data center

When a county judge put the brakes on what would be the largest data center in California, ruling the whole project needed extensive environmental review, Kristian Salgado was relieved.

The community organizer lives in Imperial County, where the nearly one-million-square-foot facility was proposed. The rural county near the Mexico border struggles with bad air pollution and has one the state’s highest rates of asthma hospitalization for kids, according to the National Institute of Environmental Health Sciences. One of Salgado’s nephews lives right next to the site and struggles with the respiratory disease.

“It just seemed very unusual that a project of this scale, with that many backup generators could be permitted without requiring any further [analysis] of what that would mean for residents,” she said.

Now, Salgado and others who share her concern believe Proposition 45 on the November ballot could roll back their wins. The initiative changes the California Environmental Quality Act, or CEQA, a law intended to inform decision makers and the public about a project’s possible environmental impacts — and mitigate them to the extent possible.

Supporters say Prop 45 will speed up environmental review for essential housing, transportation, water, health, education and other projects, cutting costly delays and passing the savings on to consumers. Opponents say it not only weakens environmental protections for many developments, but will cover potentially polluting ones — including data centers. The Yes on 45 campaign forcefully rejects the data center claim, but independent legal experts are divided.

At the heart of the debate is the definition of one of the categories covered by Prop 45: “broadband internet access projects” or “mass-market retail service … that provides the capability to transmit data to, and receive data from, all or substantially all internet endpoints.”

Dan Dunmoyer, president and chief executive of the California Building Industry Assn., which supports the proposition, was adamant: “We specifically excluded data centers” when crafting the measure.

Yet the proposition expressly names certain excluded projects: nuclear energy, high-speed rail, jails and Delta conveyance facilities. Data centers aren’t among them.

Dunmoyer maintains that even if they’re not explicitly listed, data centers just don’t fit the measure’s definition.

In a Daily Journal op-ed, Rachelle Chong, a former Federal Communications Commission member, similarly argues that the definition refers to internet access bought from a provider like AT&T or Comcast. “A conventional data center ordinarily performs an entirely different function,” she wrote, arguing data centers aren’t in play.

But land use attorneys Matthew McKerley and Richard Frank, in another op-ed, say many modern data centers fit the bill because they house equipment used to transmit consumer data to and from the internet.

They also highlight conspicuous campaign finance contributions, including $250,000 from Prologis, which developed two data centers in San Jose.

Ethan Elkind, director of the climate program at UC Berkeley Law, said data centers will argue they fit the definition — and then it will be up to the courts to decide.

“Anyone telling you that it’s definitely not going to be data centers, they cannot read the future,” he said. “The way they’ve written the language, they can’t provide 100% assurance.”

Eric Biber, a UC Berkeley law school professor with expertise in environmental law, pointed to language in the measure requiring it to be interpreted broadly “to afford the fullest possible weight to the interest of, and the approval and realization of, essential projects.” In a blog post, he called it “a thumb on the scale” that could lead courts to conclude that projects should be covered when their eligibility is in doubt.

But Ryan Thomason and J. Scott Miller, partners at the law firm Mitchell Chadwick with CEQA expertise, think it’s likely courts would rule otherwise. In an article, they note that the definition used in the measure hews closely to another section of California law, which distinguishes providing internet services from offering content, services and applications online. “Courts generally interpret identical language in related statutes to have the same meaning,” they write.

Dunmoyer, of the California Building Industry Ass., stressed that the measure doesn’t overthrow local zoning rules.

Opponents are “making it sound like in your backyard will be a data center,” he said. “Well, that doesn’t happen at all by this initiative. That has to happen by a county board of supervisors voting to put a data center in your backyard. And if they decide to do that, this initiative does nothing to expedite that CEQA review.”

But what if local officials run afoul of their constituents? In the case of the Imperial Valley Data Center Campus, the roughly 75 acres of unincorporated land where it would go had already been zoned for data centers. As a result, county officials said they had the power to move forward with the facility for artificial intelligence computing infrastructure without city approval.

They granted the project an exemption from the state environmental review.

Then came the backlash. Residents spoke out at public meetings, rallied on the streets, circulated a petition and formed a community organization. The city of Imperial and the Sierra Club sued. In the wake of the outrage, the county walked back its decision, declaring a moratorium on data centers. (The developer sued the county over the ban, and the county recently rescinded it following a court order.)

If Prop 45 passes — and data centers are covered by it — Eric Biber, of UC Berkeley Law, told The Times that such a moratorium wouldn’t be possible. That’s because the measure prevents state and local officials from changing the rules for a project once its application is submitted, he said. So if a community didn’t have a moratorium in place and its zoning laws allow a data center, “They’re done,” said. Existing bans aren’t expected to be affected.

Attorneys for the No on Prop 45 campaign argue that it could have real-world impacts for the Imperial Valley facility, saying the developer could claim the new rules apply. For instance, the measure would prevent courts from overturning approvals of qualifying projects because of CEQA violations. Courts would only be able to halt the affected portion of the project while the issue is fixed.

Sebastian Rucci, principal developer of the Imperial Valley data center, said he will fight for his project to move forward and that there’s an environmentally sound way to do it. He said he’s willing to negotiate and mitigate where necessary — but will not go through the CEQA process. If push comes to shove, he said he’ll move the project elsewhere. California could “get in the game” or be left in the dust, he said.

Imperial Valley Computer Manufacturing, the company behind the project, says it will create at least 100 permanent jobs and generate $28.7 million in annual property tax revenue.

CEQA requirements “are not about the environment,” Rucci said. “They may be for some, but they’re not for many. For many, they are about killing things.”

BOULDER CITY, Nev. — Janelle Sorenson loves the clear night skies in Boulder City, less than an hour’s drive from the bright lights of the Las Vegas Strip. It’s a small, quiet town, and she thinks an artificial intelligence data center would ruin the community and scar the desert landscape.

So over the summer, she joined with other residents to successfully oppose plans for one of the giant computing warehouses that have popped up around the country.

But their victory was short-lived. The developers withdrew their application and instead sought adjacent land owned by the federal government — and the U.S. Bureau of Land Management signed off.

“Not only did we not get to decide anything or have a say,” Sorenson said, “we were just really kept in the dark.”

The Townsite data center was the first in the country to be approved on federal public land, though construction is stalled after a judge ruled that the government couldn’t use an old environmental review from when the project was intended to be a solar farm.

Tech companies are eager for vast tracts to build data centers that can be as large as 70 football fields, and Townsite could set a precedent for similar projects on federal property with more than a dozen others in the planning stages. President Trump has been a steadfast supporter of the AI industry, which he views as a source of economic growth and part of a global competition with China.

However, data centers have been unpopular in many communities as voters worry about higher electricity bills, declining water supplies and other effects. In Nevada, where 80% of the land is owned by the federal government, Townsite and other projects have become a dominant issue in the battleground state’s closely watched governor’s race.

Republican Gov. Joe Lombardo, one of his party’s most vulnerable incumbents, doesn’t outright oppose building data centers on public lands, as long as they have community support. He recently signed an agreement with Trump’s Republican administration to streamline infrastructure projects, which could include data centers on federal lands.

Democratic nominee Aaron Ford, the state attorney general, has pledged to oppose data centers on public lands, saying affordable housing should be the priority.

Both say the projects, whether on public or private land, must follow state rules, such as requiring data centers to cover their own energy costs and protecting water supplies, or they would lose eligibility for state tax abatements.

Voters across the political spectrum unite against data centers

Sorenson, the Boulder City resident, considers herself a liberal, but she said her conservative neighbors are on the same page as she is.

“We’re all aligned on this,” she said.

Autumn McGrath-Shook, who lives in the same town, said she recently left the GOP and registered with the Green Party over data centers, though she still identifies as conservative. Worried about the environmental impact on wildlife, she joined forces with “these crazy libs” to oppose the project.

Data centers have quickly become a “catalyzing issue” in the midterms, catching many politicians flat-footed, said David Damore, a political science professor at the University of Nevada Las Vegas.

Some state leaders who were previously supportive of data centers have rushed to respond. For example, Republican Texas Gov. Greg Abbott paused data center approvals until audits are completed, and Democratic Pennsylvania Gov. Josh Shapiro signed an executive order removing data center proposals from a fast-track permitting process and requiring them to receive local approval before seeking state approval.

In August, Ford announced his plan to pause new tax abatements for data centers while an audit is conducted to see whether the projects have fulfilled promises about producing tax revenue and economic benefits.

In September, Lombardo, who has said data centers provide enormous economic opportunity for Nevada, signed an executive order placing more guardrails on them and requiring them to pay more taxes to support schools.

The two have successfully “muddied the waters” on their data center positions, Damore said.

Lombardo criticized Ford for co-sponsoring 2015 legislation that created the state’s tax abatement program for the facilities, a measure that received bipartisan support. Ford criticized Lombardo for giving more than $200 million in tax breaks to data centers, which is connected to the legislation that Ford co-sponsored.

Ford told the Associated Press that he would use “every tool” at his disposal to prevent data centers from skirting state guardrails, including withholding tax abatements and pursuing litigation.

Lombardo, whose campaign declined to make him available for an interview, has a similar pitch. His office said he would not hesitate to confront the federal government to advocate for Nevadans.

But that’s not good enough for McGrath-Shook, who is on the fence in the governor’s race. She thinks Ford is soft on crime, but she views Lombardo as more pro-data centers.

“I would much rather vote for Lombardo than Aaron Ford in a normal world,” she said. “But with the looming data centers, it really changes the landscape — and literally.”

Data centers on public lands are the latest effort in AI race

Last year, Trump signed an executive order to accelerate permitting for AI data centers, and his administration has rolled back the National Environmental Policy Act, saying the bedrock law needlessly delays federal approval for energy and infrastructure projects.

Dan Diorio, executive vice president of state policy and government affairs for the Data Center Coalition, said the industry wants to be a part of the conversation about responsible development on federal lands.

“The good-faith actors in this space are going to be approaching that development responsibly,” he said, “ensuring that it’s going to do no harm on important federal lands.”

But environmentalists are concerned about data centers developing on federal lands to skirt environmental protections and laws and circumvent permitting processes. They’re generally opposed to using public lands for the projects in the first place.

“We believe that public lands are reserved for public good and should be protected and kept in trust for future generations,” said Olivia Tanager, director of the Sierra Club’s Toiyabe Chapter. “And the idea of using public lands for data center construction totally flies in the face of that set of values.”

She said Congress should pass legislation with new standards for environmental reviews and public engagement that could slow development.

“Short of some type of legislation to that effect,” Tanager said, “we’re staring down the barrel of having many data centers move forward on public lands over the next few years.”

Hill writes for the Associated Press.