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Hayward Council Reviews Business‑Friendly Code Rewrites; Debate Focuses on Data Centers, ACUs and Massage Moratorium
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Summary
Staff presented draft municipal code rewrites to consolidate commercial zoning, create accessory commercial units (ACUs), limited entertainment and temporary use permits, and require conditional use permits for data centers. Public commenters and council members debated whether data centers should be allowed in IP zones, performance standards and community benefits; the council also extended a temporary moratorium on new massage businesses.
City planners presented a package of draft municipal code changes aimed at simplifying commercial zoning and reducing permitting friction for small businesses at a Jan. 27 work session.
Sachiko (Sachi) Riddle, assistant planner, and Elizabeth Blanton, senior planner, described consolidating eight commercial code sections into one, reducing permitting requirements for many uses, proposing a new accessory commercial unit (ACU) pilot in downtown and Mission Boulevard corridors, outlining a limited entertainment permit, and establishing a streamlined temporary use permit for pop‑ups and short events.
Staff recommended two uses be more strictly regulated: massage establishments (after a temporary moratorium prompted by enforcement concerns) and data centers. For data centers, staff proposed requiring a conditional use permit and limiting locations to the general industrial (IG) district so such projects would come before the planning commission for public hearing.
The proposal drew both support and pushback during public comment. Philip Seidels of Prologis urged not to ban data centers from IP zoning and recommended objective performance standards instead of categorical exclusions. "We support the business friendly Hayward initiative, particularly its focus on strengthening the city's fiscal health and attracting new businesses," Seidels said, and asked staff to consider allowing data centers in both IP and IG with performance standards.
Representatives of Honor the Earth and other community groups voiced concerns about water use, diesel generator yards and health impacts near data centers; a speaker from Honor the Earth said, "Data centers, although they sound promising, the technology to keep this going hasn't actually been invented," and urged the council to consider broader resource impacts.
Several council members endorsed code simplification and the temporary moratorium on new massage businesses, while also expressing caution about data centers — citing the need for recycled water, limits on diesel generator emissions, clearer definitions tied to electrical load, and stronger community benefits packages if such projects proceed. Some council members asked that major data‑center CUPs be considered by the full council rather than only by the planning commission.
Staff said recycled water connections are limited by existing infrastructure and that some recent Hayward data centers could not access purple‑pipe recycled water because infrastructure did not extend to their sites. Staff and council agreed to refine definitions, consider performance standards, and return with clarified zoning/permit language.
