Oro Valley bans standalone data centers, sets aside permit approach for now

Oro Valley bans standalone data centers, sets aside permit approach for now

ORO VALLEY, Ariz. — The Oro Valley Town Council voted 7-0 Wednesday, Oct. 28, to adopt a zoning code amendment that eliminates standalone data centers from the town's zoning districts. The council set aside a Planning and Zoning Commission recommendation that would have allowed some data centers through a conditional use permit.

The vote on Ordinance No. (O)26-14 came during a 10-minute special session that adjourned at 6:10 p.m. All seven council members were present, and Mayor Joseph C. Winfield presided. The ordinance amends Chapters 23, 25, 27 and 31 and other applicable chapters of the zoning code.

Vice Mayor Melanie Barrett made the motion after Winfield turned the floor over to her. It called for adopting the code amendment that eliminates standalone data centers. "Ancillary uses shall still be allowed, which was the intent of the existing code," the motion said. It also said future councils may choose to study power generation, water usage, noise, environmental impact and the overall benefit to residents to decide whether a conditional use permit or another process should be adopted. The council did not discuss the motion before voting.

Winfield said he and Barrett brought the issue to the council about three weeks earlier. He said the council intended a two-step process: first a ban on data centers, then a more thorough analysis of the topic.

The Planning and Zoning Commission voted 4-1 on Oct. 27 to recommend a ban on data centers using 20 megawatts of power or more, with smaller data centers reviewed case by case through a conditional use permit. Winfield said he listened to that meeting. He said the commission's work amounted to the second step rather than the first. He praised staff for producing the information quickly but said the work needs to continue.

Winfield cited the town's limited remaining employment land, its water conservation priorities and potential demands on electric infrastructure. He said the town's goal should be to accommodate appropriate economic development without compromising resources and community character.

Two people spoke during the public hearing, and both urged the council to go further than the commission's recommendation.

Council member-elect Rosa Dailey, who takes office Nov. 4, spoke first. Dailey said the commission's conditional use permit approach "does not go far enough." Dailey urged the council to ban all standalone data centers of any size that support the remote infrastructure of artificial intelligence, while still allowing ancillary data functions tied to existing businesses.

"We do not want to expand our code to give the signal that we are in the data center business," Dailey said.

Dailey said such enterprises are "cloaked in opaque business structures and wrapped in nondisclosure agreements," making it nearly impossible to assess their effect on community resources. Dailey said the town gains no direct benefit because Oro Valley does not levy a property tax. The only economic benefits, Dailey said, are temporary construction sales tax and a 4% utility tax, "our smallest source of revenue." Dailey added that data centers would occupy commercial and tech park land that could otherwise generate sales tax and jobs.

A resident of 27 years also asked the council to prohibit all data centers except ancillary uses. The resident said the town should watch how surrounding jurisdictions that allow data centers fare before reconsidering. If the council did follow the staff and commission recommendations, the resident asked for several changes:

• a ban on large and mid-scale data centers using 10 megawatts of power or more
• removal of the by-right allowance for standalone data centers using less than 10 megawatts
• a prohibition on nondisclosure agreements

"If they can't come in with full transparency, they don't belong here," the resident said.

Earlier in the session, the council voted 7-0 on a motion by Winfield, seconded by Barrett, to proceed "as directed in executive session." That item concerned the Board of Adjustment's Oct. 5 decision on two appeals of an Aug. 21 zoning interpretation. The interpretation defined the term "sanatorium" and determined how it applies to senior care uses. The council met in a closed executive session before the public meeting to consider whether to appeal the board's decision and to discuss other options. The direction given to the town's attorneys and staff was not disclosed in open session.

This report was drafted by Claude Opus 5.5 from a live transcript produced by Deepgram Nova-2, then reviewed and edited by Nicholas De Leon with Claude Opus 5.5, and published at 8:02 PM MST on October 28, 2026. Read more about how this is made.