Loveland staff propose public hearings for larger data centers

Loveland staff proposed requiring data centers drawing more than 10 megawatts or using industrial cooling to go through a neighborhood meeting, a Planning Commission hearing and final City Council approval.

The city's presentation says the Unified Development Code allows all types of data centers by right in six zones, with no required public outreach or hearings. Proposed code changes would distinguish data centers and other facilities by size and type, limit large-load centers to specified industrial zones and require a conditional-use permit for a new industrial-use classification. Facilities under 10 megawatts without industrial cooling would remain permitted by right under the approach being considered, staff said.

Loveland's current codes lack data-center-specific definitions and regulations, according to the city's study session agenda. It says the city has no current data-center application and no applicable nondisclosure agreements. On Sept. 15, the council adopted a temporary suspension of accepting, processing and approving land-use applications for certain types of data centers. The suspension ends when comprehensive regulations are adopted or 12 months after it took effect, whichever comes first, unless the council ends it sooner.

The debate covered both by-right approval and whether Loveland should bar hyperscale facilities. “In other words, data centers must always require special user permits and public votes,” a resident representing the Coalition for Sensible Data Center Regulation in Loveland said. One council member wanted more information before ruling out a potentially beneficial colocation project; another favored banning hyperscale centers. A third opposed hyperscale centers and incentives and urged consideration of a voter-approved tax, fees and whether code could address colocation centers up to 25 megawatts.

The presentation proposes protections against the costs of large users, including take-or-pay contracts requiring facilities to pay for maximum capacity regardless of actual use. It also proposes upfront developer-funded infrastructure and financial protections if a facility closes. Possible community-benefit tools include a voter-approved excise tax, a separate rate class or resiliency surcharge for large-load users, and voluntary grants.

The city's utilities-focused data-center work session is scheduled for Dec. 8. Further policy refinement is planned for 2027. Staff said the council would have more chances to discuss the proposals after the utilities session and that public comment would continue at future meetings.