Memphis City Council members said a proposed data center moratorium before them now is not “anti-business” but a way for the city to regulate expansions on their own terms.
The consideration for a moratorium is a first for Memphis, hit largely by surprise nearly two years ago by the news that Elon Musk’s then-called xAI would begin operations in the former Electrolux facility in South Memphis. That move brought a seeming never-ending battle of controversies over air pollution, noise, and water consumption. The company, now a public company called SpaceXAI, operates three data centers in the Memphis area.
The move comes also as cities and counties across Tennessee and the country begin to implement similar moratoria on data centers. Government bodies for Davidson and Knox Counties in Tennessee have put a pause on these in place as have a number of smaller communities.
The Memphis City Council moratorium idea surfaced in an agenda posted late last week. It is sponsored by council chair Jana Swearengen-Washington, Yolanda Cooper-Sutton, Jerri Green, and former council chair JB Smiley, Jr.
Data centers are defined as the following under the ordinance:
“Any building, structure, campus, or facility primarily designed for housing, operating, or maintaining computer servers, data storage equipment, networking equipment, telecommunications infrastructure, or other electronic systems used for processing, transmitting,or storing digital information, together with all associated cooling systems, backup generators, substations, battery storage, mechanical equipment, and supporting infrastructure.”
Swearengen-Washington said the ordinance is not a “ban” but a pause. She called for community benefit arrangements, training pipelines, and hiring commitments.
“A moratorium does not reject economic developments, but it does give us time and a voice,” Swearengen-Washington said.
Smiley said both community residents and the council were left out of previous conversations regarding data center expansions in the community.
“I think the council deserves to be treated with respect by the folks who are pushing the data centers in our community,” Smiley said. “We can’t say we represent people if we’re not doing our job as the representatives of a group of people.”
He said the city does not have regulations for data centers in terms of proximity to schools and neighborhoods, noise, community investment, and more.
Councilwoman Janika White wanted to know if the moratorium could open up the council and the city to potential litigation and other “potential collateral consequences of a moratorium.”
The ordinance was approved out of committee for a full vote by the city council during its regular meeting Tuesday afternoon.
Environmental advocacy group Protect Our Aquifer (POA) welcomed a proposed pause on data center construction in Memphis. Though they said this decision would not “close or reverse” existing facilities, the moratorium would give the city the opportunity to put protections in place for community members.
“A pause is not a verdict on this industry,” POA said. “It is 12 months to write the rules that should have existed for over two years.”
The group urged the council to adopt minimum standards defining water source usage, air pollution, public notice, and community benefits. They also wanted the council to designate voting seats for residents directly impacted by data centers alongside experts from different industries.
POA also asked for SpacexAI to give a detailed schedule and completion date for the Colossus Water Recycling Facility.
However, the Greater Memphis Chamber asked the council to vote “no” on the ordinance. The chamber, who was integral in bringing SpacexAI to the city, said it would make the city less competitive in the industry.
The group said that several communities oppose data centers because “they lack the power, infrastructure, water capacity, or logistical footprint to support them,” which it said Memphis “has all three.”
“A moratorium surrenders that [competitive] leverage at precisely the moment when Memphis’ competitive position has never been stronger,” the organization said in a statement. “The Chamber urges the city council to vote no on the proposed moratorium and to keep Memphis open for business at a moment when our competitive advantage has never been greater.”
The nonprofit affirmed their commitment to making sure any additional data centers invest sustainably in the community.
Earlier Tuesday the Southern Alliance for Clean Energy (SACE) called for an 18-month moratorium on data centers in Tennessee, North Carolina, South Carolina, Georgia, and Florida so the states can “proactively set the terms of the buildout instead of inheriting costly risks.” SACE said a moratorium should focus on community, state, and regional costs, economic sector risks, and how AI companies deal with their projects.
