A nationwide expansion of controversial and resource-guzzling artificial intelligence data centers has reached Los Angeles County, and the wave has cities in the region grappling with questions over their impact.
Some municipalities have acquiesced to this latest tech drive, while other regional communities are pushing back against and, in some cases, halting proposed projects, citing their potential environmental impacts, the costs of powering them to utility customers, and other trade-offs.
In some communities, for instance, data center proposals compete with the urgent need for affordable housing, which in urban, densely populated L.A. County can make them a tough argument for developers and city officials who want to attract them, and who say they are vital to powering the new tech boom.
“The data center fight, at its core, is a critique of not only are we dealing with these burdens that have significant health and environmental impacts, but it’s also pointing out that folks would like a million other things to be built,” said Samuel Brown, a coordinator with Avocado Heights Vaquer@s, a San Gabriel Valley environmental justice organization that focuses on land-use issues, irresponsible development and local equestrian advocacy.
In recent months, alongside the global boom in AI, local data center critics have pounced on even the hint of the arrival of potential centers in an array of L.A. County cities, using social media, petitions, community forums and converging at local public meetings to voice concerns.
In Pasadena, for instance, the mere purchase of a vacant building by tech giant Amazon led to concerns that the company was plotting to build a data center.
While the company was quick to clarify that it intended to use the 168,000-square-foot facility for quantum computing, it prompted city officials to analyze its lack of policy around the potential for data centers — a process that appears to be spreading to other agencies in the county.
The spread is being fueled by society’s growing reliance on all sorts of computing and cloud-based technology.
In basic form, a data center is simply a facility, large or small, that houses and runs large computer systems. So called “edge” data centers are smaller, handle smaller user requests and are built closer to users. But as the need for data storage and processing grows, particularly in AI, the need for so-called “hyperscale” centers — which, according to a Congressional fact sheet, draw power exceeding 100 megawatts (the electrical demand of 80,000 households) — the sheer size of a structure needed is sparking controversy across the country.
Locally, in a built-out L.A. County, developers have been quick to point out more modest proposals. Still, proposed facilities have become flashpoints.
Wake-up calls
The most prominent local data center flashpoint occurred in Monterey Park, where residents successfully pushed its City Council to approve a June ballot measure that if passed would ban data centers in the city. The residents’ opposition and City Council action was spurred by developer HMC StratCap’s proposed 218,400-square-foot data center at 1977 Saturn St.
Earlier this month, the developer withdrew its application for the data center project in the face of a determined community push and the City Council’s actions.
StratCap’s withdrawal came after months of defending its project as a way to revitalize a lot that had been vacant for years. But the application coincided with a national surge of concerns about the centers.
In March, Monterey Park City Councilmember Jose Sanchez celebrated the action: “We’re glad HMC StratCap is going to work with the city to find other land uses for their purchase.”
The proposed center would have housed a wide range of computers and support equipment for private clients, who, according to officials, would either use the project as a place to relocate existing servers or operate new servers and expand storage capacity. Potential users could be in the fields of artificial intelligence, cloud computing; financial services, government; healthcare, education, media and general corporate enterprises.
Now, there’s talk about the alternatives, such as housing.
It was a wake-up call across the region.
Critics say the community opposition put the issue on their radar, and has since galvanized a broad coalition in San Gabriel Valley against data center proliferation.
Brown said potential data center sites in the City of Industry have drawn the coalition’s eyes: The former Madrid Middle School and a Majestic Realty warehouse, according to city officials, which do not have any plans under review.
In February, speculation about data center development across the City of Industry came to a head when community organizers uncovered data center discussions between the City Manager’s Office and several interested companies through a public records request.
Questions revolved around Real Estate Development Associates’ Puente Hills Mall site. Jason Krotts, co-founder and principal at REDA — the group that bought the mall in 2024 with hopes of reinvigorating the site — acknowledged there are plans under review. One potential project calls for a 1.6-million-square-foot building that includes 150,000 square feet that could be a data center.
But Krotts clarified with the Southern California News Group that his intention is not necessarily to build a data center. Market forces will ultimately play a key role, he said.
“I’m a logistics and multi-family developer,” Krotts told the Southern California News Group recently. “I’m not a data center developer.
“I think that any speculation about data centers is really misinformed,” he added, noting that he doesn’t know what tenants would ultimately occupy the site under the options his team has submitted to the city.
“We’ve been trying to plan for a number of different avenues that we could go down, and we’re going to let the market dictate which avenue we go in,” Krotts said.
Without entitlement from the city, Krotts can’t begin demolition of the mall, which would take six to eight months, maybe more, he said. And REDA can’t commit to leasing without guaranteeing their development timeline.
Krotts also said the firm will follow the city’s process, which includes opportunities for public comment.
Regarding the other data center proposals in the city, Majestic Realty Senior Vice President Hank Darnell said they “briefly looked into their [data center] proposal, but did not go forward with it,” and the Mountain View School District Superintendent Raymond Andry said the board “voted unanimously to terminate further negotiations related to the Madrid property” on March 5.
Assistant City Manager Sam Pedroza said Industry’s planning commission has made recommendations to the City Council for establishing data center regulations, but it has not been heard by the City Council.
Underpinning the data center question is the amount of energy they use and the impact on the environment as they power vast servers needed for modern tech life. In addition to data centers’ energy demands, critics highlighted concerning impacts to water, pollutants from backup generators and data centers creating heat islands.
According to a City of Pasadena report, even a 10-megawatt data center may consume approximately 78,840 megawatt-hours annually, equivalent to about 8,000 households.
Many data centers use water for cooling. That same size data center may consume about 40 acre-feet of water per year, the equivalent of the water use of 120 households.
Critics lament that it will be local residents who pay the costs for that energy.
A different perspective
Khara Boender, a director of state policy for the Data Center Coalition, said its a misconception that all data centers power artificial intelligence. Boender said everything from a virtual call, to streaming services on smart televisions, smart lightbulbs and e-commerce are powered by data centers.
The coalition serves as a national level trade association for the data center industry. Its member companies include leading data center owners and operators such as Amazon Web Services, Google, Microsoft, Meta and Open AI.
Boender said the data center industry is committed to paying its full cost of service for the electricity and underlying infrastructure it uses, echoing a push from President Donald Trump for tech firms to cover the costs of the electricity they use.
“We’re also committed to collaborating closely with regulators, legislators, community leaders statewide to promote smart and sustainable development policies,” Boender said.
She said the main concentration of data centers in the state is in Northern California in Silicon Valley. The largest data center market in the nation is in Virginia, Boender said, with growth happening in Georgia, Texas and Arizona.
“California’s an interesting space to play in,” Boender said. “There are over, I believe, 35 other states that offer sales and use-tax exemptions for data centers, so that’s obviously an impact to the decisions for where are members locate. There isn’t one of those in California at the state level.”
Despite that hurdle and that of high-priced land and expensive power, Boender described California as a key market for the industry, given the significance of the innovation economy plays in the state.
‘They have to go somewhere’
In 2024, Prime Data Center, a 33-megawatt, three-story, 242,495-square-foot facility, opened in Vernon, just southeast of Downtown Los Angeles.
Another data center is under construction and two or three others are potentially on the way.
City Administrator Brian Saeki said the city is uniquely positioned to accommodate data centers because it owns and operates its own public utility, has a small residential population and has a history built on business.
“Data centers aren’t for every city. They’re not,” Saeki said. “We understand that, but they have to go somewhere, and why not come to a city that’s basically built for that kind of development.”
Vernon’s power plant runs on natural gas. To achieve compliance with state renewable energy requirements it purchases electricity from renewable sources like wind and solar to combine with locally generated power.
Saeki said data centers in Vernon are taking the place of three or four older legacy companies, such as the Farmer John meat processing complex, that had been in town for decades, but have left in recent years.
Data centers helped stabilize the city’s electricity rates, he said.
“They were a significant water user in town and a significant power user in town,” Saeki said of Farmer John. “From a power perspective, having data centers come and replace that power helped keep our rates stable. If we’re not able to replace what was being used then what’s going to happen is rates are going to have to increase for our current customers.”
Because Vernon’s cost to produce and distribute power is fixed, when the city lost the revenue of those businesses, the only way to make up for the loss would be to raise rates.
Saeki said the city is no longer accepting new data center applications.
Unlike some data centers across the country that use potable water for cooling, Vernon’s data center, Saeki said, is air-cooled through electricity, like a home air-conditioning system. In addition, data centers in Vernon are required to meet those state requirements around renewable energy standards.
“We’re mindful of public concerns about the potential harmful impacts of data centers, and we’ve taken those into account by requiring that new developments avoid repeating the problems seen in other communities,” Saeki said.
The push to regulate
Julia Dowell, a senior campaign organizer at the Sierra Club focusing on California’s electric grid, said the state gets about 36% of its electricity from the more than 180 gas plants across California.
“There’s a very real concern if all of these data centers plug into the grid that we risk increasing the amount of electricity, increasing the amount of pollution because we’re running those gas plants more and more,” Dowell said.
The Sierra Club is advocating for increased regulation on data centers that can curb their impact.
One example is a large load tariff for data centers in California that would put centers in their own rate class, requiring a data center to cover the cost of transmission upgrades instead of it being split amongst ratepayers.
Another potential guardrail could be requiring data centers to bring their own new clean energy to the grid when building in California.
The efforts echo a recent report from the “Little Hoover” Commission on California State Government Organization and Economy, which said the state’s electricity rates are already among the highest in the nation.
California must develop tariffs and policies that protect ratepayers from being burdened with increased costs because of data centers, according to the commission, which put forth 15 recommendations to guide how the state should respond to the proliferation of centers.
The Los Angeles County Board of Supervisors on Tuesday plans to discuss data centers and their potential impacts to neighboring communities.
A motion by First District Supervisor and Board Chair Hilda Solis asks various county departments to examine effects of data centers on electrical and water resources, and possible health effects.
The motion also asks to compare how other jurisdictions such as cities in L.A. County are regulating data centers.
One of the key aspects of the motion is to put the County Counsel’s Office on deck for any possible legal actions to address data center proposals within unincorporated areas, as well as cities adjacent to these county areas.
Finally, county counsel is being asked to lay the groundwork for a potential moratorium on data centers within unincorporated L.A. County.
State Sen. Sasha Renée Pérez, D-Pasadena, has also proposed Senate Bill 978, the Data Center Community Accountability Act, which bans the use of backup diesel generators. The bill would prevent data centers from placing electricity costs onto ratepayers, and directs state regulators to assess data center impact on California’s climate goals.
Weighing the benefits and the costs
Meanwhile, cities have already begun weighing the costs and benefits.
For municipalities with their own public utility, Dowell said the concern still remains that powering a data center could cause an increase need for gas-powered electricity.
“I don’t think being a municipal utility insulates them from having negative impacts from data centers,” Dowell said.
In Pasadena and elsewhere, officials said the benefits of a data center include economic growth, additional tax revenue for the city. Such revenue could bolster efforts for Pasadena Water and Power infrastructure upgrades to accommodate large load requests, officials said.
However, the challenges of a data center include the extreme power demand that could impact the city’s 2030 carbon-free goal, increase in water usage, stranded assets if demand is overestimated, new large loads outside of Pasadena impacting the city grid, air quality issues from back up generation and noise pollution.
PWP General Manager David Reyes said at a March meeting that the city has been approached by potential data center developers who have asked questions about the city’s ability to accommodate different power loads at certain locations, but none have submitted formal applications.
“Because we’re a built-out city without a lot of space we do want to get ahead of the issue, we know that regulations are likely needed, but we just don’t see the opportunity because we don’t have the infrastructure to bring in, import that kind of power for these larger facilities, nor do we have the space,” Reyes said. “But the quantum computing seems to be something that is probably going to continue at least poking around here in the city.”
Pasadena has held City Council committee meetings on the data center topic, with more expected in the coming months.
“There is currently no ‘data center’ land-use definition within the City’s Zoning Code,” a city staff report read. “Therefore, the use is not permitted anywhere in Pasadena and there are no development/operational requirements for the use.”
Across Los Angeles County, cities are handling the looming proliferation of data centers in their towns in different ways.
Despite no plans for a data center in El Monte, the City Council passed a 45-day moratorium on building data centers in the city. Public concern arose in the city after rumors about a data center being built at Madrid Middle School, which closed in 2021.
City Manager Alma Martinez said this week that cities must keep local codes and zoning up to date as tech advancements continue. But she confirmed that there are no pending data center projects in El Monte.
As the discussion plays out, one thing was certain, said Brown, from the Avacado Heights group: “We’re looking at a critical juncture within society of what type of land-use planning we envision for the future,” Brown said.
Staff writer Stephen Scauzillo contributed to this report. Joshua Silla is a correspondent with the Southern California News Group.