Warren City Council votes to approve 12-month data center moratorium

WARREN — The Warren City Council has temporarily halted new data center developments while city officials work to create zoning regulations governing the increasingly controversial facilities. At its Aug. 25 meeting, the council unanimously approved a 12-month moratorium on data centers, which will give the city time to define the facilities and determine where and under what conditions they should be allowed. The moratorium comes after Council Secretary Mindy Moore raised concerns earlier this summer about the potential strain large data centers could place on Warren's electrical infrastructure. After severe storms in July knocked down more than 60 power lines in the city, Moore called for Warren to consider temporarily stopping data center development while officials examined the issue. Warren joins a growing number of communities in Michigan, including Sterling Heights and Utica, that have temporarily halted data center development while considering local regulations. The moratorium was approved unanimously. Current ordinance doesn't define data centersJeff Schroeder, an attorney hired by the City Council, told council members that Warren's current zoning ordinance doesn't specifically address data centers, which could leave the city with limited ability to regulate a proposal if one were submitted. 'The city of Warren wants to define these centers, especially the large-scale ones,' he said. 'We talk about hyperscale data centers that are going to suck water and energy and create all these issues. It's not defined in the ordinance, so this gives us time as a city to develop some criteria.' Data centers are warehouses that house computer servers and other equipment used to store and process digital information, he said. 'A data center is just a large storage facility. I could have a couple servers in my closet at home and call it a mini data center,' Schroeder said. However, in recent months, the facilities have drawn controversy as the rapid growth of artificial intelligence and cloud computing has contributed to increased demand for large-scale facilities, some of which can require substantial amounts of electricity and water. Under the city's current zoning ordinance, which contains regulations for other types of businesses like car washes and funeral homes, data centers aren't defined, he said. This could potentially lead to a developer arguing that a proposed data center is similar to another permitted type of business, and the city wouldn't have any ordinance restricting it. The moratorium won't affect existing facilities or previously approved uses, Schroeder said. Councilman Henry Newnan, who was reading from the moratorium in the agenda, said it also excludes server rooms that are related to another permitted use and occupy less than 2,500 square feet. Councilman Jonathan Lafferty said many local businesses, such as General Motors, might have a server room that could be substantially larger than the room council meets in, but they would be excluded from the ordinance and moratorium. 'It's not something that's serving the needs of the public or other large corporations. Those are largely internal. The city of Warren has data rooms or server rooms, server closets on different floors … I would imagine and assume that they would be excluded from this, and that's what Mr. Schroeder has confirmed,' he said. Schroeder said he wasn't aware of any hyperscale data centers currently operating in Warren. Data center debate happening at state levelCouncilwoman Melody Magee questioned how Warren's moratorium could be affected if state or federal lawmakers eventually moved to limit local control over data center development. Schroeder said there had been discussion about higher levels of government potentially overriding local zoning authority, but he said it was unlikely to happen during Warren's moratorium. 'I think what you may have been hearing is that somebody may try to get the federal government or the state Legislature to pass a law that would take away your local control, take away your local zoning power,' Schroeder said. At the state level, Michigan lawmakers have introduced legislation that would temporarily halt data center approvals statewide. Gov. Gretchen Whitmer has opposed a statewide moratorium and has instead proposed measures intended to prevent data center development from increasing residential electricity costs. If state or federal legislation affecting Warren's authority is adopted, Schroeder said the issue could be brought back before council. City can't ban data centers, but can regulate themCouncil members also discussed the limits of what the city can ultimately do through its zoning ordinance Moore compared the issue to other land uses that municipalities cannot necessarily prohibit outright but can regulate by determining where they are appropriate. 'You can't just say we can't have topless bars or we can't have this,' she said. 'We just have to zone things appropriately so that they fit where we're going to put them.' Schroeder agreed with the broader zoning principle, saying the goal isn't just to prohibit data centers but to establish regulations aimed at protecting the city and its residents. 'That's exactly what we want to do with data centers, is make sure we have the best, strictest zoning ordinance that protects the community,' he said. 'But we can't outright ban it.' The moratorium can't remain in place indefinitely, he said, meaning the city will need to actively work on the ordinance during the moratorium. He compared the process to a moratorium put in place in the city previously against gas stations and car washes, which was adopted while the city considered changes to its regulations. Schroeder also pointed to litigation involving a data center moratorium in Gibraltar, saying Warren's resolution includes safeguards intended to avoid affecting existing applications or developments with established rights. 'Gibraltar, a city in the Downriver area, got sued for their moratorium because they were affecting some existing applications who had an interest in property,' he said. The city of Gibraltar is being sued by CAL Realty LLC and Raeden Acquisitions LLC, which allege the city's one-year moratorium pausing approvals and construction of data centers was done unlawfully, according to a complaint filed Aug. 17 in the U.S. District Court for the Eastern District of Michigan. The lawsuit alleges that the data center is permitted by right under the city's zoning ordinances, but the city has refused to consider the site plan. It also alleges that the city passed the moratorium in an attempt to circumvent the city's responsibility to approve the site plan. Schroeder said the safeguards put in place through Warren's moratorium will help protect them against such issues. 'We've put some safeguards in here to try to prevent that litigation,' he said. 'I don't think we're going to see litigation here.'