Committee approves ordinance language to permit data centers in industrial zones with water/electric feasibility checks

On Nov. 27 the Legal & Finance Committee advanced Ordinance 66 44, which amends Title 17 to add a definition for 'data center' and to permit data centers in light industrial and heavy industrial zoning districts with conditions. Ms. Fisher said the change responds to interest from a potential data center developer and was developed in coordination with Elevate and industry examples.

The ordinance treats data centers as an industrial use that requires high-capacity water and electrical services for cooling systems. Staff said that the ordinance would allow the use as permitted, but would require submission of a feasibility study at building-permit review demonstrating that water and electrical demand can be met. Building permits would not be issued until that feasibility analysis confirms capacity; if demand cannot be met, applicants may seek a zoning-board variance under strict criteria. Ms. Fisher said Black & Veatch is conducting a feasibility study for the location where a developer has expressed interest, and staff would validate demand with utility providers and water agencies before permit approval.

Committee members emphasized economic benefits — including potential tax base increases — and regional advantages of Rapid City's location. Ms. Fisher cautioned that if multiple data centers request permits and cumulative water demand threatens supply, staff would return to council to request a moratorium to enable a regional analysis rather than approve permits without adequate resources.

The committee voted to advance the ordinance with the stated feasibility requirements; staff will verify studies and utility coordination before issuing any building permits.