Memphis City Council delayed a final vote on a data center moratorium during committee meetings, Tuesday, Sept. 15, after members agreed to combine two proposed ordinances introduced two weeks ago to regulate the computing facilities’ water, energy and property demands.
Council member JB Smiley said he will introduce an amended version of the moratorium at the Oct. 6 meeting, which drew no objections.
“I think we need to slow things down a bit. Sometime next week, I will send out an amended temporary hyperscaled data center moratorium,” said Smiley. “It’s going to have support by the majority of the members of this body. We’ve been trying to consolidate what we saw from Councilman (Jeff) Warren, what we saw from Councilman (Philip) Spinosa.”
Council members are also expecting updates at the Oct. 6 meeting that address the impact of data centers from Mayor Paul Young’s administration and the Shelby County Health Department.
Hey, City of Memphis, where is your plan?
Council members are eager to hear the city’s proposal for $3.2 million in tax revenue collected from the Community Benefit Ordinance, which is expected to generate $100 million. The property tax is specifically tied to the SpaceXAI Colossus I supercomputer to fund capital improvements in the 38109 zip code for a five-mile zone near the Paul R. Lowery Road facility and a similar zone in the 38116 zip code.
The law requires 25% of the tax revenue to be spent on investments in public buildings, facilities, infrastructure and equipment, as well as economic development projects in the targeted zip codes.
And $1.4 million will be set aside for homeowner repairs. Eligible applicants can receive loans up to $30,000. But no plans have been shared since a July 21 presentation announcing the proceeds.
”It has not been on the agenda one time,” said Council member Pearl Eva Walker, who chairs the MLGW committee and co-chairs the libraries and neighborhood improvement committee. “And the second allotment — it’s on the way.”
Walker’s concerns were supported by Council member Edmund Ford Sr., the elder statesman who defended the introduction of data centers in Memphis by pointing to the boost in revenue. He also urged Young’s administration to use tax dollars as designated, instead of “paying for things two times” and “filling potholes.”
Smiley clarified Ford’s argument.
“The services provided with the $3.2 million need to be different than the services the city is already providing,” he said.
It’s not all about the money. We’ve got to breathe too.
The council also would like to hear from the Shelby County Health Department — in person, following a pollution report recently issued by the agency. Council members are looking to ascertain the limits of their legislative power.
The council wants answers to three questions. How is air being monitored? What are the current areas of concern? How are residents notified when pollution levels may affect their health?
According to the county health department, air pollutant levels are monitored hourly. If they exceed safe levels, residents are typically notified by media reports, health department notifications and Tennessee Department of Transportation messaging boards.
“It also confirmed that its former partnership with MATA, which provided discounted transportation during air quality advisories, ended because grant funding is no longer available,” noted Yolanda Cooper-Sutton.
The transit agency is currently operating on a shoestring budget of $32 million, which falls short of its estimated need. The council set this limit after an outside forensic audit uncovered years of financial mismanagement.
Particularly troubling, however, is the increase in the number of days that Memphis has experienced hazardous ozone levels. In the past year alone, 13 “extended stays” — the presence of elevated concentrations of ozone gas over a longer period of time, instead of brief spikes — have been documented in Memphis. In 2025, federal levels were exceeded in just five days. The main contributors are weather, along with local and regional emissions. Data centers are undoubtedly a contributing factor.
“Written responses do not replace a public presentation where council members can ask questions, review neighborhood-level information and discuss how residents are being protected,” said Cooper-Sutton.
One of the authors of the competing data center proposals noted that an in-person health department report will help guide members as they seek to merge the ordinances.
What are the current data center proposed ordinances?
Council member Philip Spinosa’s proposal attempts to strike a balance between laying the groundwork for a quickly emerging industry and shielding the public good.
The ordinance would ask the city to create a digital infrastructure district, along with a “strategic large-load development” to handle future property and energy demands. Data centers, which are currently largely unregulated, would be held to enforceable, predictable standards through a “source-neutral” operating system.
In addition to advancing qualified applicants and collecting tax revenue, it also attempts to “protect citizens, neighborhoods, utility reliability, public finances and several other concerns.”
Locally, one of the biggest worries over data centers is water consumption.
Council member Jeff Warren’s counterproposal aggressively pushes for data centers to provide their own resources through zero emissions technology. It would also prohibit the use of potable water for cooling servers that run 24 hours a day, in favor of closed-loop cooling systems. The progressive use of renewable energy would also be required, obligating data centers to phase out carbon-based sources of energy.
