Sandpoint commissioners reject staff'draft ban on standalone data centers, send issue back to council

The Sandpoint Planning & Zoning Commission on Aug. 18 voted to deny staff's draft ordinance that would have banned standalone data centers in the city and allowed up to 5,000 square feet of server space only as part of other buildings.

City planner Bill Dean told the commission the ordinance had three parts: add a broad definition for "data center," outlaw the standalone use in the city's industrial zone districts, and allow data-center functions when they occupy no more than 5,000 square feet within another building. "That was the assignment: ban data centers," Dean said, adding the 5,000-square-foot figure was chosen because similar numeric thresholds already appear elsewhere in the code.

The commission's deliberations focused on whether the draft was too broad, whether the city can regulate energy or water consumption through zoning, and whether the 5,000-square-foot carve-out was defensible. Commissioners repeatedly said they had not seen evidence tying a specific square-foot threshold to the environmental harms the council cited. One commissioner summarized the concern: "I don't think I can explain my reasoning to someone" for selecting an arbitrary cutoff without data.

Members of the public urged the commission to consider local small-scale operators and privacy-preserving community infrastructure. "That regulatory uncertainty just makes businesses that would otherwise come to Sandpoint . . . go, 'Yeah, I'm going to do something else,'" resident Stuart Kristoff said during public comment. Freelance engineers urged the commission to preserve options for small local operators and micro data centers that could support local privacy and business needs.

Staff noted that Sandpoint lacks the large vacant parcels that typically host hyperscale facilities and that many of the giant data centers locating in Idaho have benefited from state incentives. After discussion a commissioner moved to deny the staff recommendation; on roll-call the motion passed, with the commission citing the draft's broad definition, potential unintended consequences, and the absence of quantified findings about consumption and community impact. The commission recommended council consider a more narrowly tailored approach or a menu of regulatory options rather than a blanket ban.

The matter will return to City Council for further direction; the commission's action was a rejection of the current draft rather than adoption of alternate code language.