Jan. 1—At a Dec. 5 news conference, Mayor David Ortega was all grins from the stage as he joined Dutch politicians and executives of ASM, a powerhouse tech company, to giddily announce its plans to build a $300 million research headquarters in North Scottsdale.
While the city was rolling out the red carpet in public, alarm bells were going off behind the scenes about ASM’s potential for massive water use.
A key city utility executive reached the chilling conclusion “we cannot support this,” following complaints the semiconductor wafer maker was obfuscating with a “jumble of information.”
Even as Ortega and a few Scottsdale City Council members were mingling with ASM executives at the event, Brian Biesemeyer, the executive director of Scottsdale Water, was hunched over his computer, crafting a pump-the-brakes email.
Months of emails to, from and about ASM reviewed by the Progress used the code name “Project Astra” (not to be confused with “a global collaborative effort … aimed at reducing methane emissions” with the same name).
In a Dec. 5 email, Biesemeyer advised Scott Cooper, the city’s interim Economic Development director, he had two big issues with ASM.
One was ASM’s suddenly unveiled plan to phase building of infrastructure, such as water lines and booster pumps for sewage.
“I think the sewer can be solved as long as ASM understands that they cannot dump to our sewer if their recycle plant is down,” Biesemeyer wrote, alluding to ASM’s plans to recycle 80% of its wastewater.
More forcefully, Biesemeyer issued a stern warning over ASM’s latest plan:
“Water will just get more expensive and then the city will absorb the cost, if water is available at all.”
A few days earlier, Scott Mars, a Scottsdale Water planning director, sent a detailed email to an ASM representative, stating the planned water use exceeded the “threshold established in the Scottsdale Sustainable Water Management Principles.
“The Astra project will be required to secure a legal water supply to support this development,” Mars concluded.
On Dec. 1, Biesemeyer complained to Bill Murphy, one of Scottsdale’s three assistant city managers, about ASM’s tactics.
“This developer had previously given us demand(s) that were supported in our infrastructure plans for this area,” Biesemeyer wrote.
“At the last minute they give us demands that (are) nearly 10 times the original demands and we cannot support this.”
After referencing Cooper’s email for details, Biesemeyer repeated his brutal conclusion:
“The bottom line is we cannot support this industrial facility at build out. They will have their own water reclamation plant and want us to be the back-up when they are down. Not possible given their flows.
“They will also be using over a million gallons of water a day when the rec(ycling) plant is down, because they are not recycling … again not supportable.”
An interesting contrast to ASM’s plans is perhaps an even more ambitious project from its neighbor, Axon — another international giant.
Axon, which makes Taser stun guns and police body cameras, announced plans to build a corporate campus anchored by a new company headquarters, but also featuring a hotel and six apartment buildings.
This, however, requires the city to sign off on a major zoning change on land Axon purchased at a state auction.
The nearby land ASM purchased, by contrast, already has the zoning the Dutch-headquartered company needs for its plans.
Six months ago, ASM bought 21 acres near Scottsdale Road and the Loop 101 for $33 million.
The semiconductor company announced plans to build a $300 million research and corporate office and provide 500 new jobs — with an additional 1,000 employees moving from its current Phoenix office — within 2 miles of Axon and planned Banner Health and Parque corporate campuses.
During months of meetings starting in the spring, ASM frequently quoted water use and sewage figures.
This became the basis for a “draft development agreement,” which theoretically would pave the way for swift construction. ASM said it wants to start building on the desert land in a few months, with a planned completion at the end of 2025.
Documents provided to the Progress show communications seemed agreeable and upbeat until a December email from Cooper rang alarm bells to the city’s top decision makers.
At issue: water, that most precious of Arizona resources.
“Over the past several months, city departments have been working with company representatives as they have been working on their plan for the new (ASM) facility,” Cooper wrote.
He said in September, city officials were told ASM’s water use was estimated between 90,000 and 150,000 gallons per day (GPD).
“However, in late November, the water demands had increased to 424,800 GPD,” Cooper wrote.
“Our Water Resources team has analyzed and considered ASM’s water demands and has notified their representatives of concerns and continue discussions on next steps.”
Dueling slogans
Scottsdale’s Economic Development Department has a straightforward slogan epitomizing its recruiting — and revenue-building — mission: “Choose Scottsdale.”
The Scottsdale Water division has a comparatively complex motto, summarizing its protect-and-serve charge: “Water Sustainability through Stewardship, Innovation and People.”
What could be called “dueling slogans” at the end of emails was in evidence for months, as Cooper of Economic Development lightly romanced ASM while Biesemeyer was the hardcore skeptic.
As early as May, Biesemeyer was writing to a city colleague, stating “the developer did approach Jim (Thompson, the city manager) on a proposal to speed up sewer availability in the area.
“The response back is we don’t see any ‘fast track’ for this.”
Meanwhile Seraphina Seng — ASM’s Singapore-based government relations and public affairs representative who became the point person with Scottsdale — was trading emails with Cooper about the urgency of the company’s plans, which a development agreement (referred to as “DA”) would facilitate.
“Hi Scott,” she wrote Cooper, Sept. 6. “Thanks for the support so far … With the purchase of land completed, there is urgency from ASM management to see this DA done as we move through the next phases of construction.”
“I am planning for meetings later this month with City Council members to preempt the design reviews and DA approvals,” she wrote.
Seng said she would be meeting with council members Betty Janik, Solange Whitehead and Tammy Caputi.
Seng echoed the concept — and a curious word — in another email to Cooper:
“Given that news of the sale purchase was leaked and ASM issued a statement, wanted to make sure we take the opportunity to personally reach out. This will also hopefully help to preempt the DA approval on (sic) the coming months.”
The Progress asked Seng what she meant by “preempt.”
Seng replied, “The intended message was that ASM plans to take the initiative to prepare for and address any questions or clarifications before the design board’s review or any vote is taken on the final plans.”
Over the summer, Cooper told Seng “our attorney is reviewing the draft Development Agreement.”
Seng stressed to Cooper the development agreement “plays a key role in budgeting, planning and scale of what is possible for us at this initial phase.
“Securing this DA prior to us engaging stakeholders on the FTZ (foreign trade zone) authorization will also help with showing and (sic) indication of support from the city for this investment.”
Cooper quickly responded.
“Hi, Sera,” he wrote. “Good to hear from you and looking forward to your visit later this month. I can appreciate the need to move through this agreement in stated timelines.”
Cooper noted details on costs anticipated by ASM for water, sewer and road construction would be needed for a development agreement, but concluded with optimism:
“We will work together to continue to move this forward.”
In September, Seng told Cooper of plans for the big Dec. 5 event, “and we need to have brought this to a close by then to minimize any risks…. Would really appreciate your help to see how we can expedite the drafting and legal process,” she added.
“Do let me know too if there are any issues and the team here would be happy to address them directly with you as well.”
‘Jumble of information’
Indeed, issues quickly arose, primarily voiced by Biesemeyer.
“No offense, but your numbers don’t make sense,” Biesemeyer stated in an April email to a commercial real estate company involved in the ASM sale.
“Perhaps you have switched your water and wastewater numbers?”
He also raised concerns about the differences in the plans submitted by De Rito Partners master plan (“MP”), which called for a senior center and what ASM is planning. ASM purchased the land from De Rito.
“De Rito will need to update and resubmit,” Biesemeyer wrote in October, adding:
“We hold developments to the amounts in the master plans and it’s a problem if the MP shows demands less than the facility will actually require.”
Biesemeyer also complained in October that ASM’s estimates were already on the rise.
“Do you think Scott C(ooper) should request the backup billing documents for the ranges for the existing (ASM) facilities?” Biesemeyer suggested. “And how much larger this facility is expected to be?”
Also in October, Biesemeyer vented frustration with ASM to Cooper:
“Scott, it appears as if the water usage information we have is all over the place. …
“When is this scheduled to go to Council? Just trying to see if we have more time to sort through this jumble of information.”
And, while ASM was singing the praises of a water recycling system that would reuse up to 80% of its water, city officials were demanding the tech giant design systems and procure water rights based on the recycling system failing.
As December began, Scottsdale Water executive Mars emailed the ASM real estate representative, copying Biesemeyer and other city officials.
Mars summarized a Nov. 28 “Project Astra” meeting, following up with city concerns on various fronts.
“Astra must design redundancy to prevent a condition when the on-site water reclamation/treatment system is not in operation (a condition where additional water supply would be needed).”
Mars also stressed ASM’s sewer design “shall be based on peak wastewater flow for the condition when the on-site reclamation/treatment facilities are not in operation for the build-out condition.”
Perhaps most crucially, Mars stated, “The Astra project will be required to secure a legal water supply to support this development.”
In what may have been a desperation move, ASM asked the city to consider its plans over multiple phases, with less stringent city guidelines in the first phase.
“Just had a call about this project and a potential change in their plan,” Cooper emailed Biesemeyer, at 12:51 a.m. Dec. 5 — 12 hours before the splashy ASM news conference.
“If they phased their buildout so Phase 1 used 200K GPD with a ramp up of 6 years and a potential phase 2 as part of a 15-year master plan that would bring them up to 424K GPD, would that make this a different project?” Cooper asked.
“Would only phase 1 work? Could phase 2 be incorporated over time?”
Responding to Cooper’s “ASTRA Water and Sewer” email near the end of Dec. 5, Biesemeyer sounded unconvinced.
“This just pushes the (water) need down the road,” he concluded.
The Progress asked ASM via its press representative for comment regarding the city’s concerns.
According to a company spokesman, “Sustainability will be a main theme with our new facility in Scottsdale. ASM will pursue LEED rating for the new facility while driving energy and water reuse programs.
“ASM is also committed to reclaimed water system improvements to further reduce use and recycling of water, and targets more than 80% reclaimed water in the new facility,” the spokesman said, adding:
“ASM’s current facility in Arizona has reduced its absolute water use by 60% from 2017 to 2022, even with substantial growth in its business activities during this period.”
Asked if he cared to clarify or update any of his ASM/Project Astra emails, Biesemeyer replied:
“The discussions with ASM have not concluded and as these communications show, major developments such as this evolve over time — preliminary concepts become more substantial proposals as they move through the process, and staff and the developer work, react, and re-work issues throughout that process.
“In this case we are working through issues related to water and wastewater at the planned ASM facility.”
The Scottsdale Water leader added he feels the Dutch company shares Scottsdale’s commitment to protect its most precious resource.
“ASM has stated they are similarly committed to responsible water stewardship,” Biesemeyer said, “and so both the city and the developer continue to work in this area to ensure this project operates within technical parameters and overall sustainability goals.”
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