By Roland Murphy for AZBEX
After canceling plans to build $550M hydrogen production hub in Buckeye last year, site owner Fortescue Future Industries is asking the City of Buckeye to eliminate one stipulation and modify two others attached to the rezoning of approximately 158 acres of the plant site.
Materials accompanying the submittal variously refer to the property as approximately 158 acres in some sections and 157 acres in others. For consistency’s sake, we will use 158.
Submitted materials and staff analysis say the 158 acres and the overall 920-acre site that surrounds it could eventually be used for an Arizona Public Service substation and a yet-to-be-announced data center project.
Site and Project History
The property near Patterson Road and State Route 85 is part of more than 920 acres annexed by Buckeye in 2010. An entity of now-bankrupt Nikola Corporation and its partner, TC Energy, bought the property in 2022 with plans to build a hydrogen production facility that would be part of the supply chain for Nikola’s hydrogen-fueled semitruck fleet. (AZBEX; Oct. 25, 2022)
Nikola, however, began running into trouble in 2020, after an investigation by Hindenburg Research uncovered fraud in Nikola’s marketing and investment statements. The Department of Justice investigated and charged founder and former CEO Trevor Milton with making false and misleading statements to investors. The company paid $125M to settle charges with the Securities and Exchange Commission in 2021, and Milton was criminally convicted in 2022.
Nikola tried to rebuild under new leadership after the scandals, but a lack of investor trust and an inability to secure new capital for its cash-heavy operations eventually dropped the company’s valuation from a 2020 high of nearly $30B down to less than $165M. The company filed for Chapter 11 bankruptcy in 2025, with cash assets of just $50M as of last August, much of which was allocated for legal fees.
Nikola announced Australia-based Fortescue Future Industries was acquiring its Phoenix Hydrogen Hub project in July 2023. Fortescue was reported to have paid $24M for the assets of Nikola’s project holding company.
To be built on 158 acres of the overall site, according to the DATABEX project database description, Fortescue’s facility was “to produce between 150 and 300 metric tons of liquid hydrogen daily to store on site before distribution. The plant will comprise two administrative buildings, a 7.3-acre liquification package, a 7.4-acre electrolyzer package and a water treatment facility.”
A ceremonial groundbreaking was held in May 2024, but actual construction never commenced. Citing U.S. policy shifts and uncertainty in the country’s green energy market, Fortescue announced last summer it was canceling the Buckeye plant plan.
After Buckeye annexed the property, the land use designation was changed from Rural to Employment. The Employment designation is still in place. The roughly 158 acres were rezoned from Rural Residential to Heavy Industrial (I-2) zoning in 2023 to allow for the plant development.
Stipulations attached to that rezoning, however, limited future industrial development to a hydrogen production facility.
The Current Request
Fortescue is now asking for the removal of the hydrogen-specific stipulations to allow a broader range of industrial development options.
According to planning action report prepared for the Buckeye Planning and Zoning Commission, “The subject modification of stipulations will allow for significant investment in information technology and electrical infrastructure and may lead to additional employment opportunities within the city of Buckeye.”
A neighborhood meeting was held in December to present the request to the public and allow project representatives and City staff to answer questions. No one attended, and, as of the writing of the staff report, staff has received no public feedback supporting or opposing the requests.
The I-2-zoned site is surrounded by part of the originally annexed 920 acres, which is still designated as Rural under the General Plan. According to the staff report, “The applicant has indicated that eventually this property will function in correlation with the subject site. At that time the greater 920-acre parcel will have to go through a Major General Plan Amendment to amend the future land use designation to Employment. Alternatively, the land use designation could be amended via the ten-year General Plan update anticipated in 2028. Beyond the land designated as rural the site is surrounded by employment on the north, east, and south, making industrial uses on the site consistent with the General Plan land use designations for the surrounding area.”
It goes on to outline the substation and data center vision by saying, “The applicant team has an active site plan in review for an APS substation on the subject property. The applicant has indicated that the eventual development of the site is likely to include a data center campus, which is what the substation will primarily serve. As of writing this staff report there have not been any additional plan submittals for data centers on the site. A data center is allowed as a conditional use within the I-2 zoning district and would require Conditional Use Permit (CUP) approval by the Planning and Zoning Commission and administrative site plan approval. Expansion of the data center use, or any industrial use, beyond the subject 157 acres will require additional rezoning of the surrounding property in conjunction with or following the General Plan Amendment.”
Buckeye Planning staff has recommended approval of the request to modify the existing stipulations and has proposed additional new ones. These are relatively standard and include fire protection systems, access and egress, and other traffic and transportation requirements.
The Buckeye Planning and Zoning Commission will hear and vote on the requests this week. They will then advance to City Council for a final vote.
Any administrative site plan and conditional use permit requests for the possible future data center would go to the Planning and Zoning Commission as a separate matter at some point.