Oro Valley panel backs ban on 'hyperscale' data centers, adds tougher reporting

Oro Valley panel backs ban on 'hyperscale' data centers, adds tougher reporting

ORO VALLEY, Ariz. — The Oro Valley Planning and Zoning Commission on Tuesday, Oct. 27, voted 4-1 to recommend zoning code changes that would ban data centers using 20 megawatts of power or more. The changes would also end by-right approval for smaller data centers and require them to report energy and water use every year with no end date.

The recommendation now goes to the Town Council, which initiated the amendments to chapters 23, 25, 27 and 31 of the zoning code. Commissioner Sandra Wilson cast the lone no vote during a roll call.

Before voting, the commission changed two parts of staff's proposal. Staff had proposed that data centers report energy use annually for five years and then on request. The commission instead required annual reporting in perpetuity. It also shortened the town's planned review of the code from every five years to every two years.

What the code would do

Staff said the current code allows data centers of any type and size in commercial and tech park zones and does not regulate their energy use, water use or noise. If a data center application came in, staff said, it would legally have to be approved once it met code.

The town has not received any requests to build a hyperscale data center and does not expect any, staff said. But staff said vacant land in Innovation Park and redevelopment sites elsewhere in town are as large as a data center campus approved in Phoenix's Ahwatukee area on just 38 acres. That campus's developer, Menlo Digital, says it can supply more than 250 megawatts.

Under the proposal:

• Data centers needing 20 megawatts or more would be prohibited. Power would be calculated across individual parcels or multiple interconnected parcels or buildings that form a campus. A larger facility could still be allowed through a rezoning to a planned area development, which requires neighborhood meetings, two commission hearings and council approval.
• Data centers under 20 megawatts would need a conditional use permit and would be reviewed case by case.
• Data centers could not use potable water for cooling or humidity control unless the council approved it through the conditional use permit. Operators would have to disclose water use and use a cooling system that conserves water and minimizes waste.
• Operators would have to conduct noise studies at submittal, before receiving a certificate of occupancy, and annually for five years or at the planning and zoning administrator's request after that. Backup generators would have to face away from homes, be tested only during the day and be used only for testing or emergencies.
• Data centers would have to sit at least 250 feet from residential areas and 500 feet from public parks and schools. Those are the same distances the town uses for drive-throughs.
• Server rooms that support an existing business, such as those at Town Hall or Roche, would remain allowed as accessory uses.

Staff said one megawatt is roughly the power used by a grocery store or 1,000 homes, so 20 megawatts equals about 20,000 homes. Because data centers do not disclose water use, staff estimated it at 72,000 gallons per day per megawatt, compared with about 226 gallons per day for a home.

A staff member said the 20-megawatt cutoff was "purely by judgment." The figure matches the city of Tucson's definition, which Pima County is also considering. "There's no magic to that number," the staff member said.

Staff also recommended that the council separately consider an ordinance regulating all large water users, such as battery, chip and solar manufacturers. That effort would be led by the water utility director.

Water concerns

Water Utility Director Peter Abraham said the town uses about 4 million to 5 million gallons a day from November through February and 7 million to 8 million gallons a day in summer. A single user needing 2 million gallons a day would be "a lot for" the town, he said, and none of his models account for a user that large.

The community now pays roughly $400 per acre-foot of water, Abraham said, and future supplies could cost double that or even $1,000 per acre-foot. He said a large water user code could tell such users that "you can come, but you have to bring your water with you."

Split over an outright ban

Wilson questioned whether any standalone data centers belong in Oro Valley. Wilson noted they employ few people after construction, generate little or no sales tax and would take up commercial land. "I don't know why we would permit any data centers," Wilson said.

Chair Anna Clark called an outright prohibition "a very, very bad idea." Clark argued that companies may need more data capacity than a server closet and could look elsewhere.

Commissioner William Thomas said existing employers in the Tucson area will need extensive data processing and storage. Thomas favored limiting the facilities rather than banning them. Thomas also suggested a 10-megawatt cap would be more appropriate for Oro Valley. The commission discussed lowering the threshold but kept 20 megawatts in the final motion.

Commissioner Philip Zielinski raised concerns about low-frequency noise and local heat island effects. Zielinski noted the town has about 24,000 homes and about 2,500 units of remaining residential capacity. Most of the data centers staff cited would draw more power than all of those future homes combined, Zielinski said.

Another commissioner asked whether the rules were so strict that no one would build a smaller data center. Staff said the requirements are fairly standard across the state and pointed to Mesa, which requires data centers to disclose water use.

Closed-door legal advice

Clark asked Town Attorney Steven Zraick what the legal implications would be of prohibiting a use the code now permits. Zraick said "I'd rather not" give legal advice from the dais. A first motion to go into executive session failed 3-2, with one commissioner saying other questions should come first. A later motion passed, and the commission met privately for about 20 minutes before voting 5-0 to return to open session.

During the public hearing, the sole speaker was a program manager with the Coalition for Sonoran Desert Protection who lives in Tucson. The speaker supported the amendments and urged several additions: environmental review before conditional use permits are approved, combined review of related parcels and phased expansions when applying the energy threshold, baseline noise measurements, and clarification of the planned area development exception.

Also discussed:

• The commission's next meeting will be Nov. 10, moved from its usual first-Tuesday date because of the election. Agenda items include an applicant's request to amend the town's recreational marijuana zoning code and a public hearing on a rezoning and conditional use permit for a proposed family gym on Oracle Road.
• A second neighborhood meeting is set for Oct. 29 on a proposed general plan amendment to allow residential use on an open space-zoned parcel near Town Hall.
• Staff said the commission now has three openings. Clark, whose term ends in January, said eight years of service to the town had been "a delight."

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 7:58 PM MST on October 27, 2026. Read more about how this is made.