Data center request sparks council hand-wringing
Phoenix City Council approved an easement abandonment for a planned 1-million-square-foot data center by Menlo Equities in Ahwatukee, despite significant resident opposition citing noise, temperature, and health concerns. The council acknowledged the residents while balancing industry litigation threats over restrictions. The article also discusses a statewide moratorium on data center tax incentives and a prior legal claim against the city by Aligned Data Centers.
The Phoenix City Council last week approved the abandonment of drainage and waterline easements for a planned 1-million-square-foot data center in Ahwatukee, despite strong opposition from residents. The project, proposed by California-based Menlo Equities, involves a five-building data center near 48th Street and East Thistle Landing Drive. Residents formed the Ahwatukee Community Alliance to press the city to stop the project, citing concerns about noise, higher ambient air temperatures, and potential health risks including cancer, cognitive impairments, and heart issues from infrasound.
Mayor Kate Gallego and other council members expressed sympathy for residents but noted the city's delicate position between addressing public concerns and potential multi-million dollar litigation from the data center industry over perceived excessive restrictions. Councilwoman Anna Hernandez cast the sole dissenting vote. City Planning Director Joshua Vednarik clarified that the property is exempt from new data center development guidelines approved last year because it had preliminary site plan approval prior to the ordinance's adoption. Opponents also highlighted Proposition 207, Arizona's Private Property Rights Protection Act, which requires compensation for property owners if new land-use regulations reduce property value, a point indirectly acknowledged by residents concerned about diminished property values.
The article also referenced a past incident where Aligned Data Centers filed a claim against the city after purchasing land in 2022 and facing new standards that would reduce its property value. Mayor Gallego mentioned that the greater Phoenix area is a global epicenter for data centers and that the Arizona Legislature and Governor Katie Hobbs recently passed a three-year moratorium on a sales tax incentive for data centers, a bipartisan effort to address the industry's rapid expansion. Menlo's attorney, Nick Wood, stated the company had connected with over 400 neighbors and received letters of support, also offering a pickleball park on the site.