As Denver Water calls for a 20% reduction in water use during Stage 1 drought conditions, City Council members advanced a bill to rein in one of the largest water users — data centers — by proposing a yearlong moratorium on new construction and development. 

Should the proposed legislation be approved by the full City Council, it would halt all new construction and data center development for up to a year beginning May 21.

Because data centers are not specifically regulated within Denver and have no specific permitting requirements, city officials want to press the “pause” button to give the city time to develop “thoughtful regulations” that address community safety and equity.

“What we have not had are clear regulations as to how and where these should be built,” Councilmember Darrell Watson, a co-sponsor of the bill, said at Tuesday’s meeting.

“This is the first step,” Watson added. “This moratorium provides that opportunity for us to take a pause, to breathe, to do the research necessary, and to have the experts and the community members and the folks who are deeply impacted by these data centers provide their feedback and their input.”

The moratorium could be extended beyond a year if city officials deem it necessary.

While the moratorium does not address the challenges that data centers present, bill co-sponsor Councilmember Paul Kashmann said what it does do is “recognize the impacts … data center development can bring to a community, and puts that one year pause in place so we have time to look at it and look at if, or how, with adequate regulation, we might accommodate new data center development in Denver.”

Anticipated impacts of the moritorium

A special working group consisting of community members, industry
stakeholders, utility companies, subject matter experts, city
departments and the City Council would be established to explore community impacts and make recommendations.

Specifics of the working group have yet to be finalized.

The moratorium would apply to any new or proposed data center, including new construction or redevelopment of such on an existing property that has not received a zoning permit, a site development plan, or a site development plan amendment.

Existing data centers and projects currently permitted or under construction would not be affected by the moratorium, though they could be expected to follow new guidelines once announced.

At this time, city officials said there is only one data center, the CoreSite DE3 facility, permitted and under construction in Denver.

“This data center is under construction on a site that previously operated as a concrete manufacturing plant in the Elyria-Swansea neighborhood,” a spokesperson for the Denver Office of Community Planning and Development told The Denver Gazette. “The project was approved as a use-by-right under Denver’s General Industrial District (I-B) zoning as the use ‘Wholesale Trade or Storage, General.’” 

The new 170,000-square-foot data center, at 4900 N. Race St. adjacent to the National Western Stock Show complex, is just one of three data centers owned by Denver-based CoreSite. 

City officials said future phases of this development have not yet been permitted and that they are unaware of any other planned data centers in Denver.

The proposed moratorium is expected to come before the full City Council on April 20 for a first reading, with a second reading and public hearing likely to follow on May 18.