The Shelby County Commission is the latest government body to consider a moratorium on data centers as momentum to regulate or halt the spread of the tech facilities continues to build.
Commissioner Henri Brooks introduced a companion ordinance to a 12-month moratorium currently under consideration by the Memphis City Council during the Wednesday, Oct. 6 committee meetings.
There are currently no data centers operating in unincorporated areas of Shelby County.
A moratorium would only apply to non-incorporated parts of Shelby County. Like Memphis, the various suburban municipalities would be required to pass ordinances of their own to regulate data centers within their city limits.
“The city council has proposed a moratorium. We could pretty much use that to apply it to unincorporated parts of Shelby County and be in conjunction with the City of Memphis,” said Brooks.
A vote was withheld on the item. It was sent back to committee without a favorable recommendation. Much like their counterparts on the Memphis City Council, commissioners appear split on the direction the county should take. Furthermore, the commission appears to be at a similar fork in the road.
On the left, members argue a 12-month moratorium could provide time and breathing room to author a set of regulations. Data centers have emerged as a hot-button issue in the past year. Politicians across the land are feeling pressure from constituents and business interests alike. Commissioners are no exception.
“We have been inundated. There is so much conversation. There is a lot of media about data centers. Data center headlines are all over print, audio, everywhere. And there is a lot of information that is needed,” said Brooks.
Others prefer the middle road. This group is equally interested in regulating data centers, but doesn’t want to scare off outside businesses or hinder companies already operating in the county. They also haven’t written off the need for a moratorium, either.
One member mused that a restriction on Shelby County might be shortsighted. Unincorporated areas might be the ideal location, when population density is factored into the equation.
“It seems ahead of ourselves … I don’t have enough information whether that would be bad or not, and it’s not to say we don’t need to figure out all of these regulatory concerns,” said Amber Huett-Garcia.
In many ways, local discussions around data centers boil down to zoning. Through zoning, communities have the power to decide where data centers can and can’t go — or if they want them at all. There is also the previously mentioned taxation.
Other considerations, like environmental concerns, are largely regulated by the federal Environmental Protection Agency. County health agencies set the penalty if local industries exceed pollution thresholds. Still, data centers largely operate in an unregulated environment.
“When it first came out about data centers, a lot of people from across Shelby County came out and they were pointing fingers at the health department, Shelby County Commissioners, and we were in the dark. We were blindsided,” informed commissioner Erika Sugarmon.
On the right, a more laissez faire approach was offered. The suburban bloc present was concerned about the message a moratorium would send. Businesses with proposed data center projects could look elsewhere, denying the county of much-needed tax revenue. For example, the City of Memphis pulled in around $25 million in property taxes from SpaceXAI last year. A chunk of it will be used to invest in a five mile radius near the Colossus 1 data center on Paul R. Lowery Road.
Data centers come in several forms too. A one-size fits all approach would lump closet-sized operations in with behemoths, like the Colossus.
“I believe a moratorium basically says to the region and to the country, ‘Shelby County is closed for data centers,’” said Mark Billingsley.
One thing is likely, if a moratorium does pass, it could trigger a lawsuit. In that regard, there is plenty of precedent set across the nation. Many of the lawsuits have been filed on “constitutional” grounds. These include alleged violations of due process rights, equal protection rights, and “regulatory taking without just compensation.” Moreover, they are typically filed by deep-pocketed corporate interests.
“Court decisions and lawsuits have been filed, particularly against counties and cities that enacted 12-month moratoriums,” confirmed assistant county attorney Craig Barnes. “Those are the most common claims among these businesses.”
