Your family photos, cloud files, and even social media posts discussing a proposed data center depend on a physical place to store and process information. The digital world may feel invisible, but the infrastructure that supports it is anything but. As demand grows, communities are facing increasingly complex decisions about land, electricity, water, and neighborhood character.

For local government leaders, those decisions are becoming more consequential, raising a practical question: How can communities meet growing digital demand while protecting local priorities?

That question drove a standing-room-only ICMA Annual Conference session, “Navigating Data Center Development: Practical Insights from Experienced Local Government Managers.” Panelists Reena Brilliot, Scott Butler, Michelle Crandall, and Robby Hammond drew on experiences from Mesa, Arizona; Hillsboro, Oregon; and Santa Clara, California, to examine development moving faster than many local policies.

When Recruitment Becomes Reassessment

Mesa once actively welcomed data centers. State tax incentives, favorable development conditions, and interest from major technology companies helped attract an industry that now encompasses 15 projects totaling 18.3 million square feet, including facilities operating, under construction, or permitted.

But as development grew, the conversation changed. Sites envisioned as business parks became data center campuses. Residents questioned their appearance, proximity to homes, and relatively limited permanent employment.

“We didn’t really know what we didn’t know at the time,” Butler said, describing Mesa’s earlier approach of treating data centers as indoor warehousing and storage.

In 2025, Mesa adopted requirements for council approval of new, previously unapproved data centers, strengthened design standards, and directed development toward heavy industrial areas. Mesa’s experience shows why local governments should define the use before existing zoning defines it by default.

One Industry, Different Local Realities

For Hammond, Hillsboro’s experience challenged the assumption that every data center creates the same demands.

“They’re all very different,” he said.

Water consumption remains a concern in Hillsboro, even though data centers account for less than 2% of city water use, according to Hammond. He pointed to the city’s cooler climate and cooling systems as factors behind that figure. Hillsboro’s experience shows why broader concerns about data centers must also be considered through the lens of local conditions and evidence.

Land presents a different challenge. With limited industrial acreage, Hillsboro must consider how data center demand affects prices and opportunities for other employers. The city initiated a moratorium process while pursuing code changes and commissioning economic and environmental studies. That work is intended to inform future development standards and give residents a clearer basis for evaluating impacts.

Following the Electricity and the Money

Across all three cities, electricity emerged as one of the defining issues. Local leaders must understand not only how much power a facility requires, but also what infrastructure that demand triggers and who ultimately pays for it.

Butler described Arizona utilities requiring substantial upfront infrastructure funding from data centers. Hammond pointed to the potential for industry-funded improvements to strengthen the broader grid.

Santa Clara brings another dimension to the issue through its municipal electric utility, Silicon Valley Power. Brilliot explained that the city stopped accepting additional data center applications in 2023 because it lacked electrical capacity, even as it worked toward expansion.

The fiscal stakes are equally significant. Santa Clara’s 55 standalone data centers contribute 9% of its general fund, Brilliot said. She connected that revenue to services residents see and use, including libraries and parks.

Her advice was to look at the full revenue picture rather than property taxes alone.

Making Community Benefits Count

Revenue alone does not answer the question residents are most likely to ask: What does this development mean for my community?

That question is pushing local leaders to look beyond traditional economic measures and consider what data center development should deliver locally. Panelists pointed to stronger architectural standards, greater separation from surrounding uses, recycled water infrastructure and community benefits. Santa Clara also includes data centers in its commercial development fee framework supporting affordable housing.

Community benefits are only part of the equation. Residents also want to understand how local leaders are addressing concerns about land, infrastructure, utilities and neighborhood impacts. Hillsboro maintains extensive online FAQs, while Mesa explains the guardrails and accountability measures guiding future development.

These efforts reflect a larger shift. Local leaders are moving beyond deciding whether projects proceed to defining what responsible data center development should look like and what communities should expect in return for the resources these facilities require.

Setting clear expectations early gives communities greater influence over development and helps ensure growth reflects local priorities.

Continue the conversation: How well do you know who your communications are actually reaching? 

Join ICMA and Granicus on December 3 for a free webinar exploring how local governments can identify gaps in their outreach, reach the audiences that matter most, and measure engagement through meaningful participation and outcomes. Register for the free webinar