TO: Planning Commission
THRU: Craig Harmon, CZO - Senior Planner
FROM: Demetrios Moutos - Planner I
DATE: October 21, 2025
RE:Title
TA25-05 (Data Centers): Amend Article 30-9.D (Definitions), Article 30-4.A.2 (Use Table), Article 30-4.C (Use-Specific Standards), Article 30-5.A (Parking & Loading), and Article 30-2 (Administration) to establish and regulate “Data Center” uses.Title
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COUNCIL DISTRICT(S):
Council District(s)
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b
Relationship To Strategic Plan:
The proposed Data Center text amendments advance multiple FY2025 Strategic Plan goals by clarifying permitted locations, adding use-specific performance standards, and formalizing early utility coordination - supporting growth while protecting neighborhoods.
Goal II - Diverse & Viable Economy. By defining “Data Center,” calibrating district permissions, and providing a predictable review pathway, the amendments sustain a favorable development climate and help diversify the City’s tax base and employment opportunities (Objectives 2.1-2.4). Key partners explicitly include the Public Works Commission (PWC), aligning the new Utility Impact Statement and TRC routing with identified stakeholders. Related performance measures include an increase in tax base, jobs created, vacancy rates, and corridor appearance and business quality.
Goal III - City Investment Planning. The amendments manage future growth and strategic land use by giving data centers a clear use classification and by requiring a Utility Impact Statement to coordinate infrastructure with PWC. They also reinforce timely, accurate plan review and inspection services through established TRC procedures, and tie into “smart city” capacity by emphasizing predictable infrastructure planning. Related performance measures include preparedness to manage development and growth, on-time construction plan reviews and inspections, and technology KPIs.
Goal V - Financially Sound City. Clear standards and procedures reduce uncertainty, support efficient, data-driven administration, and align resources with priorities (Objectives 5.1-5.2). Related performance measures include fund balance, bond rating, and overall service quality - outcomes aided by predictable review processes and coordinated capital/service planning for high-demand users.
Goal VI - Collaborative Government. The amendments enhance transparency and customer service by establishing public-facing definitions, clear standards for equipment placement/buffering, and formal coordination with business and utility partners (Objectives 6.1-6.3). Related performance measures include satisfaction with public involvement and communication effectiveness.
Overall, the package is consistent with - and measurable supports - Goals II, III, V, and VI of the FY2025 Strategic Plan by promoting a competitive, well-coordinated development environment, safeguarding service capacity, and strengthening transparent, collaborative governance.
Executive Summary:
The Planning Commission is asked to make a recommendation to City Council on a coordinated package of UDO text amendments that: (1) add definitions for “Data Center” and related terms; (2) place Data Centers in the Use Table with district permissions; (3) add use-specific standards addressing siting, buffering, equipment placement, noise/testing hours, lighting, traffic, and utility coordination; (4) right-size off-street parking and loading; and (5) require a Utility Impact Statement at site-plan stage with Technical Review Committee routing. Collectively, these updates create a clear regulatory home for high-intensity digital infrastructure while protecting nearby neighborhoods and aligning with existing UDO development standards.
Background:
The current UDO does not expressly identify “Data Center” as a principal use. In practice, applicants have been analogizing these proposals to warehousing or light industrial categories, which can lead to misclassification and the application of standards that are not well-suited to data center operations. Creating a distinct “Data Center” use in Table 30-4.A.2 resolves this ambiguity and enables performance standards tailored to the unique characteristics of the use.
Under North Carolina’s Chapter 160D framework, the City’s Planning Commission reviews and recommends amendments to development regulations, and the City Council takes final action following the required public notice and hearing. With any zoning text amendment, the Council must adopt a plan consistency statement at the time of its decision.
Administratively, site plans are routed through the Technical Review Committee in accordance with Article 30-2’s common procedures. Those procedures govern submittals, interdepartmental coordination, and staff report preparation, ensuring that data-center applications are reviewed consistently and comprehensively.
Issues/Analysis:
This section distills the technical research behind each proposed amendment and explains why the standards are calibrated for Fayetteville’s context under North Carolina law. For ease of review, each topic states (1) what the research shows, and (2) how the proposed UDO text addresses it.
1) Why add “Data Center” as a distinct principal use?
What research shows. Modern data centers are not warehouses: they carry outsized utility footprints (power, sometimes water), atypical trip patterns, and specialized equipment (UPS/BESS, large mechanical yards, arrays of standby generators). Global and U.S. evidence shows rapid growth in data center energy demand - driven by AI - that is materially different from light industrial or office uses. The IEA projects global data-center electricity consumption will roughly double by 2030 to ~945 TWh, with growth of ~15%/year through 2030 - over 4x faster than other sectors. U.S. grid forecasts similarly tie record-high load growth in 2025-2026 to data centers and AI.
UDO response. Create a named “Data Center” use, add tailored performance standards, and place it explicitly in the Use Table (Article 30-4.A.2). This removes ambiguity and avoids trying to “fit” data centers into warehouse/office categories that lack appropriate mitigations.
2) Siting strategy - where should Data Centers be allowed?
What research shows. Hyperscale facilities can require 50-100+ MW per building and 300 MW or more per campus; utilities are now receiving individual 60-90 MW connection requests, with large campuses planned around multiple 300-MW substations. These loads affect interconnection timelines, substation siting, and neighborhood compatibility if placed near sensitive edges.
UDO response. Permitted by right in employment/industrial districts (BP-4/LI/HI), allowed with Special Use Permit in “edge” districts (OI/CC/DT-2/UC), and prohibited in neighborhood-scale districts. This maintains investor clarity in industrial areas but adds discretionary tools near mixed-use or residential contexts.
3) Utility coordination & the “Utility Impact Statement (Data Center)”
What research shows. Multiple authorities (IEA, EIA/Reuters) anticipate significant near-term load growth tied to data centers, which can outpace local infrastructure if not coordinated early. Fayetteville PWC is the local electric, water, and sewer provider with adopted “Service Regulations and Charges” and delegated local permitting for water/sewer extensions; early coordination is essential for capacity planning, main extensions, and flow-acceptance letters.
UDO response. Require a Utility Impact Statement at the site-plan stage (Article 30-2): peak electric demand (MVA/MW), cooling approach, projected water/wastewater flows, generator inventory/fuel storage, and written coordination with PWC - routed through the TRC. This formalizes information that the City and PWC need to plan upgrades and service commitments.
4) Water and wastewater - cooling method matters
What research shows. Water demand varies by cooling approach. Evaporative/cooling-tower systems can significantly increase on-site water consumption; national and regional assessments report steep growth in data-center water use, with Northern Virginia’s centers using ~2 billion gallons in 2023 (up 63% since 2019). Federal FEMP guidance flags cooling towers as a prime target for water-efficiency measures; NPDES General Permit NCG500000 governs certain non-contact discharges (e.g., cooling-tower blowdown), and pretreatment rules apply if blowdown is routed to sewer.
UDO response. The Utility Impact Statement must identify cooling type, projected water use, and blowdown disposition - and document PWC coordination. This ensures City/PWC can require applicable permits (e.g., NPDES coverage for blowdown to waters or local industrial user permits for discharge to sewer) and evaluate drought-response compatibility under PWC’s service regulations.
5) Backup power - air permits, testing hours, and noise
What research shows. Standby generator banks are standard for mission-critical uptime. Under federal air rules (RICE NESHAP/NSPS), “emergency” engines are restricted, and testing/maintenance is capped and regulated; NFPA 110 recommends monthly generator exercising for 30 minutes. Routine tests and cooling equipment are the primary sources of exterior noise; many localities, therefore, limit testing to business hours to reduce nuisance. North Carolina recognizes municipal authority to regulate noise (G.S. 160A-184), and Fayetteville enforces local noise limits by ordinance.
UDO response. (a) Require compliance with applicable state/federal air rules; (b) require equipment placement to the side/rear with full screening; (c) limit routine generator testing to weekdays 9 a.m. - 5 p.m., excluding City-observed holidays; (d) add residential edge protections (see §7 below). These tools complement - not replace - City noise enforcement.
6) Fuel storage and spill prevention
What research shows. Above-ground diesel storage supporting generator banks can trigger the federal SPCC rule if aggregate above-ground oil storage exceeds 1,320 gallons, requiring a spill prevention plan and secondary containment.
UDO response. Require the Utility Impact Statement to disclose on-site fuel types/volumes and commit to compliance with SPCC (if applicable). The screening/placement standard also keeps fuel tanks out of street yards and away from sensitive edges.
7) Residential edge protections - setbacks and buffers for equipment yards
What research shows. Peer high-growth jurisdictions have adopted enhanced edge standards for data centers due to generator arrays, cooling-tower acoustics (including low-frequency components), and visual massing. Loudoun County, VA, for example, requires increased setbacks from residential property lines for data centers and has considered setbacks on the order of 200 feet. Technical guidance also notes that low-frequency tonal noise from large fans can propagate farther than dBA-weighted readings imply.
UDO response. When abutting a residential base district, require: (1) a minimum 150-foot setback for generators/mechanical yards from the shared lot line, and (2) at least a Type D buffer (evergreen opacity), with authority to require enhancements for Hyperscale sites based on evidence in the record. This blends best-practice setbacks with Fayetteville’s existing buffering framework.
8) Lighting - security needs without glare or spill
What research shows. Data centers typically operate 24/7 with perimeter/security lighting. Dark-sky best practices recommend fully-shielded (full-cutoff) luminaires to reduce glare and light trespass. Fayetteville can rely on its existing lighting standards and supplement them with clear expectations about cutoff fixtures and trespass limits.
UDO response. Expressly tie data centers to Article 30-5.E lighting standards and note full-cut-off fixture expectations. This protects night skies and nearby residences while maintaining security lighting.
9) Traffic, site access, and right-sized parking/loading
What research shows. Operating data centers have low daily trip rates and employment densities relative to their floor area, with occasional peaks (shift changes, deliveries). A recent TIA for a 7.84 million-sq.-ft. campus in Stafford County projected ~5,882 daily trips (≈0.75 trips/1,000 sf) and 236 vph in the PM peak - orders of magnitude lower than warehousing. Many jurisdictions key TIA’s to simple thresholds (≥100 peak-hour trips or similar).
UDO response. (a) Keep Fayetteville’s existing TIA triggers but affirm their applicability to data centers (Article 30-5.M); (b) adopt parking ratios tied to accessory office/support area plus peak-shift staffing (rather than total GFA), and (c) require at least one large loading space per principal building with increments by size. This avoids over-parking and ensures adequate service bays and internal queuing.
10) Battery energy storage systems (BESS) and UPS safety
What research shows. Many data centers deploy lithium-ion UPS/BESS for ride-through and resilience. The 2021/2024 International Fire Code (IFC) and NFPA 855 govern ESS, including listing (UL 9540), large-scale fire testing (UL 9540A), separation distances, ventilation, and detection. Codes have been tightened in recent cycles in response to documented ESS hazards and thermal-runaway risks.
UDO response. While the Fire Marshal administers fire code compliance, the Utility Impact Statement must disclose any planned ESS (chemistry, MWh, location) so TRC can route for early fire review, conditions, and building permit coordination.
11) “Hyperscale” intensity flag - why 50 MW?
What research shows. Industry and public-sector analyses commonly describe “hyperscale” facilities in the 50-100+ MW range per building, with multi-building campuses reaching several hundred MW to multi-GW. This threshold is used here only as a planning “intensity flag” to trigger discretion for enhanced buffers/queuing - not to regulate utility service.
UDO response. Define “Data Center, Hyperscale” as ≥50 MW aggregate critical IT load and authorize additional buffering/queuing where the record shows a need (Article 30-4.C).
12) Air quality & hours-of-operation guardrails during testing
What research shows. Federal rules for stationary engines limit non-emergency operation and define “emergency” status; NFPA 110 calls for monthly testing that, if unscheduled, can generate community complaints. Many jurisdictions therefore restrict routine testing to daytime business hours to reduce noise conflicts with residential uses and schools.
UDO response. Limit routine testing to weekdays 9 a.m. - 5 p.m., require compliance with Chapter 17 noise limits, and rely on Special Use Permit conditions for site-specific refinements.
13) Economic and infrastructure context (informing siting and coordination)
What research shows. Rapid AI-related buildout is straining electric systems nationally, with utilities and regulators citing major investments in generation and transmission tied to data-center growth. Clean-energy additions are accelerating, but grid capacity and interconnection queues are binding constraints; tech firms are contracting for 24/7 power (including nuclear/renewables + storage). This underscores the importance of early, formal utility coordination at the local level.
UDO response. The new submittal (Utility Impact Statement) and TRC routing ensure that projects' surface grid/water needs are addressed early, aligning site phasing with PWC or other provider capacity and regional projects.
How the evidence maps to the draft text (quick crosswalk)
• Add Definitions (30-9.D): Clarifies scope and submittal expectations for complex projects (e.g., “Data Hall,” “Emergency Backup Generator,” “Utility Impact Statement”). Evidence: distinct operating profile and utility intensity versus warehouse/office.
• Use Table placement (30-4.A.2): By-right in industrial districts; SUP near mixed-use edges; prohibition in neighborhood-scale districts. Evidence: hyperscale loads and edge impacts support discretionary review where conflicts are likeliest.
• Use-Specific Standards (30-4.C):
o Residential edge protections (setbacks/buffers, equipment to side/rear): mirrors peer practice in high-growth data-center markets and addresses low-frequency fan/generator noise.
o Testing hours & noise: aligns with NFPA 110 monthly test frequency while minimizing off-hours nuisance under local noise authority.
o Air quality compliance (RICE/NSPS) and fuel SPCC: recognizes federal/state regimes triggered by diesel banks and oil storage.
o Lighting: full-cutoff fixtures reduce glare/trespass consistent with best-practice guidance.
o Traffic/TIA: retains Fayetteville thresholds but confirms applicability to data centers; empirical TIAs show low daily and peak trips per square foot.
o Utility Impact Statement routed to TRC and PWC or other utility (30-2): responds to documented grid and water planning challenges, referencing PWC permitting/coordination role.
• Parking & Loading (30-5.A): Right-sizes parking to employees/office areas and requires loading bays - reflecting low trips but steady deliveries/service needs. Evidence: TIA data and industry operations.
Bottom Line
The amendments are narrowly tailored to the documented operating profile of data centers: high utility intensity with comparatively low trip generation; periodic but controllable noise from testing; potential water and blowdown management; and specialized fire-life-safety needs where BESS is used. By pairing by-right permissions in industrial areas with targeted use-specific standards, enhanced edge protections, and a Utility Impact Statement routed through TRC and PWC, the City provides a predictable path for investment while protecting nearby neighborhoods and public infrastructure capacity.
Budget Impact:
Adoption of the text amendments themselves does not obligate City funds for capital construction and has no immediate, material impact on the General Fund. The near-term effects are administrative and can be absorbed within existing Planning, Inspections, Fire, Engineering/Traffic, and Stormwater workloads. Staff time will be required to update internal checklists, the permit portal, and TRC routing sheets to incorporate the new “Data Center” use and the Utility Impact Statement (UIS). Limited one-time costs may include ordinance codification, staff training on the new use-specific standards, and preparation of public-facing guidance; these are expected to be minor and handled within current operating budgets.
Over the medium term, the amendments are expected to clarify submittal requirements and reduce rework, which lowers case-processing risk and staff hours per application. To the extent that the City receives data center proposals, standard development review and entitlement fees (e.g., special use, site plan, building/electrical/mechanical permits) would offset review and inspection costs on a cost-recovery basis. If desired, Council may later consider a nominal fee-schedule adjustment tied to UIS review (e.g., bundling into major site plan/TRC fees) so that projects with unusually intensive utility review bear the corresponding administrative cost. No fee changes are proposed or required to adopt these amendments.
The amendments do not commit the City to any capital projects; rather, they help avoid unplanned fiscal exposure by formalizing early coordination with PWC on electric, water, and wastewater capacity. Any off-site transportation or frontage improvements warranted by a project Traffic Impact Analysis would be addressed through existing UDO and NCDOT processes and are typically developer-constructed (or proportionally funded) with dedication to the City, where applicable. Similar principles apply to stormwater: site-level compliance, inspections, and as-built acceptance occur under current ordinances, with review/inspection funded by existing fees. In operation, data centers are large impervious users and would pay stormwater user fees, providing ongoing revenue to the Stormwater Enterprise Fund commensurate with their footprint.
City utility infrastructure is provided by the Public Works Commission (PWC) as an enterprise function. The UIS requirement - documenting anticipated electric load, water consumption, wastewater flows, generator inventories, and any energy storage systems - positions PWC to plan line extensions, substations, and plant capacity in a fiscally responsible manner using existing policies (e.g., system development fees, developer contributions, and capital programming). Any PWC capital outlays would be evaluated through PWC’s budget and CIP processes, not the City’s General Fund, and may be offset by customer revenues and established cost-sharing agreements. Early disclosures through the UIS reduce the risk of stranded or prematurely sized infrastructure and help align private construction phasing with public utility readiness.
Enforcement costs are expected to be manageable. The amendments leverage existing City tools - noise ordinance enforcement, lighting standards, landscaping/buffer requirements, and TRC conditioning - so no new enforcement program is created. Limiting routine generator testing to weekday business hours should reduce after-hours complaints and the associated calls-for-service burden on Code Enforcement or Police. Fire prevention review for battery energy storage systems (where proposed) will occur within the current plan review/inspection authority; any specialized training can be scheduled within existing professional development lines or through permit-funded training allocations.
From a revenue standpoint, if data center projects are permitted and constructed, the City may realize incremental property-tax growth from real property improvements and eligible business personal property (servers and equipment are generally taxable in North Carolina and depreciate over time). The magnitude and timing of such revenues are project-specific and cannot be estimated at the ordinance stage. The amendments aim to create a predictable regulatory path in appropriate districts, which can support private investment and broaden the non-residential tax base over time without committing to City incentives or appropriations.
In sum, the budget impacts of adopting the amendments are minimal and primarily administrative in the short term, with potential long-run fiscal benefits tied to a diversified tax base and enterprise-fund revenues if projects materialize. The UIS/TRC framework reduces fiscal risk by ensuring capacity questions are addressed early, improvements are right-sized, and any developer responsibilities are established through existing, legally defensible processes.
Options:
After staff review, the Planning Commission conducts a legislative hearing with notice provided per Section 30-2.B.12 and procedures in Section 30-2.B.13. Upon closing the hearing, the Commission must consider the application, staff report, any HRC recommendation, and public comment, and then - by a majority of the quorum present - adopt a written recommendation selecting one of the following actions, based on the Text Amendment Standards in Section 30-2.C.2.e:
1. Recommend Adoption of the Amendment as Written: Choose this when the draft text meets the standards in 30-2.C.2.e without modification. The written recommendation should briefly cite the standards relied upon and the evidence in the record (e.g., compatibility with the UDO framework, protection of public health/safety/welfare, and alignment with adopted plans). Sample motion language: ”Move to recommend adoption of TA25-05 as written, based on the standards in Section 30-2.C.2.e and the findings in the staff report and public hearing record.”
2. Recommend Adoption of a Revised Amendment: Choose this when the Commission supports the amendment in principle but finds that specific changes are needed to satisfy 30-2.C.2.e (e.g., adjust district permission, refine buffers/setbacks, clarify definitions, or revise a submittal requirement). The written recommendation must identify the exact revisions so Council has clear legislative text to act upon. Sample motion language: “Move to recommend adoption with revisions of TA25-05, based on the standards in Section 30-2.C.2.e, with the following changes: [list precise edits by Article/Section/Table/line].”
3. Recommend Denial of the Amendment: Choose this when the proposed text, even with feasible revisions, does not meet the standards in 30-2.C.2.e. The written recommendation should specify the standards not met and the reasons grounded in the record (e.g., internal inconsistency with the UDO, adverse impacts insufficiently mitigated, misalignment with adopted plans). Sample motion language: “Move to recommend denial of TA25-05 based on the standards in Section 30-2.C.2.e, specifically [identify the unmet standards and summarize supporting reasons].
Notes on Procedure and Documentation
• The Commission’s action is advisory; the City Council renders the final legislative decision after its own hearing and will adopt the final plan consistency statement at that time.
• If the HRC provided a recommendation (where applicable), the Commission’s written recommendation should acknowledge how that input was considered.
• For Options (1) and (2), staff will prepare the clean ordinance text - and, if needed, a redline reflecting any Commission-recommended revisions - for Council’s agenda packet.
Recommended Action::Recommended Action
Having completed a comprehensive review of the operational, infrastructure, and land-use research on data centers - and vetted the accompanying ordinance language - professional staff strongly recommends approval of the text amendment package as written.
Recommended motion:
“Move that the Planning Commission recommend approval of TA25-05 (Data Centers) as written, and adopt the written Consistency Statement included in the staff report, finding that the amendments meet the Text Amendment Standards in Section 30-2.C.2.e, are consistent with the City’s adopted plans (including FY25 Strategic Plan Goals II, III, V, and VI), and are reasonable and in the public interest because they (1) establish a clear use classification and predictable review pathway; (2) apply targeted, enforceable performance standards (buffering, equipment placement, noise/testing hours, lighting, and traffic); and (3) formalize early utility coordination through the TRC and PWC to safeguard public infrastructure capacity and neighborhood compatibility.”
Suppose the Commission desires minor edits while maintaining substantive support. In that case, staff further recommends a motion to recommend adoption with revisions and to identify the precise edits by Article/Section for City Council Consideration.
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Attachments:
1. Draft Ordinances
2. Consistency and Reasonableness Statements