San José can tell you exactly how close one smoke shop can be to another. It can tell you where cannabis dispensaries can operate, how far they must be from neighborhoods and how much their owners must pay annually for regulatory oversight.
But ask how close a massive data center should be allowed to operate to someone’s home, and apparently the City is still working on an answer.
Seriously?
Mayor Matt Mahan is promising San José residents some of the strongest data center standards in the nation. In a recent email to residents, he emphasized the City’s extensive community engagement process and its responsibility to lead the nation in regulating the infrastructure powering artificial intelligence.
That’s an ambitious promise. Unfortunately, the proposed regulations don’t come close to delivering on it.
After months of meetings, community outreach and discussions with developers, San José released its proposed Data Center and Large Energy Project Uniform Standards on October 15.
Underwhelming doesn’t begin to describe them.
The City is preparing to establish rules for facilities that can consume hundreds of megawatts of electricity, operate large industrial cooling systems and maintain extensive banks of diesel backup generators.
Yet the proposed standards fail to answer some of the most fundamental land-use questions.
How close should these facilities be allowed to operate to homes and other sensitive uses? How many should be permitted in a particular area? What protections will prevent their expansion into open space and working lands? Who is going to pay for the ongoing City oversight necessary to ensure compliance?
These aren’t complicated new concepts. San José has been regulating land uses based on location, concentration and neighborhood compatibility for decades.
Consider tobacco retailers.
San José prohibits new tobacco retailers within 500 feet of an existing tobacco retailer. It also requires a 1,000-foot separation from designated sensitive uses.
Why? Because the City recognizes that the concentration and location of certain businesses can have consequences for surrounding communities.
Now consider data centers.
Under the proposed standards, there is no comparable geographic concentration limit. Multiple facilities could be developed in the same industrial area without a specific policy addressing their collective concentration.
Apparently, preventing a cluster of smoke shops warrants clear geographic restrictions, while a concentration of massive energy-intensive industrial facilities does not.
How does that make sense?
The City’s cannabis regulations expose another glaring inconsistency.
Cannabis businesses are subject to specific separation requirements and a regulatory structure backed by dedicated funding. Each location pays an annual operating fee of nearly $50,000 to help support the City’s oversight program.
San José understands perfectly well that adopting regulations is meaningless without the resources to enforce them.
But where is the comparable annual regulatory fee for data centers?
The City’s proposal discusses inspections, monitoring and enforcement. It allows certain enforcement costs to be recovered after violations occur.
That’s not the same as funding an ongoing program to ensure these facilities comply with their operating requirements.
The City has figured out how to make a cannabis dispensary pay for regulatory oversight, but hasn’t proposed a dedicated annual oversight fee for a data center potentially representing hundreds of millions of dollars in investment.
And there’s another fundamental question the proposed standards fail to adequately address: How will San José protect its remaining open space, agricultural lands and other working landscapes from inappropriate data center development?
These facilities require substantial land, electrical infrastructure and supporting utilities. Their impacts don’t necessarily stop at the property line.
San José has spent decades establishing policies to protect Coyote Valley, preserve agricultural lands and prevent development from encroaching into environmentally sensitive areas.
Those protections should be reinforced, not overlooked, as the City accommodates a new generation of energy-intensive industrial development.
The standards should explicitly direct data centers to appropriate industrial locations, prohibit their expansion into protected open space and agricultural lands, and address impacts on adjacent working lands and natural resources.
These aren’t minor omissions.
They go to the heart of whether San José is serious about establishing meaningful rules for an industry whose facilities can affect surrounding neighborhoods and landscapes for decades.
Mayor Mahan says the City has held dozens of listening sessions involving hundreds of residents, neighborhood associations, environmental organizations and other stakeholders. He also says residents should have an opportunity to express their concerns before new projects are approved.
But listening to residents and actually addressing their concerns are two different things.
If the City has spent months gathering public input, why do the proposed standards still lack basic requirements addressing proximity to neighborhoods, cumulative concentration, protection of open space and working lands, and dedicated funding for regulatory oversight?
To be clear, nobody is suggesting that a smoke shop and a data center present the same risks. That’s precisely the point.
The scale, infrastructure requirements and potential cumulative impacts of data centers should demand a more rigorous approach, not one that leaves fundamental questions unanswered.
And before anyone argues that these facilities are already subject to state and regional environmental regulations, that’s not an excuse for the City to abdicate its own land-use responsibilities.
State permits don’t decide whether San José should allow multiple data centers to concentrate near a residential neighborhood or whether industrial development should encroach on agricultural lands. Those are local planning decisions.
The City Council is tentatively scheduled to consider the proposed standards on December 8, with a second reading anticipated on December 15.
What has been presented so far is not the comprehensive regulatory framework San José needs. It’s a collection of individual requirements that fails to adequately address where these facilities belong, how many should be concentrated in one area, how open space and working lands will be protected, and how ongoing oversight will be funded.
San José has already demonstrated that it knows how to establish tough, enforceable land-use regulations.
Mayor Mahan wants San José to lead the nation in regulating data centers. That’s a worthy goal. But declaring these standards among the strongest in the country doesn’t make them so.
If San José can establish stronger geographic safeguards for smoke shops than for massive industrial facilities, the Mayor and City Council have some explaining to do.
Bob Staedler, Publisher
