Using Moratoria to Develop Data Center Regulations

In October, Cleveland City Council extended the city's moratorium on new standalone data centers and expansions of existing facilities through January 29, 2027. This extension provides officials with additional time to develop permanent regulations for an industry that can place substantial demands on electricity, water, and other infrastructure, according to Cleveland.com.

Cleveland's Approach to Data Center Regulation

The initial moratorium, approved in July, was set to expire in October. Councilman Brian Kazy stated, "We're really trying to get this right," indicating that the council and administration were not yet prepared to introduce permanent legislation (Cleveland.com). Councilman Charles Slife noted that Cleveland's zoning code has not kept pace with the data center industry's growth, often treating these facilities as an accessory use rather than large, standalone structures with significant utility requirements (Cleveland.com).

The moratorium prevents the city from reviewing or issuing permits for new standalone data centers or expansions of existing ones. Existing data centers, of which Cleveland has about two dozen, can continue operations. Permits filed before the moratorium took effect are reviewed under the previous rules (Cleveland.com).

Councilman Mike Polensek questioned whether existing data centers had generated complaints regarding noise, air quality, water use, or electricity. A senior policy adviser, Kate Nielsen, indicated she was not aware of specific nuisance complaints and noted the city cannot obtain direct electricity-use data from FirstEnergy (Cleveland.com). Polensek expressed opposition to large "mega centers" but did not want to deter existing businesses that have not caused issues (Cleveland.com).

Kazy highlighted that existing data centers are not subject to specific city regulations concerning zoning, utility use, noise, or other potential impacts. Developing these rules is a key objective during the extended moratorium (Cleveland.com). To aid this process, the city has formed a Data Center Working Group, comprising industry experts, utility representatives, residents, business and nonprofit leaders, and city officials. The council and administration are also studying data center regulations from other areas (Cleveland.com).

Strategies from Companion Communities

Other communities have also implemented moratoria or are considering new regulations to address data center development:

• Grand Junction, CO: The City Council approved an ordinance blocking development and pre-development steps for large data centers for up to a year. This action mirrors a resolution passed by Mesa County and similar considerations in Fruita. Building regulators aim to use this time to develop requirements for these structures, which can have significant impacts on water, energy, light, and noise (The Grand Junction Daily Sentinel). The moratorium applies to data centers with a projected electrical load of one megawatt or more. Local governments are collaborating to ensure consistent planning and zoning regulations (The Grand Junction Daily Sentinel). A poll by Magellan Strategies indicated that 82% of Colorado voters opposed data centers in their own cities or towns, citing concerns about water conservation, electricity rates, heat, noise, and light (The Grand Junction Daily Sentinel).
• South Elgin, IL (Lake County): The Lake County Plan Commission tabled an amendment to its Unincorporated Lake County Unified Development Ordinance that would change the definition and regulation of data centers (Chicago Tribune). The proposed amendment would define data centers, list them under the "wholesale, distribution and storage use category," prohibit them in business zoning districts, and make them a special exception use in M-1 light industrial zoning (Chicago Tribune). It also includes supplemental regulations requiring detailed applications, such as site plans, construction schedules, emergency vehicle access routes, proof of adequate electric capacity from NIPSCO, water management plans, thermal and microclimate analyses, liability insurance, and noise studies (Chicago Tribune). Commission members expressed concerns about enforcement and the need for clear, reasonable standards, suggesting a consultant review the changes (Chicago Tribune).
• Edmond, OK: City officials are considering data center rules that would limit daily water use and require developers to pay for infrastructure upgrades. This comes as the city's moratorium on data centers is set to expire in December (The Journal Record). The draft plan also includes screening backup generators behind sound walls. No data center applications have been filed, and council members discussed extending the moratorium to refine the plan (The Journal Record).

Unresolved Questions

While communities are actively working to develop comprehensive regulations, several aspects remain under consideration:

• The precise scope and enforceability of new regulations, particularly concerning water usage and environmental impacts.
• The balance between attracting economic development and mitigating potential negative impacts on local resources and quality of life.
• The effectiveness of inter-jurisdictional collaboration in creating consistent and effective data center policies across regions.
• The long-term implications of treating data centers as a distinct land use category rather than an accessory use, and how this will shape future development.