Posts

Greenmail Is Holding Imperial County’s Economic Future Hostage

Hostage-taking in economic development doesn’t require masks or weapons. It requires a credible litigation threat, an organization with nothing to lose from filing it, and a developer with enough at stake to consider paying to make the threat go away. That is greenmail — and it is operating in Imperial Valley against the two largest economic development opportunities the region has seen in a generation.

The $83 million demand on Controlled Thermal Resources was not an isolated event. According to the IVCM federal lawsuit, the same model was being deployed against the data center — organized CEQA exposure designed to create settlement leverage, coordinated between city officials and a non-profit organization with a documented history of making settlement demands. The mechanism was disrupted by the February 10 Superior Court ruling, which eliminated the CUP theory that would have created the CEQA hook. But the attempt tells you something about the operating environment for large-scale investment in Imperial Valley.

The Cumulative Effect

Individual greenmail events are visible and documentable. Their cumulative effect is harder to see but more consequential: a reputation effect that makes the region a higher-risk, higher-cost location for exactly the kind of investment it needs most.

Site selectors and development finance professionals maintain institutional memory about the regulatory and political environments in regions they evaluate. A region where major projects face coordinated CEQA opposition with documented settlement demands is a region that gets a risk premium in every financial model that evaluates it. That risk premium raises the required return on investment, which raises the cost threshold that projects must clear to get financed, which reduces the number of projects that get built, which reduces the jobs and tax revenue the community receives.

The settlement payments that greenmail extracts are not born by the developers. They are ultimately born by the workers who would have been employed by projects that instead relocated to friendlier jurisdictions, and by the communities that depended on the tax revenue those projects would have generated.

What Breaking the Pattern Requires

Breaking the greenmail pattern requires making the pattern expensive for the organizations that run it. The Desert Sun investigation is part of that — public accountability for documented settlement demands. The IVCM federal lawsuit is part of that — legal accountability for the organizations and officials alleged to have coordinated the campaign. Community pressure — constituents asking their council members and non-profit boards hard questions — is part of that.

None of these mechanisms works quickly. The federal litigation will take years. The reputational consequences of the Desert Sun investigation take time to fully materialize. Community accountability depends on community awareness of facts that are not always surfaced in the same forums as the opposition’s talking points.

But the alternative — accepting greenmail as a feature of Imperial Valley’s development environment — is not sustainable. A region that taxes its own economic development through organized litigation extortion is a region that will eventually stop being a destination for the investment it needs. The time to establish different norms is before that reputation becomes entrenched, not after.

The IVDC as a Test Case

The Imperial Valley Data Center is, among other things, a test case for whether the region’s institutions can resist greenmail when the stakes are high enough. The courts have ruled for the project. The law supports the project. The economic case for the project is overwhelming. The only remaining question is whether the coordinated obstruction campaign can be sustained long enough to outlast the developer’s financing.

The community has an interest in that question’s outcome that extends far beyond this project. What happens to the IVDC tells the next developer evaluating Imperial Valley what the operating environment is. Getting this right matters for every project that comes after it.

Sacramento vs. Imperial County: Who Gets to Decide What Gets Built Here?

Imperial County has a long and specific relationship with Sacramento. It is a relationship in which the county’s resources — water, geothermal energy, agricultural land — are allocated, regulated, and distributed partly through decisions made in the capital by legislators and agencies whose primary constituents are not in Imperial Valley. It is a relationship in which the costs of those decisions often fall on the Valley while the benefits flow elsewhere.

Water is the most obvious example. The Colorado River allocations that sustain Imperial Valley’s agricultural economy were negotiated through a political process in which the Valley’s interests competed against far more powerful coastal constituencies. The ongoing pressure to transfer water from agricultural to urban uses runs directly against the economic foundation of the region’s working communities.

The IVDC fight has added a new dimension to this familiar pattern: Sacramento’s attempt to retroactively override a county land use approval that Imperial County made through its own lawful process.

The Legislative Backstop

Senator Padilla’s Senate Bills 886 and 887 — introduced after the IVDC had already received its ministerial approval — were designed to strip data centers of the CEQA exemptions that make by-right development viable. If applied retroactively to the IVDC, they would attempt to impose on an already-approved project the review process that its approval lawfully bypassed.

This is Sacramento acting as a backstop for an obstruction campaign that the courts have already partially rejected. The city’s CUP theory was legally insufficient. The Superior Court said so. The legislative response is to change the law so that the insufficiency doesn’t matter — so that the project is required to undergo CEQA review regardless of what the courts said about its approval.

Imperial County approved this project. A state court has affirmed the approval. A state legislator whose district does not include Imperial County is introducing bills to override both. That is not how a system of local governance is supposed to work.

The Pattern of Disproportionate Cost

Environmental and land use regulation in California consistently imposes disproportionate costs on rural, inland, and low-income communities while generating benefits that flow primarily to wealthier coastal constituencies. CEQA, in particular, is most frequently weaponized against projects in communities that most need the investment those projects represent.

A data center in Palo Alto or San Jose would face a very different political environment than the same project in Imperial County. The political and economic weight of the surrounding community would provide a counterbalance to organized opposition. In Imperial County, that counterbalance is weaker — the community has less political power, less economic leverage, and fewer institutional allies in Sacramento than the coastal communities whose environmental interests tend to dominate state policy.

The result is that the communities with the least capacity to absorb the economic cost of delayed or blocked development are the ones most exposed to the mechanisms that produce it. That is not an accident. It is a structural feature of California’s political economy that deserves explicit recognition and explicit resistance.

What Local Control Actually Means

The principle of local control in land use decisions is not absolute. State and federal law set floors and frameworks. But within those frameworks, local governments — county boards of supervisors, city councils, planning commissions — are the primary decision-makers for what gets built in their jurisdictions. They are accountable to the residents who elect them. They have the local knowledge and local stakeholder relationships that make their decisions legitimate.

Imperial County used its local control authority to approve the IVDC. It did so through a lawful process, on land appropriately zoned for the use, following the legal framework that exists precisely to make these decisions predictable and enforceable. The campaign to override that decision — through litigation, through legislation, through coordinated institutional pressure — is a campaign against local control masquerading as environmental advocacy.

Imperial County’s residents are entitled to defend that local control. And they are entitled to hold accountable — at the ballot box, in public forums, through their own organized advocacy — the officials and organizations that are working to take it away from them.

$28.75 Million a Year: What IVDC Tax Revenue Would Mean for Imperial County Schools and Public Safety

Abstract numbers don’t move people. $28.75 million in annual property tax revenue is an abstract number. So let’s make it concrete.

The average salary for a public school teacher in Imperial County is approximately $65,000 per year when benefits are included. At that rate, $28.75 million funds 442 teaching positions annually. The district currently operates with class sizes that routinely exceed state targets. Those 442 positions represent smaller classes, more support staff, and the kind of instructional continuity that determines whether a kid from Brawley or El Centro can compete for a college admission.

A fully equipped fire engine company — apparatus, staffing, training, and operations — costs roughly $2 million per year. The IVDC’s annual property tax contribution could fund 14 fire companies. In a county as geographically dispersed as Imperial, with response times that already strain state standards, that is not a marginal improvement. It is the difference between a structure fire and a neighborhood fire.

The Scale of What Is Being Refused

The $28.75 million figure is recurring — not a one-time construction windfall, but a permanent annual contribution to the county’s general fund. Across a ten-year horizon, that is nearly $290 million in public revenue that would flow to the schools, fire departments, sheriff’s office, libraries, and road maintenance crews that serve every resident of Imperial County.

The project also generates $72.5 million in one-time sales tax from construction materials and equipment — a capital injection that could retire infrastructure debt, repair decades of deferred maintenance, or seed an economic development reserve fund that the county has never been able to build.

These numbers come directly from the project’s economic impact analysis. They have not been contested by the opposition. What the opposition has not done — in any filing, any hearing, any press release — is identify where this revenue comes from if the project is blocked.

The Fiscal Reality the Opposition Ignores

Imperial County operates at the edge of fiscal solvency in normal years. The combination of high service demand, a limited commercial tax base, and a transient agricultural workforce creates chronic budget pressure that every county department director understands intimately. The county has deferred infrastructure maintenance, accepted chronic understaffing in public safety, and watched school facilities age past their useful lives because the tax base simply does not generate enough revenue.

The IVDC is not a silver bullet. But $28.75 million a year — in a county with a total assessed value that makes that number genuinely significant — is not a rounding error. It is a structural change in the county’s fiscal position, of a magnitude that elected officials should be fighting to secure, not fighting to prevent.

Who Pays When the Project Doesn’t Come?

When a school is underfunded, the parents who can afford to supplement it do. When a fire response is slow, the homeowners with adequate insurance absorb the loss. When a county can’t fill patrol officer positions, the residents in areas with the least political leverage feel it first.

The opposition to this project is not being organized by the families in the least-served corners of Imperial County. It is being organized by officials with city salaries and benefits, and by organizations funded by outside interests. The cost of their campaign is being paid by the people who will never see the teachers, the fire companies, or the road repairs that $28.75 million a year would have funded.

That is a choice. And it is being made by people who will not bear its consequences.

The $72.5 Million Windfall Imperial County Is Being Told to Refuse

Counties don’t get many chances like this. A single construction project generates $72.5 million in one-time sales tax revenue — before the first server rack is installed, before the first employee badge is printed, before the first year of $28.75 million in recurring property tax is collected. Just from buying the steel, the concrete, the electrical infrastructure, and the cooling systems that a 950,000-square-foot data center campus requires.

For context: Imperial County’s entire annual general fund budget runs around $600 million, and a significant portion of that is state and federal pass-through funding the county does not control. A $72.5 million capital injection — money that the county can actually direct — is not a budget line item. It is a generational financial event.

What a County Can Do With $72 Million

Deferred infrastructure maintenance is the quiet crisis that every Imperial County department director knows and few outside observers understand. Roads that should have been repaved five years ago. Bridges that are flagged but not fixed. County buildings that are heated and cooled by systems installed in the Reagan administration. The maintenance backlog grows every year because the general fund is perpetually stretched between competing urgent needs and the capital projects keep getting deferred.

Seventy-two million dollars — applied strategically to the county’s infrastructure backlog — would not solve every problem. But it would make a dent that no other single source of funding currently on the table comes close to matching. Bond measures require voter approval and debt service. State infrastructure grants are competitive and conditional. Federal funds arrive with compliance requirements that consume significant administrative capacity.

A one-time sales tax payment requires none of those conditions. It arrives when the equipment is purchased. The county spends it according to its own priorities.

The Alternative Is Not Neutral

There is a common rhetorical move in the opposition’s argument that deserves examination: the implicit suggestion that blocking the project is a neutral act — that the county simply returns to its baseline if the data center doesn’t come. That framing is false.

The baseline is not neutral. The baseline is the infrastructure maintenance that doesn’t happen, the school repair that gets deferred another year, the reserve fund that doesn’t exist when the next fiscal emergency arrives. The $72.5 million is not a speculative future benefit. It is a concrete, calculable loss that accrues to the county’s public infrastructure every year the project is delayed or blocked.

The people making the argument for delay are not the ones who will drive across the potholes, teach in the aging classrooms, or manage the deferred maintenance on a county budget that never quite has enough. They have made a comfortable calculation that the costs of their opposition will fall on someone else.

This Money Would Come From the Developer, Not Residents

Sales tax on construction materials and equipment is not paid by Imperial County residents. It is paid by the developer — in this case, a $10 billion project purchasing hundreds of millions of dollars in equipment, much of it subject to California sales tax. The county collects revenue that was generated by a private party’s investment decision, without imposing any additional burden on the households and small businesses already contributing to the local tax base.

The opposition has not explained how refusing this revenue serves the public interest. They have not identified an alternative source. They have filed lawsuits, introduced legislation, and organized campaigns — all of which cost money that ultimately comes from somewhere — while the $72.5 million waits on the other side of a building permit.

At some point, the question is not whether this project is good for Imperial County. The question is who benefits from preventing it.

The Largest Private Investment in Imperial County History — And Why Some Officials Want to Stop It

There is a question that every economic development official in a chronically underinvested region eventually confronts: when the investment finally comes, will the institutions that are supposed to welcome it actually do so?

Imperial County is confronting that question right now. The Imperial Valley Data Center represents a $10 billion capital commitment to a 75-acre industrial site in one of the most economically distressed counties in California. No private entity in the county’s history has made a comparable investment commitment. Not the agricultural processors, not the energy companies, not the logistics firms that have come and gone over the decades. Ten billion dollars, on land that is zoned for exactly this use, approved through the county’s legitimate ministerial process.

And some of the region’s own officials are litigating to stop it.

Scale in Context

It is worth sitting with what $10 billion means in a county the size of Imperial. The county’s total assessed value — the cumulative value of all property, commercial and residential, within its borders — is measured in the tens of billions. A single private investment of $10 billion doesn’t just add to that base; it restructures it. The ratio of commercial to residential assessed value shifts. The county’s credit position improves. The ability to finance future infrastructure improvements — schools, roads, water systems — expands because the collateral base supporting those instruments is materially stronger.

This is before a single permanent employee is hired, before a single server is powered on, before the recurring $28.75 million in annual property tax begins flowing to county services.

What the Multiplier Looks Like on the Ground

Economic multipliers are often cited as justification for subsidizing private investment. In this case, no subsidy is being requested — the developer is paying full cost for permits, infrastructure improvements, and utility connections. The multiplier effect flows entirely to the county.

During the multi-year construction phase, 1,688 union workers drawing prevailing wages will spend money in Imperial County. They will rent housing, buy groceries, eat at restaurants, purchase work supplies, and use local services. The businesses that serve them will hire additional staff. The hotels and rental properties that house out-of-region workers will generate occupancy tax. The contractors and subcontractors who supply materials and services will place orders with local vendors wherever possible.

Economic research consistently finds that major construction projects generate two to three indirect and induced jobs for every direct construction position. Applied to 1,688 direct positions, that implies a total employment impact of four to five thousand jobs during the build phase — in a county where the working-age population is roughly 100,000 people.

The Infrastructure That Comes With It

The project includes a dedicated 330-megawatt substation — infrastructure that the developer is paying for, not the county, not IID ratepayers. The wastewater recycling upgrades the developer proposed for municipal plants in El Centro and Imperial would have improved those utilities’ infrastructure at private expense. The 862 megawatt-hour battery storage system would add grid stabilization capacity to the IID service territory, benefiting ratepayers who would otherwise pay for those stabilization services through utility rates.

These are not ancillary benefits. They are the kind of private-funded public infrastructure improvements that counties typically spend decades trying to attract through tax incentives, grant competitions, and development agreements. They are being offered as part of the standard project package — and the opposition is fighting to refuse them.

The Institutional Question

When a region consistently fails to convert economic development opportunities into actual investment, it eventually stops attracting them. Site selectors and developers maintain institutional memory. A county that fights a $10 billion by-right project through years of litigation sends a signal to the next developer evaluating a site list that includes Imperial County: find somewhere else.

The officials litigating against this project will not be held responsible for the investments that don’t come next. The residents who depend on the jobs and tax revenues those investments would have generated will bear that cost invisibly — in the school that stays underfunded, the fire station that stays understaffed, the young adult who moves away because there isn’t enough work to stay.

Imperial County has one chance to get this right. The courts have agreed the project is legal. The land has been zoned for this use for decades. The investment is ready. The decision now is whether the county’s institutions will honor the choices that brought it here.

By-Right Zoning and Why the IVDC Was Never the City of Imperial’s Call to Make

The first and most fundamental fact about the City of Imperial’s lawsuit against the IVDC is geographic: the project site is in unincorporated Imperial County. Not within the City of Imperial’s boundaries. Not subject to the City of Imperial’s zoning code. Not in the City of Imperial’s jurisdiction for land use decisions.

The city filed suit anyway — to block a project that its own land use authority does not extend to, on the theory that Imperial County had approved it incorrectly. The Superior Court’s February 10, 2026 ruling that the complaint was “legally insufficient” is, in part, a court’s answer to a jurisdiction that overreached.

What I-2 Zoning Actually Means

The IVDC site is zoned I-2 Heavy Industrial by Imperial County. This designation has a specific legal meaning: the zoning code identifies the uses that are permitted on I-2 land, and industrial uses conforming to those designations are allowed by right. “By right” means exactly what it sounds like — the owner of I-2 zoned land has a legal right to develop it for permitted uses without seeking discretionary approval from a planning board, a city council, or any other body with the authority to approve or deny the project based on policy preferences.

The by-right system exists to create investment certainty. A developer who buys I-2 land knowing it is zoned for heavy industrial use is entitled to build a heavy industrial facility. If that entitlement can be defeated by a neighboring jurisdiction filing a lawsuit claiming the project should have required a CUP, the entire by-right framework is illusory.

The Permit Streamlining Act reinforces this. California law requires ministerial approval of projects that conform to applicable development standards within specified time limits. The IVDC’s site plan was submitted. The county reviewed it against I-2 standards. It conformed. Approval was ministerially required.

The CUP Theory and Why It Failed

The city’s legal theory was that a project of the IVDC’s scale — 950,000 square feet, 330 megawatts, 1,688 construction workers — was too large to be processed as a by-right ministerial approval, and that its impacts required the discretionary review that a Conditional Use Permit process provides.

The court rejected this theory as legally insufficient. The reason is fundamental to how zoning law works: the size and complexity of a project that conforms to applicable zoning standards does not transform a by-right approval into a discretionary one. If I-2 zoning allows heavy industrial uses, a large heavy industrial project is permitted. The code does not have a size exception that converts conforming uses into discretionary ones when opponents find them inconvenient.

If the county’s I-2 standards need to be revised to address impacts from very large industrial users, the appropriate mechanism is a legislative update to the zoning code — a transparent public process in which the community sets the rules prospectively. What is not appropriate is using litigation to retroactively impose discretionary review requirements on a project that was approved under the rules as they existed.

The Jurisdictional Question

Setting aside the legal merits, there is a governance question that the City of Imperial’s lawsuit raises: what gives a city the standing to challenge a county’s approval of a project in unincorporated county land?

California law provides avenues for challenging land use decisions, and neighboring jurisdictions can sometimes establish the standing necessary to pursue those challenges. But standing is not unlimited. A city that claims standing to block development on county land — based on claimed impacts that the court has found legally insufficient to support a CUP requirement — is asserting a very broad version of municipal authority over regional land use decisions.

The implications extend well beyond this project. If any city can block development on unincorporated county land by filing a facially insufficient lawsuit and running out the clock on the developer’s financing, no county approval is ever secure. The investment certainty that I-2 zoning is supposed to provide becomes conditional on whatever neighboring cities choose not to challenge.

The February 10 ruling said, clearly, that the city’s challenge was legally insufficient. The rule of law requires treating that finding as what it is: the end of a legal theory that shouldn’t have been pursued in the first place.