###

PREVIOUSLY: Eureka City Council Approves Temporary Ban on Data Centers; 45-Day Moratorium to Take Effect Immediately

###

The Eureka City Council is moving forward with new zoning rules that would restrict the size and placement of data centers in the city. 

After weighing three regulatory options at last night’s meeting, the council directed staff to develop zoning regulations that would allow small data centers (20,000 square feet or smaller) to be built in industrial areas of the city, with a potential ban on large facilities. Under the proposed rules, data centers would require a conditional use permit rather than being permitted outright, allowing for robust public review.

The direction comes two weeks after the city council passed a 45-day moratorium on data center siting to prevent the development of such facilities while staff develop a long-term ordinance that will incorporate the council’s direction.

At the outset of last night’s discussion, Development Services Director Cristin Kenyon defined a data center as “a building, or portion of a building, primarily dedicated to housing and operating computer servers and related equipment.” She emphasized that data centers “vary enormously in scale,” and compared the EdgeConnex facility in Arcata, which draws about one megawatt per day, to enormous facilities being constructed across the country.

Kenyon | Screenshot

“New data centers in 2026 commonly seek 50 to 100 megawatts, and the largest AI campuses can require hundreds or even more than 1,000 megawatts,” Kenyon said. “To put those numbers in perspective, PG&E uses roughly one to two kilowatts per housing unit as a general planning estimate. So, a one-megawatt data center is roughly equivalent to the electrical demand associated with 500 to 1,000 homes. PG&E has told us that one substation serving Eureka is already at capacity, and one has about 10 megawatts of remaining capacity, with a planned upgrade to add more capacity.”

There are also different types of data centers, Kenyon said. Some facilities are used for basic data storage, while larger facilities host thousands of servers for AI and cryptocurrency mining. 

“As they become larger in scale, data centers demand large continuous electrical loads and potentially large amounts of water for cooling,” she continued. “The concentration of electrical equipment, batteries and backup power raises public safety considerations. Cooling and power equipment can operate around the clock, creating noise impacts. Reliance on backup fossil fuel generators can create air quality and greenhouse gas emission impacts.”

Kenyon explained that an ordinance is needed to amend the city’s zoning code to allow data centers to be regulated. She gave the council three options: 

• Option 1: Ban data centers. This option would prohibit data centers as a “primary land use” but allow “computing infrastructure that is incidental and subordinate to another primary use” as an accessory use, as stated in the staff report.
• Option 2: Allow small data centers. This option would restrict data centers based on size and require a conditional use permit rather than being permitted by right. “This would allow the City to impose project-specific conditions or outright deny a project if it was found that the use is not consistent with the General Plan, not suitable for the site, not compatible with existing and planned land uses in the vicinity, or detrimental to public health, safety, or welfare.” This option would also require an extensive public review process.
• Option 3: Tiered regulation. In addition to small data centers, this option would allow larger facilities in limited circumstances, which would be “subject to substantially more stringent requirements.”

At the tail end of her presentation, Kenyon noted that some people have likened the AI boom and proliferation of data centers to the construction of the national highway system. She posed the question: “Could a larger data center ever leave Eureka better off than if it was not built?”

“Brainard, I think, gives us a useful test case for that question,” she said, referring to the former California Redwood Company mill site north of Eureka on Highway 101. “It’s a 76-acre, aging, underutilized industrial site that has some unusual characteristics. … If a very large investment were proposed here, could we leverage that investment to address some of these existing constraints and leave behind infrastructure or other improvements that have value to Eureka beyond the project itself?”

Improvements could include infrastructure enhancements (sewer/water extensions, electrical upgrades, etc.) and remediation of existing environmental liabilities. The city could potentially require a data center developer to implement renewable energy on site and recycled-water infrastructure to offset impacts. 

“It’s an interesting test case,” Kenyon said.

Only one person spoke during the public comment portion of the discussion. Humboldt Waterkeeper Executive Director Jen Kalt described some of the environmental concerns surrounding data centers, including wastewater contamination.

“Some waterkeepers in Georgia, in particular, have been testing the discharge from some of these facilities and finding things like PFAS and heavy metals,” Kalt said. “There’s another one in Wyoming that, for some reason, had a virus in the discharge. I don’t really understand why, but it’s a pathogen that is antibiotic-resistant and causes a lot of harm to people who are immunocompromised.”

Kalt added that data centers “aren’t the greatest use of the city’s real estate.” She felt the land that the Arcata facility sits on could have hosted a business that would create local jobs. “But now Arcata has this building with a fence around it and maybe two or three people working in there where there used to be a lumber store.”

During the council’s discussion, Councilmember Leslie Castellano asked City Manager Miles Slattery which developers had contacted the city about building a data center, something he alluded to at the Sept. 1 meeting.

“I don’t think we ever got that far with them,” Slattery said. “They were just kicking the tires.”

“Often you don’t know,” Kenyon added. “When one of these big companies goes into a jurisdiction, they often are not announcing who they are … and they’re having consultants ask on their behalf because they’re worried about the public reaction to it. That is an issue with data center development.”

Kenyon said developers had asked the city about developing Brainard, as well as a site on Broadway and another near the Samoa Bridge, both of which are currently zoned service commercial.

Councilmember Scott Bauer acknowledged that the AI industry has had a huge impact on the national workforce, eliminating tens of thousands of jobs. “That’s not the business that we’re in as a city,” he said.

Bauer acknowledged the local “need for computing power,” and spoke in favor of Option 2, which would allow for small data centers.

Bauer | Screenshot

“I don’t see the need for a large data center, especially given our constraints with power,” he said. “When it comes to where to locate these things, I think … industrial would be the reasonable spot, but consider setbacks … for ambient noise. You hear the stories about these things [being] really noisy, so we need to consider noise setbacks.”

Councilmember Renee Contreras-DeLoach spoke in favor of Option 1, which would prohibit data centers. “I think it’s a poor use of finite resources, and I think that it would be … in opposition toward other goals that we have set environmentally, with housing and with our energy use,” she said.

The rest of the council, however, spoke in favor of Option 2. Councilmember Kati Moulton said she would be in favor of Option 1 if it weren’t for the potential for loopholes. Councilmembers G. Mario Fernandez and Leslie Castellano were opposed to an outright ban out of fear that it could kill much-needed job opportunities. 

The council did not vote on the item, but Kenyon said she would incorporate its feedback into the draft ordinance and bring it back to council in the coming months. She noted that it will likely take more than 45 days, and advised that the moratorium will need to be extended. 

###

Other odds and ends from last night’s meeting:

• The council unanimously approved an ordinance establishing a registry for vacant and foreclosed properties. The ordinance is a sort of stand-in for the Vacant Building Ordinance that was passed two years ago, which has yet to be enforced. 

Not long after that ordinance was approved, the city’s legal team caught wind of a lawsuit challenging San Francisco’s “Empty Homes Tax,” a voter-passed initiative that sought to open the city’s housing stock to new renters by imposing steep penalties on property owners whose units sat vacant for more than 182 days a year. An appeals court recently issued a ruling finding the initiative was illegal and violated the Ellis Act, according to Eureka Attorney Robert Black. 

The registry approved at last night’s meeting will help staff get a better idea of the number, location, type and duration of foreclosed and vacant properties in Eureka.

• The council also received an update on the new operations complex that’s currently underway. The facility, located at the south end of town behind Lost Coast Brewery, will serve as the city’s new corp yard and emergency operations center in the event of a disaster. The council approved a $6.05 million contract for Adams Commercial General Contracting Inc. for construction of the third phase of the project.

• The council also heard an extremely thorough report on the feasibility study for improvements to the Elk River Water Treatment Plant outfall system. The council received the report but did not take any action on the item.