Title
Authorization to Grant 5C Data Centers (5C) a Binding Waiver of Enforcement (Waiver) of the Special Permit Provisions for Data Centers (Ordinance S-53089) - District 4
Description
Request authority to grant 5C Data Centers (5C) a Binding Waiver of Enforcement (Waiver) of the Special Permit Provisions for Data Centers under Ordinance G-7396.
Report
Summary
Following the City of Phoenix’s adoption of Ordinance G-7396 on July 2, 2025, which established a regulatory framework for data centers, 5C submitted a demand to the City under Arizona Revised Statutes (A.R.S.) Section 12-1134, asserting that the ordinance diminished the fair market value of its property located at Assessor's Parcel Numbers 108-15-002D and 108-15-002B.
Parcel Address: 2802 W. Palm Lane
Owner: 5C Data Centers (5C)
Representative: Jason Morris, Withey Morris Baugh, P.L.C.
A.R.S. Section 12-1134(E) authorizes the City Council, in its sole discretion, to resolve a demand received by the City for compensation by granting a binding waiver (Waiver) of the land use requirement. In this case, the City has received a demand for compensation from 5C based on the special permit requirements for data centers. The special permit requirement set forth in Ordinance G-7396 were enacted by the City Council to address public health and safety concerns and to mitigate adverse secondary impacts on surrounding neighborhoods, businesses, and residents.
The purpose of the special permit requirement for data centers is to protect public health and safety. Therefore, before considering any Waiver the City needs to confirm that a proposed data center will address and mitigate potential health and safety impacts on neighboring properties, which would otherwise be accounted for in the special permit process and which include among other things, fire and public safety threats, hazardous materials, energy use, water use, and noise pollution. The Waiver describes requirements for each category to comply with Ordinance G-7396. At the City’s request, 5C has submitted detailed information and committed to measures designed to mitigate the potential impacts of its proposed data center.
The Planning and Development Department reviewed the information submitted by 5C and determined that the City is able to resolve this demand for compensation by granting the requested Waiver without compromising the health and safety concerns identified in the ordinance. Staff found that 5C's mitigation commitments adequately address the ordinance’s public health and safety objectives, enabling the City to resolve this dispute without incurring the cost of litigation. The City Manager reviewed and makes a recommendation to approve the Waiver request. Specific requirements to accomplish the health and safety protections that would otherwise be accomplished through the special permit process will be outlined in the waiver, which will be available to the public 24 hours prior to the meeting. The requirements may be modified after the Waiver is published.
Location
Council District: 4
Parcel Address: 2802 W. Palm Lane
Department
Responsible Department
This item is submitted by Assistant City Manager Lori Bays and the Planning and Development Department.