Utah Data Center Project Near Final Approval

Celebrity investor Kevin O’Leary plans to build a massive hyperscale data center project in Box Elder County — which state boosters say will fund modern buildings at Hill Air Force Base while generating all of its own power, cleaning the water it uses so it can be sent to the Great Salt Lake and creating 2,000 high-paying jobs in the rural area. The board that oversees the state’s Military Installation Development Authority, or MIDA, approved a series of resolutions Friday to move the multibillion-dollar project forward, agreeing to move fast and charge far lower taxes than usual to help O’Leary “lure the hyperscalers” to Utah. “There’s only five hyperscalers in America, OK, so it’s pretty easy to know who they’re negotiating with,” Paul Morris, MIDA’s executive director, told the board Friday. “You can look those up and you know who they’re talking to.” Amazon, Microsoft and Google are the country’s top-tier hyperscalers — tech giants that run vast cloud computing networks. Analysts typically list Meta and Apple right behind them. The project is awaiting only a final approval from the Box Elder County Commission, which postponed a planned Friday afternoon meeting until Monday. The head developer of the project is O’Leary Digital, owned by O’Leary, a Canadian tycoon and one of the investors on the reality show “Shark Tank,” where his nickname is Mr. Wonderful. O’Leary also made his movie debut last year, co-starring with Timothée Chalamet in “Marty Supreme.” In February, O’Leary posted on Facebook: “Luckily, in Utah, I found … three senators and Governor [Spencer] Cox, pro-business, pro-data centers, but the ball’s back in their court now. We’ve announced that we need every incentive we can get out of that state because we have to raise billions to build this power, and then the data centers that come afterwards.” He appeared by video at MIDA’s Friday meeting, where he marveled at the “unbelievable” speed at which Utah has moved. “I heard about this opportunity just five months ago,” O’Leary said, “No one has pulled this off this fast, ever. The state gets it, the leadership gets it, and the ability to execute like this is extraordinary. I feel like we’ve made it to the Super Bowl together. We haven’t won the game yet, but we’ve all got to execute.” The project will be built on 40,000 acres in unincorporated Box Elder County, where every private landowner has agreed to the use of their land; and on an additional 1,200 acres that include a section of the Utah Test and Training Range (UTTR), which is a Department of Defense site, and property owned by the Utah Trust Lands Administration. This map shows the 40,000 privately owned acres set to be included in a hyperscale data center project approved Friday by the Military Installation Development Authority, or MIDA. The full site also includes 1,200 acres of military and state-owned land: a section of the Utah Test and Training Range and property owned by the Utah Trust Lands Administration. MIDA projects must include military land. In addition to UTTR, all of Hill Air Force Base, its Falcon Hill research park, and 27 Utah National Guard properties across the state will be “associated,” Morris explained, which gives MIDA board members “flexibility” on how to use the funds they will receive from the development. Including the state trust land allows the state to also receive a share of the revenues, he said. MIDA can offer tax incentives to developers so as they build in a project area, they can claim decades-long rebates of the property taxes assessed on the increased value they’re creating. MIDA also can set special tax levies to raise funds and can issue bonds. Box Elder County commissioners, who said at a Wednesday meeting that they had first heard of the proposal a few weeks ago, had been scheduled to give the project the last approval it needs at a meeting late Friday. But late Friday afternoon, that meeting was rescheduled for 10 a.m. Monday. Commissioner Tyler Vincent said Wednesday that when he first heard Morris make his pitch for the project, “I felt like I was drinking out of a fire hose, and trying to digest all of this so quickly.” Vincent said Wednesday the commission had wanted to hear from residents about the proposed data center project before approving it, and to have the county’s lawyers read through the proposed agreement with MIDA. “We don’t want to just jump into something and down the road have it come back to bite us,” Vincent said. The MIDA project area has been dubbed Stratos, a Greek word for an army or an armed force, Morris said. But in presentations in February, according to the web publication Data Center Dynamics, O’Leary gave it another name: Wonder Valley, a name taken from a similar project O’Leary Digital has underway in Alberta, Canada. O’Leary told the MIDA board that the project is a way to compete with China on the technology front. “China built 400 gigawatts of new power over the last 24 months, and much of it is powering A.I. data centers,” he said. “We’re in a race with them, and we seem to have gone to sleep nationally about this, and it’s a bad situation. We have to fix it.” Utah is not the only competitor in this race, O’Leary said. “There’s other campuses, and we’ve got the tenants knocking on our door,” he said. MIDA usually imposes a 6% energy use tax on its developments, Morris told the board. But to stay competitive with others trying to land deals with the same companies, Morris asked board members to approve a sharply reduced rate for the project’s data centers. The board agreed to set it at 0.5%. “We want to make sure we don’t strangle the goose that lays the golden egg,” Morris said. Even at the reduced tax rate, Morris said, the scale of the project means it will generate significant revenue, bringing in an estimated $30 million a year for Box Elder County in the initial phase and more than $100 million annually once it reaches full capacity. “I want you to know we’re taking care of Box Elder County in this relationship,” he said. Its first phase is expected to require about 3 gigawatts of power — nearly matching Utah’s average statewide electricity use of roughly 4 gigawatts, he noted. At full buildout, Morris said, the campus would reach 9 gigawatts, more than double the state’s current total energy consumption. The development agreement MIDA approved Friday allows O’Leary Digital to make a deal with TallGrass Energy for natural gas utility service through a connection to the Ruby Pipeline. The 680-mile interstate natural gas pipeline crosses northern Utah through Box Elder County on its route from Wyoming through Nevada to Oregon. On Wednesday, Morris said that “one hundred percent of the power will be generated off the Ruby Pipeline,” while explaining the project to the county commissioners. “It will not take one electron from the grid,” he said. “In fact, they believe that they’ll eventually have excess power that they’ll be able to put back into the grid.” The project will also create 2,000 permanent jobs in Box Elder County after construction work is done, he said. The agreement also cuts a deal on property taxes for energy generation facilities and data centers. Instead of a standard certificate of occupancy — which would normally trigger property taxes — the project will use a “letter of completion” that sets a flat 1.2% tax on a site’s value. From there, the tax is further reduced. The developer is first credited back enough to bring it in line with Box Elder County’s normal property tax rate, which Morris said is about 0.926%. Of the tax revenue collected at that rate, 80% will be directed to O’Leary Digital, Morris said. Morris said MIDA negotiated with leadership of the House and the Senate, the Governor’s Office of Economic Opportunity and the developer, and “we concluded that … we need to give 80% back to the development so that they can lure the hyperscalers to come.” The remaining 20% will be split between the state and MIDA, Morris said. Once the project is at nine gigawatts, MIDA will receive about $49 million a year to use for military purposes, he said. MIDA’s usual share of the tax on the increased property value — 75% — can be applied to other, non-data center development at the site, he said. From its share, MIDA decides how much to rebate to a developer as an incentive. Personal property taxes also will be rebated for data centers, he said. “They would not get any hyperscalers to come if you try to do the personal property tax on the equipment,” Morris said, citing the example included in the development agreement: computer chips rapidly depreciate as technology advances and need to be swapped out. Utah’s 4.8% sales tax is projected to bring in about $250 million a year from the data centers alone, he added. ‘Minimal’ water usage expected Morris said the data centers will use new cooling technology that cleans and recycles water for reuse in the system, before returning it to an aquifer that feeds into the Great Salt Lake. He said the project will lose less water than what’s required for ranching. “Water usage is minimal,” he told Box Elder County commissioners Wednesday, adding, “the water that they’re buying is part of getting the land.” “It’s not the evaporative cooling of old days. It’s circulated water that’s reused,” he said. “The particular water has brine in it, so they’re going to clean the water, use it for the cooling, and then it will go back down into the aquifer and feed into the Great Salt Lake. So they think it’ll be a net gain to the Great Salt Lake.” (Chris Samuels | The Salt Lake Tribune) The Great Salt Lake is seen from the Eccles Wildlife Education Center in Farmington, Monday, April 13, 2026. The lake has lost about half its volume over the past 30 years, with farms, cities and industries using more water from its tributary streams and rivers than the lake’s ecosystem can sustain. Mike Moore, director of staff at Hill Air Force Base, said revenue from the project will “supercharge” Hill’s efforts to replace buildings that date to the World War II era. “They were built before the creation of the United States Air Force,” he told the board. Replacing them will “build out a much stronger economic picture, outside and inside the gates of Hill Air Force Base,” he said. Brig. Gen. Shawn M. Fuellenbach, assistant adjutant general for the Utah National Guard, said projects that build energy resilience and A.I. capabilities “are vital and just tied very closely with our national security and our national defense.” Morris had hit a similar note as he began his presentation, saying the project is one of the biggest in the history of Utah. “The impacts of this, if it’s done correctly, and we believe they have the right team to do it correctly, will be of incredible benefit to the state of Utah financially, and employment,” he said. “It’ll be of incredible benefit to the military, what we do, and a tremendous benefit to the citizens and the landowners of Box Elder County.” For over 150 years, The Salt Lake Tribune has been Utah’s independent news source. 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