Gilroy planning commission backs ordinance to expand public notice for large projects after data‑center concerns

The Gilroy Planning Commission on July 16 voted unanimously to recommend the City Council adopt an amendment to Chapter 30 of the municipal code that would change how architectural and site review (ASR) permits are reviewed and expand public notification for larger projects.

Planning staff proposed two primary changes: require Planning Commission review for ASR permits when a project requires an environmental impact report (EIR) with significant and unavoidable impacts, and add an enhanced public outreach procedure for ASR permits that would require mailed notices, a community meeting and project web pages. Michael Fasadi, the city’s planning manager, told commissioners the amendment is intended to increase public engagement without changing development standards; staff recommended the commission find the amendment exempt from CEQA under the "common‑sense" exemption (CEQA Guidelines §15061(b)(3)).

The commission’s recommended edits — agreed to during deliberations — would: refer any project that requires an EIR to the Planning Commission rather than leave that review solely to staff; and require enhanced outreach for nonresidential/industrial ASR projects of 15,000 square feet or larger, including mailed notices to properties within 1,000 feet, newspaper notice and a minimum 14‑day advance community‑meeting notice. Commissioners also asked staff to include the city newsletter and other digital postings as part of outreach options.

Residents who spoke during public comment pressed for stronger limits and broader notice. Michelle Nelson said the city’s proposed reliance on online notices would miss many residents and criticized the appeal fee for ASR permits, which she said was “over $2,500,” as a deterrent to public participation. Armando Benavides urged the commission to ask the council to pursue objective development standards for large projects — including limits on building size, electricity and water use and operational features — rather than relying only on procedural changes. Mary Yates asked the commission to consider an interim moratorium on data‑center applications. Patrick McBride cited emergency‑response concerns and past lithium‑battery fires when urging broader notification beyond a 500‑foot radius.

Fasadi and other staff explained how the proposal interacts with the California Environmental Quality Act (CEQA). Staff said the city follows standard CEQA decision paths — initial study, negative declaration or mitigated negative declaration, and EIR — and that an EIR is required under the "fair argument" standard if substantial evidence suggests significant impacts despite mitigation. They emphasized that CEQA examines physical environmental effects (for example, water capacity, air quality, traffic/VMT), not municipal fiscal outcomes such as water‑rate changes.

Commission debate focused on two tensions: how to ensure meaningful community engagement without imposing undue cost or delay on homeowners or on projects where state law preempts local review; and how to set clear and legally defensible triggers for Planning Commission review. Several commissioners expressed concern that a broad outreach requirement could burden small residential projects, and asked staff to limit enhanced outreach to nonresidential/industrial development above the agreed threshold. Commissioners also discussed notice radius alternatives (500 feet by baseline code reference, with options raised of 1,000 feet or 1 mile) and settled on 1,000 feet for the recommended draft language.

By unanimous vote the commission first recommended the council find the zoning amendment exempt from CEQA under the common‑sense exemption, then voted to recommend adoption of Ordinance Z‑26‑01 with the commission’s amendments and accompanying direction that council consider drafting a separate, objective development‑standards ordinance addressing water, energy and energy‑storage systems.

The commission’s recommendation will go to City Council, which has the authority to adopt, modify or reject the ordinance. Staff said any changes that would alter CEQA thresholds or create new substantive development standards would require additional council direction and likely a separate ordinance process.

What’s next: the Planning Commission’s recommendations will be forwarded to the City Council for its review and possible action; staff will prepare ordinance revisions reflecting the commission’s suggested edits and the council may consider developing a separate ordinance to set objective standards for large industrial projects.