council skepticism. Several council members questioned the commercial projections:

• Winfield noted that many new businesses at the Oro Valley Marketplace generate little or no sales tax.
• Council Member Josh Nicolson questioned counting state-shared and utility revenue as a benefit. He also noted that commercial land near the marketplace had sat vacant for years.
• Barrett said the State Land Department had "strong armed" the town into including the northern parcel, which she called a loss leader with "basically zero commercial potential." She said she was more open to the southern portion.

Staff said the department told the town about a week before the meeting that it would not split the parcels. "It's a whole package," the staff member said.

Staff said it was neutral. "If you're not sure you wanna go forward, I'm gonna go out and say it out loud. Please don't," a staff member said.

Council Member Joyce Jones-Ivey said she saw no clear benefit to the town. Murphy said council members-elect should weigh in before any further work.

Three residents of the unincorporated area spoke against annexation, citing:

• Wildlife corridors
• Heritage saguaros
• Traffic
• Strain on private wells

Vistoso Trails pond

About 10 speakers urged the council to finish the work around the pond while the contractor is on site rather than wait on a federal grant. Speakers included council members-elect Rosa Dailey and Matt Wood. Wood said he chairs the town's Parks and Recreation Advisory Board.

Schedule. Public Works Director and Town Engineer Paul Keesler said "we are not stopping the project." The construction contract was signed May 11, 2026, and ground was broken in early July. Before a recent storm, the pond was expected to be done by Jan. 31, 2027. Keesler now expects mid-February, still ahead of the one-year contract.

Budget. The original scope, including the memorial and parking lot, had a budget of a little over $2.5 million. That figure includes $78,000 from the Zimmerman house donation. Keesler said:

• The project was over budget by about $17,000.
• Staff is negotiating a pending $176,000 change order.
• Bids for the added sidewalk and irrigation came in about $227,000 to $228,000 above available funding.
• Turf would cost about $130,000.

Together, the added elements need about $425,000. Keesler recommended $500,000 to include contingency, with any unspent money returned.

He said doing the work now avoids a remobilization fee and lets heavy grading happen before the pond liner goes in. Sod would be laid last, likely in May.

Barrett moved to allocate the $500,000 from contingency; Murphy seconded. Chief Financial Officer David Gephart said the money should come from capital fund contingency, and the motion passed 7-0. Barrett told residents "no one on council was ever trying to delay anything about the project."

Parks and Recreation Director Rosalyn Epting said the town has spent just over $4 million on the property since taking ownership. Grants include:

• $136,000 for the trail around the pond
• $36,000 from the Department of Forestry and Fire Management for invasive plant removal
• A newly awarded $55,000 grant from the Tohono O'odham Nation for restoration and interpretive signage

Federal grant application revised

On a 7-0 vote, the council directed staff to revise a Land and Water Conservation Fund grant application for the preserve. The motion was Barrett's, seconded by Nicolson. The revised application will:

• Drop items funded earlier in the night.
• Not limit the town's match to the roughly $200,000 in next year's capital budget.
• Return to the council with any additional eligible features.

The grant as previously drafted totaled $815,000 with a 50-50 match. Epting said:

• No listed work can begin before the application.
• The town is reimbursed only after the entire project is finished.
• The town cannot seek another such grant until this one is complete.

Epting added that cost estimates have risen since the draft.

A resident asked the town to restore a restroom near the driving range. The resident said it has been unusable since electrical service was removed when an adjacent parking lot was cleared. Epting said the restroom also needs ADA updates.

Also discussed:

• The council approved the consent agenda 7-0. It included a Drug Enforcement Administration task force agreement, an amended agreement with Amphitheater Unified School District adding a school resource officer, and two Governor's Office of Highway Safety grants for DUI and traffic enforcement. The council separately voted 7-0 to correct the Sept. 16 minutes to show Jones-Ivey present.
• The council met in executive session on personnel matters; no action was taken.
• Nicolson asked for a future agenda item on raising council pay to match Marana's. Winfield set it for Oct. 21.

This report was drafted by Claude Opus 5.5 from a live transcript produced by Deepgram Nova-2, then reviewed and edited by Nicholas De Leon with Claude Opus 5.5, and published at 10:08 PM MST on October 7, 2026. Read more about how this is made.