Henderson to require data center operators to enter into development agreements

Henderson City Council members ordered city staff on Tuesday to begin requiring data center operators to enter into negotiated development agreements that would evaluate each data center proposal on a case-by-case basis.

The move shifts away from a proposed city moratorium on new data center applications.

The decision came after a nearly hourlong hearing at Tuesday’s City Council meeting for a bill that sought to impose an immediate ban of up to 180 days on new conditional permit applications for data centers, which are defined under state law as buildings that house computer network servers for the purpose of storing, managing and disseminating information.

Mayor Michelle Romero said at Tuesday’s meeting that city officials will begin the process of updating Henderson’s development code to require all data center applicants enter into a development agreement with the city.

A city spokesperson said the code update would be placed on the City Council’s Aug. 4 meeting agenda.

Tuesday’s meeting also featured input from dozens of residents during public comment, with many urging the city to pass a ban on new data center projects or reject future data center proposals.

“Even if you’re pro-data center, you still want it to be a responsible data center,” Romero said. “And I think for the environmental folks that were here, we’re still gonna be able to address every single concern that they had.”

‘Better than the status quo’

Cullen McGinnis, an organizer for the Sierra Club environmental group, was at Tuesday’s meeting and asked City Council members to pause new applications on data centers until state legislators had a chance to address concerns during next year’s legislative session.

But after Tuesday’s decision, McGinnis said in a statement the city missed an opportunity.

“While requiring development agreements is better than the status quo, it is not a substitute for clear, enforceable ordinances that protect Henderson residents, taxpayers, natural resources and public health,” McGinnis said in a statement provided by the Sierra Club.

Henderson resident Julie Kemp said the city should be wary of tech companies looking to build data centers that could be used for artificial intelligence. Other attendees worried that data centers could be used to store surveillance data.

“There are way too many unknowns, and from what we have seen in the devastated cities across the U.S., there is no reason to rush building AI data centers,” said Kemp, who was one of several dozen attendees at Tuesday’s meeting. “Their negative effects are alarming … and, most importantly, we the people do not want them.”

‘As the technology changes, so can the requirements we ask’

Romero said after the moratorium proposal was introduced June 16 that city officials needed time to learn more about the impacts new data center developments would have on electricity demand, grid stability, water consumption, heat generation and other environmental and safety impacts.

But instead of a blanket regulation that would apply to all new data center developments, Romero said, development agreements can be crafted on a case-by-case basis.

That would allow the city to evaluate projects individually and implement accountability measures that are specific to the developer.

“It could be a dynamic requirement that as technology changes, so can the requirements we ask,” Romero said. “And they would have legal ramifications after the fact so we have a mechanism to make sure they are complying with what they said they were going to do.”

Romero said negotiated development agreements are required to have hearings at Planning Commission and City Council meetings, which would ensure the public has a chance to give input on potential new developments.

“There would be multiple opportunities for residents to weigh in on a specific project with specific information,” Romero said.

Data centers in Nevada

Henderson was the first local government in Southern Nevada to consider a pause on data centers. Clark County last month OK’d a proposal from Las Vegas-based technology infrastructure company Switch to add a data center to its Southwest valley campus, while federal officials earlier this month said they are moving ahead with plans for an 88.5-acre data center project on public land near Boulder City.

Last year, officials approved a conditional use permit for a 300-acre data center campus for the Trammell Crow Co. to be built in the city’s east side, but no other companies have active applications, a city spokeswoman said previously. Henderson Director of Community Development and Services Eddie Dichter said Tuesday the city had no new data center applications before Tuesday’s meeting.

Nye County Commissioners last month approved a temporary moratorium on data centers at the urging of its water district. In May, the Reno City Council approved to extend its moratorium on data center approvals through Aug. 31, 2027, becoming the first Nevada city to put a pause on new data centers.

The Reno moratorium cannot be lifted without an ordinance that would change the city code or establish evidence that existing regulations are sufficient at protecting public health.

Henderson Councilwoman Carrie Cox said officials should weigh the impact any new data center would have on residents and the environment. Cox also urged residents on each side of the issue to reach out to her office to share their concerns.

“There are municipalities and governments all across the United States dealing with this right now,” Cox said. “We have to get it right for our residents, for our businesses, for the people that are here, and we have to take care of it.”

Contact Casey Harrison at charrison@reviewjournal.com. Follow @Casey_Harrison1 on X.