EXCLUSIVE: La Osa Data Center Proposal to Continue Despite Pinal County Zoning Rejection, Owner Says

The business behind the controversial La Osa data center project says it plans to downscale and resubmit its proposal to build a massive data storage and natural gas facility near Eloy, Arizona.

The news comes just a little over two weeks after the Pinal County Board of Supervisors rejected proposal to rezone the land for industrial use on a 4-1 vote following significant public backlash over environmental and residential concerns.

“We are pursuing the project,” said Vermaland’s founder and CEO, Kuldip Verma. “The board gave us a thorough hearing, and we respect that … Even though we had the stipulations, and we were addressing most all the concerns they had, they wanted some thorough information, and we respect that.”

Verma confirmed they are planning to downscale the project from a 1 GW facility to either a 200 or 500 MW facility, an amount more in line with the project’s existing energy supply. Vermaland could not confirm a timeline for the new proposal, nor the exact size of the new smaller facility, but emphasized its willingness to work with the local residents, neighbors, supervisors and staff to make an agreeable proposal.

“With all these concerns addressed, I feel positive that we will get approval in this as they see the first phase in progress and the outcome. I think (residents) will be more willing to work with us. I know supervisor Goodman said he liked this kind of project… They just want to make sure that all the concerns are addressed,” said Verma.

Verma specifically thanked the five elected officials representing the county, including Chairman Jeffrey McClure, Vice-Chairman Jeff Serdy, and supervisors Rich Vitiello, Mike Goodman and Stephen Miller, for cooperating with Vermaland on the issue.

“We cannot stop AI. Whether we do it here or we do it in Maricopa County, or we do it in another state, or another country, it’s going to happen,” Verma said. “We just have to be careful how we address all the issues, so the negatives are covered… We just have to figure out how to prevent the downsides.” 

The project has already gone through significant downsizing since its original proposal in 2025 as a 3 GW megafacility housing 59 buildings and two gas-fired power plants to a smaller 1 GW facility housing just 11 buildings and one power plant.

Now, this new facility will be even smaller.

Residents gathered to comment on the proposal for over four hours on August 26. The majority of them opposed the proposal, listing concerns about water use, the need for new electrical infrastructure, noise, air pollution, property values and the relationship between the tech sector and the average Arizonan.

The construction was a major concern of one Red Rock, Arizona, resident, who said the proposal’s plan to rezone the land for heavy industrial use and construct a natural gas facility overlaps with already existing energy proposals like those of Sunridge Power, a proposed 1,360MW natural gas facility housing two plants, and APS’ Saguaro Power Plant Expansion project, which will add two new natural gas generators capable of producing 720 MW of power.

“Forcing Red Rock residents to bear the combined weight of three overlapping fossil fuel plants, extensive battery complexes, solar industrialization and airport expansion is an egregious, unfair bargain to air quality. My air quality,” Red Rock resident Sandra Horn said during the August 26 hearing. “The environmental degradation cannot be undone. This industrial hub directly borders the Ironwood Forest National Monument. The supporting infrastructure, transmission lines, pipelines required to feed these combined projects will permanently frag a fragile ecosystem.”

While most were in opposition to the facility, some did show support. Members of local construction unions supported the project for its potential impact on employment and work in the area. Others were the owners of significant portions of land neighboring the facility who supported the proposal for its potential to increase property values in a largely rural and undeveloped area.

“I’m here to speak in strong support of the La Osa data center project,” said Fernando Lebron, a representative of the SMART Local 359 sheet metal workers union, during the August 26 hearing. “For us this project is about more than a data center. It is about opportunity. It is about putting Arizona tradespeople to work in projects that provide a good paying career and a future for working families.”

While Vermaland could not comment on the estimated cost of the proposal now underway, officials anticipate the proposal could bring over a decade of construction work to the area if approved.