Scottsdale's city attorney will draft new regulatory options for data centers after City Council directed staff to explore safeguards covering water use, noise and safety.
The direction came out of a Tuesday, Oct. 20 study session, according to the city. No new rules were adopted. The council asked the city attorney to return with options for further consideration.
No data center applications are pending in Scottsdale, and economic development staff reported no current discussions with prospective developers. The city has two existing data centers, both operating since 1999 and 2000, that staff described as modest compared with the large facilities being built elsewhere in Arizona.
The council wants rules on the books before a developer applies.
Why now
Planning and Development Services Senior Director Erin Perreault told the council that while data centers are a familiar use, the size and intensity of newer facilities have changed significantly as demand grows for artificial intelligence, cloud computing and other digital services.
Scottsdale's two existing facilities draw roughly 5 and 15 megawatts of electricity, according to city staff. Newer hyperscale data centers can require 200 megawatts or more.
The city's zoning ordinance does not specifically define data centers. They fall under the broader category of "data processing, hosting and related services," permitted in Industrial Park and General Industrial zoning districts, primarily in the Scottsdale Airpark. Scottsdale does not require a conditional use permit for data centers.
Existing standards cover building height, setbacks, equipment screening and site design but do not distinguish between a small server room and a sprawling campus.
Limited land, big demand
Economic Development and Tourism Senior Director Kevin Burke said the land and infrastructure needed for large data centers 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.
Water demand varies by facility size, cooling technology and operations, staff noted.
Other Arizona cities already acting
Scottsdale is not the first Arizona city to take a closer look. Tucson's City Council voted 6–1 on Aug. 5 to require rezoning for any data center over 25,000 square feet or 20 megawatts, according to the city of Tucson. Those rules, effective Sept. 4, include a half-mile buffer from homes and schools, noise studies and water and energy-mix disclosure.
Peoria's council directed staff to pursue a zoning code amendment requiring a special use permit for data centers, GovTech reported. The Arizona Legislature also approved a three-year moratorium on tax incentives for data centers, which Gov. Katie Hobbs signed, according to GovTech.
What comes next
Scottsdale staff will review approaches used by other communities, coordinate with city departments and utility providers, and determine what the city can regulate under state law. Any proposed requirements would return to the council for further consideration.
