Data center developers overhaul strategies as community backlash stalls projects
Data center developers are revising their strategies and designs as community backlash across the Valley and the country causes projects to stall. According to a new JLL report, gaining local community approval is now the biggest obstacle for the industry, making the entitlement process significantly harder in areas like Phoenix.
Data center developers nationwide, including those operating in Arizona, are significantly overhauling their strategies, messaging, and designs in response to escalating community backlash that has stalled numerous projects.
Despite an unwavering demand for artificial intelligence capacity, which has kept national data center vacancy rates at 1% for three consecutive years, local community opposition has emerged as the industry's most substantial challenge, according to a recent JLL report.
In Phoenix and its neighboring cities, the entitlement process for new data centers has become "infinitely harder" over the last year, states Adam Baugh, a partner at Withey Morris Baugh PLC, whose clients include data center developers.
Currently, North America has more than 66 gigawatts of data center capacity under construction, with approximately 2 gigawatts of that development located in Arizona.