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Two supervisors, Jennifer Allen and Andrés Cano, who both voted against the sale, said Thursday they have serious questions about the validity of the sale agreement, approved 3-2 by the board on June 17. They cite the Tucson City Council’s decision on Aug. 6 not to proceed with the project and not to annex the land for Project Blue from unincorporated Pima County. The land sale agreement includes the annexation as a condition that must be met for closing the sale.

However, a third supervisor, Matt Heinz, who supports the project and the land sale, said his reading of the sales contract is that the buyer of the land — Humphrey’s Peak LLC — can cancel the sale agreement if contingencies such as annexation aren’t met, but not the seller, Pima County. As far as he’s concerned, the land sale agreement remains valid, Heinz said.

The County Attorney’s Office asked that this issue be discussed in the board’s executive session Tuesday because several board members and members of the news media were asking questions about the legal status of the sale agreement now that the City Council voted not to proceed with Project Blue, said Carmine DeBonis, a deputy county administrator.

The question of whether the June sales agreement remains valid “is a central part of the discussion that is going to occur with the board and the County Attorney’s office,� said DeBonis, who declined to weigh in on that issue because “that’s a a legal question, best addressed by the County Attorney’s Office.�

The sales agreement gives the county and Humphrey’s Peak LLC up to a year to close the deal. But “we’ve not had any discussions with the development group about what their planned approach is� since the City Council turned Project Blue down, DeBonis said. “We don’t have details about what they’d like to do.�

The board discussion will come eight days after Tucson Electric Power and Beale Infrastructure, Project Blue’s developer, formally asked the ÃÛÁÄÖ±²¥ Corporation Commission to approve an agreement between the two parties for TEP to deliver up to a capacity of 286 megawatts of electricity to Project Blue at the far southeast side site the county had voted to sell to Humphrey’s Peak Properties.

The project was planned to put up to 10 data centers on the entire property, although its first phase was to include only four data centers. The 280 megawatts is supposed to serve the first phase only. The site lies near the Pima County Fairgrounds along Brekke Road, between Harrison and Houghton roads.

Since the board’s June 17 vote, the sale hasn’t closed. Now, a major reason Allen and Cano believe the council’s decision not to annex that land and not to proceed with the project is important is that the county board approved the land sale with the understanding that the data centers would use reclaimed water from Tucson Water, the city utility, to cool them. Also, the company had committed to pay to build an 18-mile pipeline to take that water to the data center site. With the council’s decision, those elements will no longer be in the project.

“What the board approved and what Beale is now planning to do are vastly different,� Allen said. “For that reason alone the contract should be voided.�

“Beale is progressing with a new plan: this is not what was presented to the Board of Supervisors,� Allen said. “Per the land sale contract, without annexation, we believe the land should revert to Pima County.�

Cano said, “Personally, I’m of the mindset that Project Blue is a project that no longer has legs with the county and city. So much of the discussion that’s happened to date, those actions were always incumbent on the county acting first, the city acting second, moving forwards to a path to make this project happen. Now, it’s no longer Project Blue. it’s Project X with an undefined pathway.

“I can’t imagine this proceeding without us looking at every detail as to what are the county’s next steps,� Cano said. “We were presented background material that this would be a large-scale infrastructure project, benefiting the city, using reclaimed water. For us to now not have those agreements, for us to have uncertainty about what jobs will be created now — I have so many questions.�

Heinz, however, said he reviewed the sale contract with the county’s legal team, with Deputy County Administrator Carmine DeBonis and with county economic development officials, and “it is very clear to me that the people who can stop it (the sale) based on items not being met is the buyer. It also says the buyer may opt to waive the contingencies. The seller is not given authority to waive anything.

“I don’t understand what they are trying to do,� Heinz said of Allen and Cano. “I don’t think there needs to be a new contract, or another vote. When I read and review the contract, it is pretty clear the entity able to enforce conditions at time of closing is the buyer.�

He faulted the Tucson City Council for giving up its control over what happens with the project by simply killing its role outright. If you have conversations with the developer, “you have a lot of power. You can put in guardrails,� Heinz said. “Now that Tucson took themselves out of consideration, we don’t have the same control that we had. What if they find a parcel of land where they get to drill wells? That would be pretty crappy.�

Heinz wouldn’t be surprised if Beale ultimately chose another location for its first Project Blue site because of the difficulties of getting water to that site without the city reclaimed water line, he said.

He spoke to Beale officials earlier this week and asked them about the water situation for Project Blue, and “their response was ‘stay tuned’,� Heinz said.

“It does not have to be on the 290-acre parcel� involved in the county land sale. “Most likely, it wouldn’t work there without Tucson Water,� he said.

Beale Infrastructure officials didn’t respond to a Star request for comment on the pending issues going before the Board of Supervisors on Tuesday.

Supervisor Rex Scott, who also supported the land sale for Project Blue in June, said it’s prudent to refrain from commenting on the pending executive session item until at least after the board discusses it Tuesday because he doesn’t know why the County Attorney’s Office asked that it be discussed.

Supervisor Steve Christy, the board’s lone Republican, who also supported the Project Blue land sale, said he can’t answer questions at this time about the legal ramifications of how the sale contract would work without Project Blue being annexed into the city.

“I’m not a contract lawyer or that much involved in actual contractual elements,� he said. “All I can say is that is a good question. I wish I could be more clarifying on that. It’s a question somebody else is going to have to answer, mainly Project Blue and county lawyers.

“It just seems to me it was initially assumed if annexation didn’t happen, that the whole deal was off. It appears there may be more to that piece than originally was conveyed, that gave Project Blue folks an option to take that or pursue it,� meaning the county-owned parcel even after the annexation into the city was killed, Christy said.