Tucson bans potable water for data center cooling in new zoning ordinance

Tucson bans potable water for data center cooling in new zoning ordinanceThe city council approved strict land use regulations for hyperscale data centers, forcing facilities to comply with the city's Large Water User Ordinance and show available water supply before approval.

The ordinance prohibits the use of potable water for on-site cooling for data centers that fall below the threshold of the city's Large Water User Ordinance.

Data centers will no longer be permitted by right anywhere in the city, requiring a site-specific rezoning process and final approval from the Mayor and Council.

The city plans to introduce further revisions to its existing Large Water User Ordinance in September.

In a separate action, the council authorized a system conservation implementation agreement with the U.S. Bureau of Reclamation for drought mitigation in the Lower Colorado River Basin.

The Tucson City Council voted 6-1 on August 5 to adopt a new zoning ordinance that strictly regulates the development of large-scale data centers, placing significant restrictions on their water and energy use. The regulations, which establish hyperscale data centers as one of the most highly regulated land uses in the city's development code, were drafted in response to growing community concerns over the water-intensive nature of the facilities amid the ongoing Colorado River drought. Under the new rules, data centers that fall below the threshold of the city's existing Large Water User Ordinance are explicitly prohibited from using potable water for on-site cooling. All large-scale data centers must also demonstrate an available water supply and comply with the Large Water User Ordinance. Director of Planning and Development Services Corinne Manning told the council that the regulations are designed to work in parallel with the city's existing water policies. The City Manager noted that staff plan to bring further revisions to the Large Water User Ordinance to the council in September. The code amendment defines a large-scale data center as any facility over 25,000 square feet containing computing equipment, or any data center that consumes more than 20 megawatts of energy. Crucially, the ordinance eliminates any "by-right" zoning for data centers. Developers must now go through a discretionary planned area development (PAD) rezoning process, which requires a neighborhood meeting, a zoning examiner public hearing, and final approval from the Mayor and Council. "This would treat large-scale data centers very similarly [to power plants]," Manning said. "There is no zone where it would be permitted by right or through a special exception." The vote followed an hour-long public hearing where residents overwhelmingly urged the council to ban data centers entirely, citing water scarcity and grid strain. While the City Attorney advised that state law limits the city's ability to enact outright bans on specific land uses without opening itself up to property devaluation lawsuits, council members stressed that the new PAD requirement gives them the authority to reject future data center proposals on a case-by-case basis. In a separate water-related action during the meeting, the council authorized the city to execute a system conservation implementation agreement with the U.S. Bureau of Reclamation to mitigate drought in the Lower Colorado River Basin. The agreement requires the federal agency to pay the city to complete an expansion project before 2032 in exchange for water storage and exchange rights within the state to benefit tribal nations. The council also approved an intergovernmental agreement with the Arizona State Land Trust to reallocate Central Arizona Project water to facilitate economic development on state trust land.