Malaga infrastructure buildout continues with $12.2 million water project

MALAGA — The Chelan-Douglas Regional Port Authority on Tuesday approved a $12.2 million water infrastructure project that officials say will expand water capacity and fire-flow capability in the Malaga area while supporting future growth.

Commissioners unanimously approved awarding the Wallace Road Transmission Water Mains and Reservoirs Project to Midway Underground LLC for $10.9 million and established a total project budget of $12.19 million.

The project includes new transmission water mains and reservoir improvements and is expected to continue into 2027.

Port Director of Economic Development and Capital Projects Stacie de Mestre said the project is the third of four major Malaga-area water projects scheduled this year. Five bids were received, with Midway Underground determined to be the lowest responsive bidder following review by RH2 Engineering.

Unlike many public infrastructure projects, the work is being funded through a private development agreement rather than local taxes. 

The Wallace Road project is being funded through Microsoft's agreement with the Port, continuing a series of utility and infrastructure investments associated with the company's ongoing data center development in the Malaga area.

Among the most visible of those investments is the Jumpoff Ridge Substation, an approximately $86.5 million electrical infrastructure project constructed to support growing power demands in the area. The current water improvements represent another major investment in utility capacity, this time focused on water delivery, storage and fire protection infrastructure.

Port CEO Jim Kuntz said the project's benefits extend beyond Microsoft's immediate needs.

"This will add water capacity for more workforce housing in the Valley area that would not be possible unless you had fire flow," Kuntz said.

According to de Mestre, the Wallace Road project remains below the amount originally allocated under Microsoft's development agreement. The agreement included approximately $13.5 million for the project, while the approved budget totals just over $12.19 million.

De Mestre said lower-than-expected costs on Malaga-area projects have created opportunities to incorporate additional improvements requested by the local water district into the final phase of construction.

Project costs are expected to be split between 2026 and 2027, with roughly $6 million budgeted in each year.

Commissioners approved the contract award without opposition.

Andrew Simpson: 509-433-7626 or andrew@ward.media