The City Council in Chandler, Arizona has unanimously rejected a proposal to rezone land for a large artificial intelligence data center, ending a months-long debate that drew national attention and highlighted the growing tension between local governments and the fast-moving AI industry.
The decision blocks a New York–based developer’s plan to build a roughly 400,000-square-foot data center campus on a site that currently includes an abandoned office building. The project had become a flashpoint not only because of its scale, but also because of the involvement of former U.S. Sen. Kyrsten Sinema, who appeared at earlier public meetings to urge local officials to consider the national importance of AI infrastructure.
But for Chandler officials, the vote ultimately came down to local impact rather than federal or industry priorities. Vice Mayor Christine Ellis said she repeatedly asked supporters of the project how it would benefit Chandler residents. Without a clear answer, she concluded that the city should not move forward.
Big Investment
The proposal arrived as Arizona continues to attract major investments tied to data centers, semiconductors and AI. Supporters argue those facilities drive investment in Arizona from sectors that are rapidly growing, including everything from mobile apps to next-gen business software. But opponents in Chandler focused on familiar concerns: water use, energy demand, noise and the long-term strain on local infrastructure.
Residents packed the council chambers for the final vote, many holding signs opposing further data center development. According to city records, more than 200 public comments were submitted against the rezoning request, compared with fewer than a dozen in support.
Project representatives said the facility would rely on a closed-loop cooling system designed to significantly reduce water consumption compared with older data centers. City officials, including Chandler’s water resources manager, told the council that projected water use fell within normal ranges for a building of that size.
Still, critics argued that the broader impact extends beyond a single site.
Experts note that water and electricity demands tied to data centers also include the resources needed to generate the power they consume. Utilities across the region are preparing for sharp increases in electricity load as more data centers and chip plants come online. Arizona Public Service has warned that if all proposed projects move forward, overall capacity would need to more than double.
The Chandler proposal also carried economic promises. Developers said the project could attract advanced technology firms and create up to 1,000 jobs, both directly and indirectly. Some local technology leaders argue that continued data center expansion is necessary to keep Arizona competitive as a hub for innovation.
Yet the council’s vote reflects a broader pattern. Cities across Arizona, including Phoenix and Tucson, have tightened zoning rules or imposed additional requirements on data centers. Similar rejections or restrictions have emerged in communities in Oregon, Missouri, Virginia and Indiana.
The Power of Local Residents
Senator Sinema’s involvement elevated what might otherwise have been a routine zoning dispute. Appearing on behalf of the AI Infrastructure Coalition, she warned local officials that federal authority could eventually override local decisions around AI development. She praised the Trump administration’s efforts to accelerate data center construction and counter what she described as misinformation about their environmental impact.
Despite that pressure, the Chandler vote underscores that much of the AI buildout still depends on local approvals. Even as federal agencies streamline permitting and Washington debates broader AI policy, city councils remain gatekeepers for land use decisions.
