Aurora data center tax incentive capped at $83 million as council splits on moratorium

The Aurora City Council voted on Monday to reject a request to reconsider an indefinite moratorium on data center applications, a decision that split the board five to two. The vote means the city will continue accepting new proposals until specific regulations are finalized, a process that now includes a proposed 750-foot setback from residential areas.

The delay in pausing new applications follows a contentious period for the Trident data center project, which is planned for the Windler and Green Valley Ranch neighborhoods. Vantage Data Centers, the developer behind the facility, has requested a 90-day pause on new regulations to allow time to evaluate alternative locations near Xcel Energy infrastructure.

In a letter to the council, Matthew Clark, senior manager of public policy for Vantage, stated the company is evaluating sites further from residentially zoned parcels. The developer argued that immediate regulatory changes could hinder their efforts and lead to negative outcomes for both residents and the company. Mark Freeman, vice president for global marketing at Vantage, added that no decision has been made to relocate the project from its current, appropriately zoned site.

Mayor Mike Coffman said he plans to bring the reconsideration of the moratorium back to the council for a vote at the November 9 meeting. Since the board did not reach the seven votes required to reopen the debate on Monday, members did not discuss the specifics of the pause. The previous attempt to implement a six-month pause was rejected in August.

Despite the split on the moratorium, the council unanimously approved a zoning change that prohibits data centers from building in mixed-use office-industrial areas. This change does not impact the Trident project. Additionally, the council moved forward a proposal introduced by Councilmember Amy Wiles that would ban data centers within 750 feet of homes and require conditional use permits for sites between 750 feet and one-half mile away.

Under Wiles' proposal, data centers located more than one-half mile from residential areas would qualify for use by right, allowing them to proceed through administrative approval without a public hearing. The 750-foot distance represents an increase from the 350-foot buffer discussed in previous council sessions. City Attorney Pete Schulte confirmed that these new rules would not apply to existing applications, including Trident, which would be treated as an amended application rather than a new one.

City Manager Jason Batchelor noted that the new regulations would not affect several existing data centers, including those operated by JP Morgan Chase and QTS. Wiles stated that the earliest the residential buffer could be implemented is February, a timeline that follows Vantage's requested 90-day evaluation period. Councilmembers Francois Bergan and Curtis Gardner expressed concern that the new distance requirements were arbitrary and could create uncertainty for developers seeking to relocate.

Bergan argued that adding barriers during Vantage's search for a new site could force the company to build where it already has the right to do so. Gardner warned that disregarding the potential for litigation over regulatory uncertainty was a dereliction of duty. However, Mayor Coffman argued that without strong regulations, the city would face more projects like Trident in the future. He described the proposed rules as a necessary step to prevent similar situations from recurring.

The council also approved a proposal to prohibit future tax incentives for data centers. This measure ends the practice of remitting sales or use tax back to developers in exchange for job creation, though it does not apply to existing agreements. The city has already committed to four incentive agreements with a maximum total rebate of approximately $83 million. The Trident data center is included in this total, with a potential tax rebate of up to $39 million.

Dozens of residents from the Windler and Green Valley Ranch communities attended the Monday meeting to voice support for the moratorium. After the council voted against reopening the debate, attendees chanted shame. Gary Zimmerman, a local resident, told the council that the community needed the pause and that the board had failed them. The council will now focus on the Planning and Zoning Committee's review of the residential buffer proposal.