Coachella City Council to Discuss Stronghold Power Agreement Amid Data Center Controversy

The Coachella City Council will meet Wednesday night to discuss its agreement with Stronghold Power Systems, the company behind a proposed data center campus that has faced growing community opposition in recent weeks.

Two items related to the Stronghold deal appear on the agenda. The first is whether to hire an outside attorney to independently review the contract the city signed with Stronghold in February, a review the city estimates would cost between $10,000 and $25,000. The second is a broader council discussion of the agreement itself and where things stand.

The February agreement made Stronghold the city's partner in building and operating the Coachella Municipal Utility, the city's own electric grid intended to serve development on Coachella's eastern side. The data center campus is the anchor tenant for that utility, and the financial projections tied to the deal, including more than $21 million in projected annual revenue to the city, depend heavily on the campus moving forward.

The agreement came under public scrutiny after a packed town hall earlier this month, where residents raised concerns about the project's potential strain on water supplies and local resources. Those concerns prompted Riverside County Fourth District Supervisor Manuel Perez to rescind his letter of support for the project, saying it still requires an Environmental Impact Report, a full California Environmental Quality Act review, and additional community input.

Stronghold has pushed back on that criticism, saying the project would bring real economic benefits to the community at no cost to residents. However, the Coachella Valley Water District has said no water supply assessment has been submitted for the project, leaving key questions about water usage unanswered.

According to a Coachella Staff Report, on May 12, Stronghold's legal counsel sent a letter to the city expressing concern over the tone of the town hall discussion and asking for written reassurance that the city intended to honor the terms of the agreement. The report acknowledges the city received the letter, but has not listed any actions taken so far. 

Wednesday's meeting begins at 6 p.m. at Coachella City Hall, 1515 Sixth Street. The public can also attend via Zoom.