Memphis City Council members finalized several high-profile real estate transactions during their Tuesday, March 18, meeting, including the transfer of $80 million to the Memphis and Shelby County Sports Authority to begin repairs at the FedExForum.
However, a much smaller land sale sparked public opposition and mistrust during the meeting.
Land sale to xAI
Council members voted 9-1-1 to approve the sale of 13 acres of city-owned land at 2685 Plant Road to artificial intelligence company xAI for $820,000. The land is part of a larger 65-acre parcel the city purchased for $200,000 several years ago.
The property is designated for a wastewater treatment facility. Greywater produced at the plant will be used to cool the nearby xAI data center, which currently uses aquifer-drawn city water.
A deal with the Tennessee Valley Authority (TVA) to provide 150 megawatts of electricity to the data center was signed in 2024.
“They are using seven million gallons of water a day and are competing with Buxton, Westwood and Mallory Heights during extreme weather events. They need a lot of water to power their electricity,” said Sarah Houston, executive director of Protect Our Aquifer. “So this could be a solution for the data center that is already up and running in 38109.”
Protect Our Aquifer, a nonprofit, was involved in efforts to block an oil pipeline set to run through South Memphis. The project was canceled in 2021.
Still, the skepticism surrounding xAI and its founder, Elon Musk, was acknowledged.
“We absolutely understand the community resistance to doing any business with xAI and Elon Musk. We acknowledge that,” said Houston.
With an estimated net worth of $328 billion, Musk is the wealthiest man in the world. In addition to xAI, he owns electric vehicle maker Tesla and the SpaceX space technology company. However, his recent role as a government waste watchdog has raised growing doubts.
Musk manages the newly created Department of Government Efficiency (DOGE) office for the Trump administration. In its short existence, the office has fired thousands of government workers in an effort to trim trillions from the federal budget. Despite little time for thorough investigations, few departments have been spared, including foreign-aid agencies and the FBI.
The office claims to have uncovered “billions” in waste and fraud, but no evidence has been presented, and no charges have been filed.
Critics of the land deal echoed similar sentiments to those of DOGE’s critics. They felt the process was rushed. Little public discussion had been held, leaving too many unknowns, particularly for nearby communities that could be affected.
“They have questions, and they have the right to have questions. They have the right to have them answered. Not after the fact, but before the fact. They live in that community,” said council member Yolanda Cooper-Sutton.
Voting in favor of the resolution were council members Chase Carlisle, Jerri Green, Michalyn Easter-Thomas, Philip Spinosa, Jana Swearengen Washington, Pearl Eva Walker, Jeff Warren, Janika White and Chairman J. Ford Canale.
Cooper-Sutton was the only no vote. Rhonda Logan abstained.
Funding allocated for sports arena
Meanwhile, with the passage of the $80 million funding resolution, an estimated $530 million in renovations and repairs can begin at the FedExForum. The first round of funding will go toward “deferred maintenance” at the 20-year-old arena, which is home to the Memphis Grizzlies NBA franchise and also hosts concerts and other events.
Council members unanimously agreed to the transfer.
During the consent agenda vote, council members also approved a 0.5% increase to the city’s hotel-motel tax on its first vote. If it passes a third and final vote, the rate would rise to an even 4.0%. The revenue from the tax would help fund the renovations. Consent agenda items only require a voice vote for approval.
Another $230 million could be available from $350 million the state set aside for various stadium funding projects in 2023. The city allocated $120 million for renovations to Simmons Bank Liberty Stadium, where the University of Memphis football team hosts games.
