Phoenix faces growing legal pressure over new data center rules

The city of Phoenix is facing increasing legal pressure from data center developers and landowners who are challenging a new ordinance. The ordinance, approved by the City Council last summer, aims to prevent large-scale data center construction near neighborhoods and other sensitive areas due to a recent surge of data centers across the Valley. Landowners, who had plans to sell or develop their properties for data centers, argue that the ordinance unconstitutionally limits their property rights. They contend that under Proposition 207, a voter-approved 2006 law, they are entitled to compensation if new zoning rules reduce their land's value. Attorney Jon Gillespie, representing one landowner, emphasized that Prop 207 protects private property and that the city would be liable for any diminishment in value if it does not grant binding waivers. The most recent case involves a proposed data center site near Interstate 17 and Loop 101 in northwest Phoenix. While the city has issued waivers in some instances to allow projects to proceed despite the ordinance, in this specific case, the attorney stated they were working with the city to reach an agreement and requested additional time to finalize details.