Scottsdale to explore additional safeguards for data centers

Scottsdale will explore potential safeguards for data centers following an Oct. 20 City Council study session examining how the facilities are regulated and what larger developments could mean for the community.

Council directed the city attorney to return with regulatory options, including measures addressing water use, noise and safety. The discussion did not establish new development requirements.

Scottsdale has two existing data centers, operating since 1999 and 2000. Staff described both as modest in size and utility demand compared with the large facilities being developed elsewhere. No new data center applications are pending, and economic development staff reported no current discussions with prospective developers.

Data centers house computer servers and equipment that store, process and transmit digital information. They also require cooling systems, electrical infrastructure and backup power.

Planning and Development Services Senior Director Erin Perreault explained that the use itself is familiar, but the size and intensity of newer facilities have changed significantly as demand grows for artificial intelligence, cloud computing and other digital services.

That growth has prompted communities to examine potential effects on water supplies, electrical capacity, emergency response and neighboring properties.

Current rules cover industrial development

Scottsdale’s zoning ordinance does not specifically define data centers. Instead, they fall within the broader category of “data processing, hosting and related services,” permitted in the city’s Industrial Park and General Industrial zoning districts.

Those districts are primarily in the Scottsdale Airpark.

Facilities must comply with applicable zoning, development review, building and fire requirements. Existing standards address matters such as building height, setbacks, equipment screening and site design, but do not distinguish between smaller data centers and large campuses.

Scottsdale does not currently require a conditional use permit specifically for data centers.

Land and utility needs limit potential sites

Economic Development and Tourism Senior Director Kevin Burke said the land and infrastructure needed for large data centers help explain why developers have focused on other communities.

“We simply don’t have the site availability that some of the other communities across the region have,” Burke said.

Staff noted that Scottsdale’s existing facilities have electrical capacities of approximately 5 and 15 megawatts. By comparison, newer hyperscale facilities can require 200 megawatts or more.

Water demand varies depending on a facility’s size, cooling technology and operations.

Potential next steps include reviewing approaches used by other communities, coordinating with city departments and utility providers, and determining what Scottsdale can regulate under applicable law.

Any proposed requirements would return for further council consideration.