Sacramento mayor asks staff to study policies, impacts for data center proposals

Mayor Kevin McCarty on Tuesday requested that city staff study potential policies to guide Sacramento on data center proposals.

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McCarty cited growing “interest and curiosity — and somewhat concerns” about the issue. During an afternoon council meeting, he asked staff to take into account possible consequences for energy, water, infrastructure and neighborhoods, and study “what safeguards we may need if such a proposal is forwarded to the city of Sacramento for consideration.”

“I want Sacramento to be prepared if and when a project comes our way,” McCarty said.

McCarty’s request followed a report published Tuesday morning by PBS KVIE’s Abridged that a New York-based industrial real estate firm, Link Logistics, had been in talks with the Sacramento Municipal Utility District about a potential, “large load” data center in the city, exceeding 50 megawatts.

McCarty added that legislation on Gov. Gavin Newsom’s desk that would “give some local governments some certainty and protections.” The legislature recently passed Assembly Bill 2619, which would require data center operators to provide cities and counties with estimates of their expected daily and annual water usage.

Large data center projects across the country have faced backlash, and sparked debate over appropriate regulations for the sector’s AI-driven expansion. Another bill, AB 2469, contains further provisions around water preservation, and AB 2383 would require a tariff from data center operators based on their electricity demands. The bills’ supporters argued that the state lacks a complete understanding of data centers’ water usage, while opponents believed the existing reporting sufficient, and posited that new laws would create undue burdens.

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As of Tuesday, the city of Sacramento hadn’t received any applications to establish a new data center, city spokesperson Jennifer Singer said. And while the city has no ordinance that specifically prohibits data centers, the centers don’t have a land use in the city’s zoning code, and the city can only permit land uses that are defined in the code.

SMUD said in a statement that the utility can’t release details about specific projects or their locations due to customer privacy. The utility has provided power to data centers for decades, though in light of recent interest for larger-scale projects, it is developing new policy for those types of requests. The utility has no customers that require beyond 50 megawatts, but has received one application of that scale, it said.

Link Logistics has owned property at Depot Park in Sacramento since 2018, the company said in a statement Tuesday afternoon. It recently developed a 477,000-square-foot industrial building there and received approvals for two more of a combined 374,000 square feet. But, the company said, it has not yet submitted any “additional project application.”

“Any future redevelopment would go through the City of Sacramento’s full entitlement and environmental review process, with transparent community engagement along the way,” the statement said.

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