Memphis Weighs a Pause, a District and a Rulebook

MEMPHIS, Oct. 19 — WhenWhen the City Council here meets on Tuesday afternoon, it will have not one data-center ordinance up for a final vote but three, and they pull in different directions. One would pause new permits. One would swap the pause for a “digital infrastructure district” that promises developers timed reviews and the city a floor on its tax take. The third would set hard rules: closed-loop cooling only, and power matched entirely by renewable or “non-carbon” sources 10 years after opening.

Whether the council votes on them on Tuesday may turn on a federal judge, who at 1 p.m. Monday is to hear a challenge from protesters banned from its meetings.

The agenda’s descriptions name no data-center developer, though ABC24 reports that Memphis already has several SpaceXAI data-center sites, and the city already collects from the industry: on Tuesday a committee takes up spending $3,259,282 in “Data Center Revenues Collected During FY2026” on nine projects and programs.

The Bills

The moratorium, Ordinance 5982, has four sponsors, among them JB Smiley Jr. and the council’s chairwoman, Jana Swearengen-Washington. It would temporarily halt “the acceptance, processing, approval, and issuance” of zoning, building and related permits for data centers, and has been held over twice.

Philip Spinosa’s Ordinance 5985 would “replace a blanket data-center moratorium with source-neutral, tiered, and timed review” for projects of 10 megawatts or more.The TiersTier I is at least 10 but less than 25 megawatts; Tier II, at least 25 but less than 50; Tier III, 50 or more. Tier I has a target for an initial coordinated determination within 30 business days of a substantially compliant submission; Tiers II and III have review targets of 60 and 90 business days after a complete technical record. The draft says these are not guarantees of approval. No tax deal could cut the city’s take on servers and other computing gear below the full property tax, and, after a commissioning period of up to 90 days, projects of 25 megawatts or more could not routinely cool with drinking water without a time-limited council waiver. The packet copy is headed “DRAFT – PENDING LEGAL AND COUNCIL REVIEW.”

Jeff Warren’s Ordinance 5986 would require every new data center to use closed-loop cooling, and to match at least 60 percent of its electricity with renewable or non-carbon power at opening, rising to 75 percent after three years, 90 percent after six and 100 percent after 10. A 20-megawatt threshold for a “large” center triggers further review. Applicants would answer for “incremental electrical infrastructure costs” their projects cause, where the law permits. Existing centers could keep running but would have to report their water and power use within a year.

Neither alternative is a clean rival to the pause. Mr. Warren’s recites that the council “enacted Ordinance No. 5982” to make time for permanent standards, which it then supplies. Mr. Spinosa’s would end “the pending data-center moratorium” only when its own rules take effect, with “no interval” between them; those rules await, among other things, a large-load policy from Memphis Light, Gas and Water. Two more ordinances, on zoning and siting, are up for second reading.

The Court

Six people banned from council meetings after the Oct. 6 session recessed amid protests, among them state Rep. Justin J. Pearson, a Democrat running for Congress, sued the council and its chairwoman in federal court last week to be let in on Tuesday. On Friday, Judge Thomas L. Parker asked for more evidence, including video, without saying how he would rule, The Commercial Appeal reported.

Allan Wade, the council’s longtime lawyer, offered to put off some data-center items if the judge had not ruled by Tuesday. The judge seemed interested, the paper reported, but the plaintiffs’ lawyers said they would confer with their clients.

On Oct. 9 Mayor Paul Young ordered a 90-day expert study of land use, water, energy costs and more, which he said “does not suspend, delay, restrict, or interfere with council action,” the Memphis Flyer reported.

Next Door

On Oct. 12 the Shelby County Commission passed a 12-month moratorium for unincorporated areas on first reading, 5 to 4 with four abstaining; some commissioners question the county’s legal authority, ABC24 reported. Millington approved a six-month moratorium the same day, though it had received no data-center proposal.Across the LineBefore the city could seek bids for its first district, Mr. Spinosa’s draft would have an independent underwriter compare a representative 100-megawatt campus over 20 years (taxes, incentives, utilities, land, water and schedule) in Memphis, in Southaven and DeSoto County, Miss., and in at least one other market. “I just feel like with them being allowed to come here and set up that it’s gonna create extra money on the consumer,” Danette Leonard, who lives near SpaceXAI’s Whitehaven site, told ABC24.

Virginia, where an April analysis by the Pew Research Center counted nearly 400 operating data centers, now has a statewide pause on file. Senate Bill 843, prefiled on Oct. 9 by two Democrats, Sens. Russet Perry and Danica Roem, would bar local approval of rezonings, special-use permits and site plans for data centers from July 1, 2027, until July 1, 2030. State agencies, including the State Corporation Commission, could not approve their permits or the lines and generation to serve them.SB 843It would add a section titled “Siting of data centers; moratorium” to the Code of Virginia. It has been referred to the Senate Committee on Local Government.

“We already have more data centers than anywhere else in the world,” Ms. Perry said, the Virginia Mercury reported. Ms. Roem is also filing a bill to block new data centers until Dominion Energy’s queue of large customers is energized: about 25,000 megawatts with energizing dates and 75,000 without, a wait Dominion puts at about seven years, the Mercury reported. Sen. Glen Sturtevant, a Republican, plans his own bill, the paper reported, saying data centers’ power costs are “being subsidized by Virginia ratepayers in their electric bills.”

We already have more data centers than anywhere else in the world.

The Data Center Coalition, an industry group, told the Mercury that data centers have invested $80.56 billion in Virginia and generated $5.34 billion in state and local taxes. Moratoriums, Nicole Riley of the coalition told the paper, could force jurisdictions to give up investment, jobs and “critical tax revenue to neighboring states.”

Judge Parker hears the plaintiffs at 1 p.m. Monday and the council meets at 4 p.m. Tuesday; Shelby County’s pause still needs two readings, the mayor’s study is due by early January, and Virginia’s General Assembly convenes on Jan. 13.