Gilbert Data Center Rules Tighten as Council Vote Slips to Fall

A town with one data center writes rules for the AI era

Gilbert, Arizona, has almost no data center industry. The town has a single facility, a 14,000-square-foot building run by US Signal at Sunrise Business Park, near McQueen and Elliot roads.3 Planners have said publicly that no developer has applied to build another.7 Even so, the town is drafting some of the strictest data center standards in the Phoenix area. Its own planners describe the proposal as "a bit more strict" than what neighboring jurisdictions have adopted.2

That gap between a near-empty field and heavy regulation is the story. Gilbert is not reacting to a bad experience. It is writing rules in advance because the AI-driven growth in computing infrastructure is reaching the edge of its town limits. When local coverage introduced the effort, it tied it directly to rising demand for artificial intelligence infrastructure.10 When the planning commission discussed the draft, the town also pointed to the digital economy, AI included, as the force pushing computing demand.7

What the draft would require

The proposal is an amendment to the town's Land Development Code covering water, power, sound, lighting and design.10 Town staff argued that data centers have land-use traits the current code does not handle, including how the buildings look, how much utility capacity they need, and how their sites are laid out.10 Today the code mentions data centers only twice: once to define them and once in a table of industrial uses.45

The main provisions, as reported across outlets:

• Zoning: Data centers would be limited to light industrial and general industrial districts. Business parks, where they are currently allowed with a conditional use permit, would no longer qualify.3
• Distance: Buildings would sit at least 400 feet from neighboring property lines and 650 feet from residential areas.2
• Water: Operators could not use the town's drinking water and could not use open-loop evaporative cooling.27 Planner Sal DiSanto said cooling towers often run water through only once when the town would like to see three or more cycles, which wastes water.
• Power: Sites would have to be near an existing or planned electrical substation. DiSanto said operators could use only the power available on the grid and would otherwise need their own supply.
• Design and nuisance controls: Buildings would be capped at 55 feet. Front facades would need windows or glass on 40% of their surface. Lighting would have to point downward. Applicants would submit sound studies, and staff has floated requiring a new one every year.9
• Safety: Facilities would face annual fire inspections. Operators would also have to file plans for decommissioning and transporting damaged or end-of-life batteries.3

One part of the draft was written for the kind of computing growth AI is driving. Smaller "accessory" data centers that serve only the business on the same site would be allowed by right if they take up no more than 10% of the main building's floor area.3

Where the coverage diverges

Outlets mostly agree on the substance, but they report the permitting process differently. A July trade report said developers could not change standards through the town's planned area development process and also could not seek a special use permit.2 A local paper's account of the same commission meeting said the reverse: developers would have to obtain a special use permit, and the PAD route would be closed. The later reporting supports the second version. At an August council study session, staff described the special use permit as the main review tool.3 This is more than a technical detail, because it decides who gets the final say.

The timeline also slipped. The town originally set a planning commission hearing for Aug. 5 and a council vote for Sept. 1.1 The commission did vote on Aug. 5 to recommend the amendment, citing long-term water supply concerns as Colorado River cuts approach.6 By late September, though, a town spokesperson said the council would not take up the rules until October or November.9 Reporting in between had pointed to Sept. 1 or Sept. 15.3

The council wants to go further than staff

The August study session is where the effort shifted from routine zoning to something close to a stance against the industry. Several council members said the staff draft was too weak.3

The sharpest argument was over reclaimed water. Staff would have let data centers draw from Gilbert's treated wastewater under the town's water allocation policy, with an annual cap set by permit.3 Water Resources Manager Lauren Hixson said half of the town's reclaimed water is stored in aquifers for future use.3 Councilwoman Bobbi Buchli wanted data centers to bring all of their own water. Councilman Jim Torgeson argued that reclaimed water still ends up as groundwater taken from residents.3 Torgeson said he would not support the rules unless they required closed-loop glycol cooling.3 Councilwoman Yung Koprowski suggested limits on both water and power use.3

Councilman Chuck Bongiovanni raised a governance issue. Under the staff design, special use permits and design review end at the planning commission, so a large data center on properly zoned land could be approved without the council ever voting on it. He called that "a pretty dangerous loophole."3 He asked whether staff could make the rules so hard to meet that nobody could build. Staff told him that was not legally possible, and agreed to work with town lawyers on requiring council approval instead.3 Torgeson was blunt about his goal, saying he wanted the rules to be "brutal."9

Mayor Scott Anderson urged restraint. He argued that data centers are getting smaller and more specialized, and that a rule written too broadly could drive away other businesses that need on-site computing.3

The trade-off nobody has solved

The most important technical point came from Planning Commissioner Jenna Lyon, and it applies far beyond Gilbert. Banning both evaporative cooling and potable water leaves operators with two choices: costly air cooling or closed-loop systems. Lyon noted that the chips running AI workloads produce a great deal of heat, so the town would likely be saving water at the cost of using more electricity. Earlier in the year, Commissioner Brian Andersen pointed out that the industry says these facilities recycle 90 to 95% of their water.5 Councilman Monte Lyons noted that even closed-loop systems have to be refilled and flushed from time to time.3

In practice, this means local AI regulation is mostly resource regulation. Gilbert is not regulating algorithms, models or data. It is regulating the cooling water, the substations and the noise that come with the computing behind AI. A town in the desert can set rules on those things in ways it never could on the software.

A regional cascade, and a state backdrop

Gilbert is following other Arizona cities, not leading them. Phoenix, Chandler and Mesa wrote their own rules earlier. Tucson has been working on restrictions, and Florence set up an expert committee.1 Tucson's council approved major limits in August.6 The growth pressure is real. Savills Research found that data centers made up about one-third of all industrial construction in metro Phoenix in the fourth quarter of 2025, with close to 7 million square feet built in the East Valley.45

State politics have shifted in the same direction. A state law passed in June paused data center tax breaks for three years. Attorney General Kris Mayes called for a halt to new data center development in late August, pointing to Colorado River cuts.9 Staff has said openly that it is trying to stay roughly in line with neighboring cities and not stand out too far.3

The reading

The coverage shows what local AI-infrastructure rules are starting to look like. In a water-limited region, cities are not trying to attract data centers on the industry's terms. They are trying to make sure the industry pays its full costs. Gilbert has very little data center activity at stake and little competitive pressure, so it can afford to be strict. The real question for the council's fall vote is not whether the rules pass. It is whether the council closes the approval gap Bongiovanni identified and requires cooling that uses no water at all. Doing both would bring water use close to zero but could raise power demand, the trade-off Lyon warned about. For a town that wants to keep grid capacity for light-industrial employers, as Torgeson put it, that may be an acceptable price.3 Larger AI campuses would likely go elsewhere, and given the rest of the council's comments, that appears to be what most members want.