55575.18145\45330059.1
CITY COUNCIL STAFF REPORT
DATE: AUGUST 26, 2026 BUSINESS & LEGISLATIVE
SUBJECT: ADOPTION OF AN URGENCY MORATORIUM ORDINANCE TO
TEMPORARILY PROHIBIT THE ACCEPTANCE, PROCESSING, OR
APPROVAL OF DATA CENTERS
FROM: Scott C. Stiles, City Manager
BY: Department of Planning Services
SUMMARY:
Data centers are defined as facilities that are intended to store vast amounts of data and computer systems that can perform complicated tasks and functions to support the needs of traditional computing and artificial intelligence (AI).
While data centers play a vital role in today’s digital landscape, their socio-environmental impacts have raised concerns from multiple jurisdictions in the Coachella Valley and throughout the country. Those concerns have led to the subsequent adoption of urgency ordinances by other legislative bodies to temporarily prohibit data centers and similar land uses while more robust regulations are developed regarding their development.
The cumulative impact of this new and rapidly growing land use warrants that the City Council consider adopting an urgency ordinance to temporarily prohibit accepting, processing, or approving any applications, permits, entitlements, or other approvals related to data centers while the City evaluates such uses as part of the ongoing citywide Zoning Code Update.
California law requires that an urgency ordinance prohibiting designated land uses must be adopted by a 4/5 vote of the City Council for an initial period of forty-five (45) days.
After that 45-day period, the City Council can act to extend the urgency ordinance so that the moratorium would be effective for a total term of one or two years.
RECOMMENDATION:
That the City Council adopt, by a four-fifths vote, an urgency ordinance implementing a moratorium on the acceptance, processing, or approval of applications, permits, entitlements, or other approvals related to data centers, effective immediately upon adoption (Attachment A).
City Council Staff Report
August 26, 2026 -- Page 2
Urgency Moratorium Ordinance - Data Centers
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BACKGROUND:
Following technological advances in recent years, data centers have drawn increased attention due to their heavy infrastructure and resource demands that can create adverse effects on the physical environment and socioeconomic conditions in their host communities.
In response, multiple local governments across the country have started implementing measures to mitigate the potential impacts of data centers. Locally, jurisdictions such as the City of Indio, the City of Coachella, and the City of Desert Hot Springs recently adopted urgency ordinances, along with extensions thereof, to temporarily prohibit data centers and similar land uses while they conduct comprehensive analyses of data centers and their potential impacts or prepare for the adoption of an ordinance for the permanent prohibition of such uses.
The Palm Springs Municipal and Zoning Codes currently do not provide definitions or regulations pertaining to data centers and their related uses, and there are no policies or guidelines in effect for such uses. Generally, under the City’s Zoning ordinance, any uses that are not specifically permitted are prohibited. Therefore, arguably, data centers are already prohibited within the City of Palm Springs. However, if the City Council wanted to adopt an ordinance to avoid any argument to the contrary, the Council could do so.
STAFF ANALYSIS:
The following concerns are associated with data centers:
1. Environmental Impacts:
Data centers generally operate continuously, and they require a significant amount of electricity. The electricity consumed by the equipment in turn generates a substantial amount of heat which must be removed constantly to maintain equipment functionality and efficiency. Depending on facility design, data centers may depend on water cooling systems to mitigate the heat.
These electricity and water demands raise concerns regarding the local resource availability, allocation, and cost, particularly where water supply is already stressed.
Furthermore, some of the electricity supplied to data centers may be generated from fossil fuels, and some facilities may rely on backup or supplemental power generated by natural gas or diesel that may contribute to potential air pollution.
2. Employment:
Data center operation is generally automated and does not require many full-time on-site staff. While data centers may offer short-term employment during their initial construction phase, they currently generally offer limited long-term employment due to the nature of City Council Staff Report
August 26, 2026 -- Page 3
Urgency Moratorium Ordinance - Data Centers
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their operation. Additionally, they frequently generate very low employment densities relative to the amount of land consumption required. This raises concerns about where they can logically locate given that the City of Palm Springs has limited developable land on which to accommodate employment-generating uses.
3. Community Benefits:
Their facilities generally require a substantial amount of equipment and a building to accommodate it. Suburban and rural areas may be perceived as desirable locations for data centers, as they often offer large undeveloped land at a lower cost. In addition to buildings, data center operation requires auxiliary infrastructure development for data transmission and connectivity. Depending on land use regulations, policies, and the location of the data centers, the existing land stock and environmental assets may be compromised, with limited community benefits.
While data centers may generate some tax revenue, sophisticated analyses are necessary to understand their overall impact on the community.
Although the ongoing review of the City’s Zoning Code can further analyze these issues and provide a more robust regulatory framework, today’s rules lack clarity on how to best locate such uses and mitigate potential impacts on the community.
Moratorium Ordinance
California Government Code Section 65858 authorizes a city to adopt, as an urgency measure, an interim ordinance prohibiting land uses that may conflict with contemplated general plan, specific plan, zoning, or development standard amendments that the City is studying or intends to study within a reasonable time. California Government Code Section 65858 requires that the City Council find that there exists a current and immediate threat to the public health, safety, or welfare, and that the approval of additional use permits, building permits, subdivisions, variances, or other entitlements would result in that threat to public health, safety, or welfare. The proposed Urgency Ordinance would prohibit the approval of any land use entitlement for a “Data Center” in the City of Palm Springs.
Under California law, an interim urgency ordinance prohibiting designated land uses must be adopted by a 4/5 vote of the City Council. The urgency ordinance is effective for forty- five (45) days. After that 45-day period, the City Council can act to extend the moratorium for an additional ten (10) months and fifteen (15) days. Thus, the term of the moratorium can be a year.1
Under the proposed Urgency Ordinance, “data center” would mean a structure or site used primarily for the storage, management, processing, and transmission of digital data 1 The Government Code alternatively allows this extension to be for a period of twenty two (22) months and fifteen (15) days, for a total of two (2) years.
City Council Staff Report
August 26, 2026 -- Page 4
Urgency Moratorium Ordinance - Data Centers
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and that houses computer or network equipment, systems, servers, appliances, and other associated components related to digital data storage, processing, and related operations. Data center uses include data storage facilities, small data storage facilities, server farms, artificial intelligence training or processing, image processing, cloud computing, email servicing, and other similar uses and appurtenant facilities.
Required Findings
The City Council must adopt specific written findings supporting the existence of a current and immediate threat to public health, safety, or welfare. The following findings support adoption of this Urgency Ordinance and are also contained in the Ordinance:
Absence of Regulatory Framework. The City of Palm Springs’s Municipal Code does not define or regulate data centers as a land use category. No zoning standards, performance requirements, setback rules, noise standards, utility demand thresholds, or environmental mitigation requirements specifically applicable to data centers have been adopted. Absent a moratorium, a developer could submit and process a land use application under existing zoning designations not designed to accommodate such uses, resulting in ambiguity as to whether that use is permitted and also what standards might apply to such application.
Need for Study. The City is currently in the process of updating its Zoning Code.
As part of this study, City staff and its consultant team intend to study whether such uses are appropriate. The temporary moratorium is necessary to ensure that no applications are approved in the interim while staff assesses the appropriateness of data centers within the City of Palm Springs.
Survey of Other California Communities
The following summarizes recent and similar actions by public agencies in California:
Monterey Park (Los Angeles County). On January 21, 2026, the Monterey Park City Council adopted an urgency ordinance establishing a 45-day moratorium on all data center development. The moratorium was subsequently extended through January 21, 2027. On April 20, 2026, the Council adopted ordinances designating data centers as a public nuisance and permanently prohibiting all data centers within city limits — making Monterey Park the first city in California, to enact such a permanent ban.
Montebello (Los Angeles County). On February 11, 2026, the Montebello City Council voted to adopt an urgency ordinance imposing a 45-day moratorium on data centers, including artificial-intelligence (AI) facilities, while city staff studies their impacts and develops permanent zoning standards. The citywide moratorium was enacted due to concerns over infrastructure, power, and water consumption.
City Council Staff Report
August 26, 2026 -- Page 5
Urgency Moratorium Ordinance - Data Centers
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Oakley (Contra Costa County). On April 14, 2026, the City of Oakley became one of the first Bay Area cities to adopt a temporary moratorium on data centers by adopting a 45- day urgency ordinance that blocks acceptance, processing, or approval of data center land use applications while the City studies regulatory standards. City leaders have stated their intent to develop permanent zoning standards by the end of 2026. In May 2026, the moratorium was subsequently extended by the City Council for an additional period of 10 months and 15 days.
Calipatria (Imperial County). In May 2026, the Calipatria City Council voted to advertise a public hearing on an interim urgency ordinance that would establish a five-year moratorium on the approval, permitting, construction, or expansion of large-scale data center facilities. The proposed ordinance defines “large-scale data center” as any facility exceeding 10,000 square feet of dedicated server space, 5 megawatts of projected electrical demand, or one acre of land dedicated primarily to such use.
El Monte (Los Angeles County). On May 17, 2026, the El Monte City Council adopted an urgency ordinance establishing a 45-day moratorium prohibiting processing, approval, and acceptance of new data center land use applications. The urgency ordinance was passed in order to allow staff time to evaluate impacts, gather public input, and draft zoning regulations for consideration.
Baldwin Park (Los Angeles County). On March 4, 2026, the City Council of Baldwin Park adopted an urgency ordinance establishing a 45-day moratorium on the approval, establishment, or operation of data centers in the City in order to allow City staff time to analyze and recommend regulatory options for establishing new or updated regulations for data centers. On April 15, 2026, the City Council held a public hearing to extend the urgency ordinance establishing a moratorium for an additional 10 months and 15 days as is permitted by law.
Imperial (Imperial County). On June 3, 2026 the City of Imperial will consider adopting a 45-day temporary moratorium on the approval of certain emergency high-energy industrial and technology uses, including data centers, battery energy storage systems, and similar utility-intensive industrial or technological uses.
Los Angeles County. On April 14, 2026, the LA County Board of Supervisors adopted a motion directing the Department of Regional Planning, Department of Public Health, and other departments to study the health, environmental, and safety impacts of data centers on neighboring communities, including impacts on electrical and water resources, and a review of how other jurisdictions are regulating data centers. The original motion included a potential moratorium; however, that provision was removed before final adoption. The resulting study is expected to be completed within 120 days.
California Legislation. In 2025, Governor Newsom vetoed legislation that would have regulated data center water and electricity usage. The lone surviving measure, SB 57 City Council Staff Report
August 26, 2026 -- Page 6
Urgency Moratorium Ordinance - Data Centers
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(Padilla), was signed into law on October 11, 2025, and requires the CPUC to report on ratepayer cost-shifting impacts of data center electricity loads by January 1, 2027.
City of Indio. On June 3, 2026, the City Council adopted a temporary (45 day) moratorium on data centers. On July 15, the Council extended the moratorium for 90 days and directed city staff to draft an ordinance permanently banning the use in all zones.
Desert Hot Springs. In July of 2026, the City of Desert Hot Springs voted to extend its initial moratorium for a total period of two years.
City of Coachella. In July of 2026, the City of Coachella voted to extend its initial moratorium for 10 months and 45 days. On August 12, 2026, the City Council conducted a first reading of an ordinance permanently banning data centers. It is expected that this ordinance will come back for a second reading on August 26, 2026.
If this urgency moratorium ordinance is adopted, it will return within 45 days with a progress report and materials for a public hearing to extend the moratorium for up to 10 months and 15 days. The timeline for adoption of the Urgency Moratorium Ordinance and related future actions is as follows:
Proposed Timeline for 65868 Urgency Moratorium Ordinance Adoption Task Due Date Notes
Adoption of 45-Day
Moratorium Ordinance
August 26, 2026 Expires October 10, 2026
Ten (10) Day Moratorium
Report
September 9, 2026 65858(d) – At least ten days
prior to the expiration of that
interim ordinance or any
extension, the legislative
body must issue a written
report describing the
measures taken to alleviate
the condition which led to the
adoption of the ordinance.
City Council Staff Report
August 26, 2026 -- Page 7
Urgency Moratorium Ordinance - Data Centers
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Hearing Notice Published for
October 10 Moratorium
Extension
On or before
September 20, 2026
65858(a) - After notice
pursuant to Section 65090
and public hearing, the City
Council may extend the
interim ordinance for 10
months and 15 days and
subsequently extend the
interim ordinance for one
year. Any extension also
requires a four-fifths vote for
adoption. Not more than two
extensions may be adopted.
65090 - notice must be
published pursuant to
Section 6061 in at least one
newspaper of general
circulation within the
jurisdiction of the local
agency which is conducting
the proceeding at least 10
days prior to the hearing, or if
there is no such newspaper
of general circulation, the
notice must be posted at
least 10 days prior to the
hearing in at least three
public places within the
jurisdiction of the local
agency.
Moratorium Extension
Ordinance Adoption
September 30, 2026
ENVIRONMENTAL ASSESSMENT:
Adopting an urgency ordinance has no possibility of resulting in a significant environmental impact. Instead, this moratorium maintains the status quo. Therefore, there is no potential for this ordinance to have any impact on the environment, and the ordinance is therefore exempt from further California Environmental Quality Act (CEQA) review pursuant to Title 14 of the California Code of Regulations Section 15061(b)(3).
City staff is directed to files a Notice of Exemption within five (5) days following adoption of this ordinance.
City Council Staff Report
August 26, 2026 -- Page 8
Urgency Moratorium Ordinance - Data Centers
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ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Infrastructure and Facilities.
FISCAL IMPACT:
Adoption of this Urgency Ordinance is not expected to have a significant direct fiscal impact on the City. Staff time associated with preparing the required written report and scheduling the extension public hearing will be absorbed within existing departmental budgets.
REVIEWED BY:
Department Director: Christopher Hadwin
Deputy City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENT:
A. Draft Urgency Ordinance