a company plans to build new data center in north Denver will no longer seek a $9 million tax break from the city after the proposed deal raised questions among City Council members over water and energy use.

Main site will still build the data center in the Elyria-Swansea neighborhood – but without reaching a tax refund agreement with the city, company spokeswoman Megan Ruszkowski confirmed in an email Wednesday. The statement left open the possibility of the company requesting the city’s support for future phases of the project.

The Denver-based company had applied for the incentive with the Denver Economic Development and Opportunities (DEDO) office. It negotiated a deal that would have returned to CoreSite half of all sales and use taxes associated with the new data center, up to $9 million.

“While this will have a significant impact on the project’s finances, CoreSite will move forward with Phase 1 of the project,” Ruszkowski said. “CoreSite believes it will demonstrate both community benefits and financial/economic benefits to the city.”

DEDO representatives presented the proposal to a council committee in august and They received more than an hour of questions about the impacts of the project on the environment and the surrounding community. Council members questioned whether the city should incentivize a project that would use large amounts of water and energy amid efforts to improve the efficiency of the city’s water and energy use.

Once completed, the facility’s energy needs would peak at between 65 and 75 megawatts, enough energy to power approximately 82,500 homes. The facility would also consume a maximum of 805,000 gallons of water per day to cool its systems. That’s the same as the average daily indoor water use of 16,100 Denver residents.

However, the facility’s average daily water and energy use is expected to be well below maximums, company representatives previously said. A typical CoreSite data center consumes less than 50% of its total capacity and has never had customers using the full capacity of a facility.

Council members on the Business, Arts, Workforce, Climate and Aviation Services Committee twice postponed voting on the deal, which needed full council approval.

CoreSite will now focus on finalizing the site development plan, obtaining a building permit and building the first phase of the project, Ruszkowski said. The company purchased the property at 5050 Race St., near the National Western Center, in 2022.