Henderson council says it will opt for strict development agreements instead of freeze on data centers

Editor's note: Este artículo está traducido al español.

The Henderson City Council on Tuesday set aside a vote on a proposed 180-day moratorium on new data centers, opting instead to direct staff to revise the standards that will govern future applications for such facilities.

“There has to be a framework of laws and ordinances for us to refer to,” Henderson Mayor Michelle Romero said during Tuesday’s council meeting. “To me, a development agreement proactively gives us the ability to change the codes now and adaptively update them as technology changes. We may or may not ever get an application, but at least we would be ready with a framework that we can rely on.”

After nearly two hours of discussion and public comment, the council directed city staff to draft regulations governing the future licensing of data center construction within city limits.

Council members said the regulations should make clear that developers hoping to bring a data center to Henderson would need to negotiate an individual development agreement with the city.

The agreement process being developed is expected to include strict requirements for applicants to address water consumption, potential strain on the local electrical grid, noise generated by the center and other site-specific concerns. Applicants would need to clear the requirements before their projects would be forwarded to the city’s planning commission and, ultimately, the city council for public review, discussion and consideration.

City Attorney Nicholas Vaskov said code changes would prove more permanent and effective in the long run than a 180-day moratorium. Eddie Dichter, the city’s director of community development and services, noted that city staff members have consulted energy efficiency experts and environmental advocacy groups, revisited existing code language and worked to develop a revised development agreement.

In June, Romero requested that an ordinance be drafted to impose a ban of up to 180 days on conditional use permit applications for data centers. According to a draft of the ordinance, the moratorium would have allowed the city to “conduct a thorough review,” update sections of the Henderson Municipal Code related to data center developments, and consider the potential effects of such developments within city limits.

The draft also called for city staff to weigh a range of issues tied to the construction and operation of data centers, including energy demands, water consumption, air quality effects, heat generation, economic and community benefits, land use compatibility, proximity to residential areas, decommissioning plans and environmental effects.

The council would have had the authority to lift the ban before the 180-day period expired.

Dichter said there are currently no data center applications on file with the city.

As of June, more than 60 data centers were operating statewide, including at least 30 in the Las Vegas Valley, with dozens more proposed or under construction.

Desert Research Institute, in a study released six months ago, found that the water needed annually to cool 12 data centers under a “medium efficiency scenario” would equal the drinking water used by more than 24.1 million U.S. adults, or more than 27,600 households. The study also found that data centers already consume nearly a quarter of Nevada’s electricity.

NV Energy estimates the 12 planned projects would require about 5,900 megawatts of power — roughly 2.8 times the capacity of Hoover Dam.

In Southern Nevada, long regarded as a model for water conservation, that demand has heightened concerns about the region’s limited water supply.

Google’s Henderson facility, the state’s largest data center, used at least 205 million gallons of water for cooling in 2024, according to a 2025 environmental report. The Southern Nevada Water Authority, the regional agency responsible for treating and managing wholesale water supplies, infrastructure and conservation programs, has since banned the evaporative cooling method for new data centers in Clark County.

The local debate reflects a broader national shift as demand for data centers surges alongside the growth of artificial intelligence. The link is direct: AI applications — from chatbots to image generators to recommendation algorithms — require vast amounts of computing power to train and operate, and data centers house the servers that provide it. As AI use has expanded, so has the industry’s appetite for the electricity and water needed to run and cool that infrastructure.

Communities across the country have begun pushing back against new data centers because of their strain on land, water and power resources.

A Pew Research Center report released June 17 found that 40% of Americans believe AI will be bad for society, while 31% expect it to negatively affect their own lives. About 63% said AI development is moving too quickly, and 71% expressed concern about data security.

Henderson City Council members largely echoed similar sentiments, thanking constituents for their engagement and emphasizing the need to mitigate any potential consequences of data center development in order to protect residents.

More than a dozen concerned residents and environmental organizations voiced their concerns to council members about data centers, pointing to excessive water and electricity usage, heat emissions and noise pollution as major issues associated with the facilities.

Some urged the council to pass the 180-day moratorium, while others called for extending it or banning new data centers altogether.

“We are fortunate enough to be able to pause for a moment, assess how other data centers have negatively impacted communities across the nation and ask if we really want to deal with that type of fallout ourselves,” said Neil Carman, a Henderson resident. “We need your leadership at the local level to hold these businesses accountable with meaningful regulation and safeguards before proceeding.”

Industry leaders and some elected officials have treated data center expansion as an unquestioned good, the Sierra Club Toiyabe Chapter said in a news release condemning the council’s decision. It said the action falls short of the temporary pause residents requested to allow the city time to develop comprehensive regulations before additional projects move forward.

“Today’s decision is a missed opportunity,” said Cullen McGinnis, organizer with the Sierra Club Toiyabe Chapter. “Residents asked the council for a temporary pause so Henderson could put strong guardrails in place before approving additional data centers. Instead, the city chose to continue accepting proposals without first adopting comprehensive standards. While requiring development agreements is better than the status quo, it is not a substitute for clear, enforceable ordinances that protect Henderson residents, taxpayers, natural resources and public health.”

The controversy surrounding data centers in Nevada isn’t limited to Henderson.

In Boulder City, the city council voted unanimously July 14 to appeal the Bureau of Land Management’s approval of an 80-acre data center on federally owned land within city limits.

Clark County is in the process of developing regulations for data centers, while other cities like Reno have already passed moratoriums on new data center construction.