By Julie Lee and Katherine Lin | Originally published by Mississippi Today
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With residents suing over noise and pollution, Elon Musk’s company is trying to buy up homes around his expansive data center operations in Southaven.
A few owners have rejected the offers while others are contemplating it or have decided to take the buyout. But some renters believe they’re being left behind.
This is the latest development in over a year of tensions between Southaven residents and SpaceXAI, formerly xAI, as the $2-trillion company continues to expand its data center presence in the greater Memphis area. Some residents are opposed to the project that has resulted in noise and pollution complaints, multiple lawsuits and frustration on the part of locals and city officials.
Residents living near SpaceXAI’s power plant in Southaven have reported receiving offers to buy their homes from MZX Tech LLC, a subsidiary of SpaceXAI.
In a letter that some residents received, Burch Realty Group, a local realtor that claimed to be working on behalf of MZX Tech, offered to buy their house in exchange for “among other things, a release of all claims” related to the class action lawsuit brought by a group of Southaven residents against SpaceXAI.
The litigation is over noise created by the company’s temporary gas turbines, and plaintiffs seek a court order to reduce the “near-constant noise, vibrations, and other nuisance-level harms.” They seek financial compensation for the disruption they say has been ongoing for over a year.
Class action eligibility boundary proposed by lawyers representing residents bringing a class action lawsuit against SpaceXAI. The area is defined as “Stateline Road West to the North; U.S. Highway 51 to the East; Nail Road to the South; and a vertical boundary line to the West that is 1 mile West of Hom Lake Road.” The judge has not yet ruled on whether to accept these boundaries. (Credit: Google Earth and Airbus, modified by Julie Lee/Mississippi Today)
Anyone living in the affected area, including renters, are eligible for the class action, said Robert Wiygul, one of the attorneys representing residents.
Cushman & Wakefield, not mentioned in the letter, is another realty group that has made at least one buyout offer to local homeowners.
A representative from Cushman & Wakefield referred Mississippi Today to SpaceXAI and a representative from Burch Realty Group could not be reached for comment.
Mississippi Today spoke to several homeowners, who were reluctant to speak on the record or share details of the offers they received.
The NAACP is bringing a separate case against SpaceXAI over the same turbines, which it claims violates the federal Clean Air Act. State and local officials have said the company has not broken any state or local laws, and the federal government has said the company’s operations are vital for national security.
In the letter to Southaven residents, MZX Tech “denies all of the allegations against it” and says it “requires property for business purposes.” The company did not disclose what business purposes it intends to use the houses for.
However, in an Oct. 1 blog post, Southaven Mayor Darren Musselwhite said in addition to improving public perception, the buyout serves the purpose of acquiring homes for SpaceXAI employees. The project is expected to create hundreds of new jobs in the area and attract new residents.
The surge in construction is already bringing jobs and increased traffic. Residents report that surrounding parking lots are filled to capacity with employees’ cars and that privately chartered buses are routinely travelling to and from the site.
SpaceXAI is currently hiring for at least 160 jobs based in the Memphis area, according to its job board.
SpaceXAI did not respond to a request for comment. But in August, the company wrote on social media, “We don’t just build in Memphis – we live, work and invest here. We are committed to being good neighbors and responsible partners.”
A letter from MZX Tech LLC, a subsidiary of SpaceXAI, that residents living near SpaceXAI’s power plant reported receiving. The letter offers to buy their homes “in exchange for, among other things, a release of all claims” related to a class action lawsuit against the company.
If you’ve been impacted by the SpaceXAI buyouts, Mississippi Today is interested in hearing your story. You can email Julie Lee at jlee@mississippitoday.org.
Mayor says purchase offers are good corporate citizenship
In response to media coverage of the buyout, Southaven Mayor Musselwhite addressed the news directly his recent blog post and at a Board of Aldermen meeting on Oct. 6.
“This buyout is not to say, ‘Well, scrap that. We can’t stop the noise.’ No, that’s still number one.” Musselwhite said at the meeting. He said that SpaceXAI has accelerated its plans to convert the louder, temporary turbines to permanent ones that are “much more quiet.” The buyout is instead a “parallel approach” to “eliminate negative impact or perception of negative impact” and “has been part of a comprehensive plan for many months,” he wrote in his blog post.
“I told them that this should be part of your goodwill to the community, part of your being a good corporate citizen,” he said at the meeting. “Whether it is or it isn’t, if they view it as a negative, give them an option to sell.”
Musselwhite claimed media had needlessly alarmed people and stirred up controversy by sharing what he called misinformation that the company was forcing people out of their homes.
“Nobody is being forced to be bought out,” Musselwhite said, calling coverage “slanted” and “false.”
“It’s totally voluntary,” he said.
As for renters, Musselwhite said that on any given day renters are at risk of being asked to move. “That’s nothing new. It has nothing to do with any development in Southaven.”
What about renters?
Danielle Dillard, 37, a renter who lives less than a mile from the power plant, disagreed. “If this wasn’t happening, my landlord wouldn’t have said a word. And even if he did, he definitely wouldn’t have given me 60 days’ notice,” she said. “And it wouldn’t be happening to multiple people because multiple homeowners don’t just decide to sell houses at the same time.”
Danielle Dillard, 37, shown with her children, rents a house in Southaven less than a mile from SpaceXAI’s power plant. Dillard was told she had 60 days to move out after her landlord took a buyout. (Credit: Courtesy of Danielle Dillard.)
In late September, Dillard learned that her landlord took the buyout offer. He told her she had 60 days to move out, she said. She had just signed to extend her lease a month before.
Dillard had seen news of the buyout—“I sent it to my friend, and I was like, this is crazy”—but didn’t think it would apply to her.
Dillard’s landlord offered to move her into a different home, she said, but it was 25 minutes away and wasn’t comparable to her current home. Dillard has four kids, three of whom are school-aged and live with her.
Neither her landlord nor SpaceXAI has offered to cover her moving expenses, Dillard added. She said she emailed SpaceXAI asking if there was anything they were offering renters, but never heard back.
Dillard still has not found another place to live.
One-third to two-thirds of the Southaven and Horn Lake neighborhoods in the class action area are occupied by renters, according to 2020-2024 census estimates. In Mississippi at large, about a quarter of households are occupied by renters versus about a third nationwide.
Under Mississippi law, neither landlords nor tenants are allowed to end an active, fixed-term lease early, unless the contract has an early termination clause or parties voluntarily agree to end the lease early, according to lawyers Mississippi Today spoke with.
Tenants “can’t just automatically be kicked out at the landlord’s whim, or because the landlord found some other more lucrative offer,” said Sam Buchanan Jr., executive director of the Mississippi Center for Legal Services Corporation. Tenants have the right to see their lease through, unless the landlord has a reason to evict them based on a “material breach” of the contract.
Dillard’s lease did not contain a termination clause, but her landlord sent her an “agreement to vacate property” that she said she didn’t know she had any option but to sign.
“It was never optional,” she said.
Buchanan Jr. recommends that before renters signing an agreement they may not fully understand, that they first seek out an expert for an independent opinion.
Robert Wiygul, the attorney representing plaintiffs in the lawsuit against SpaceXAI, urged people considering an offer to weigh their options carefully.
“For every individual, they have to look at whether a buyout is going to actually make them whole for what they’ve lost,” he said.
Jen Jenkins of The New York Times contributed research.
