MURRAY – The City of Murray has not received any proposals for a data center, but local officials are moving to regulate them before one arrives.
At a special called meeting last week, the Murray Planning Commission voted to advance a draft ordinance that would create local rules for data centers. Roughly 30 people, excluding city employees and officials, attended the meeting.
The commission has called another special meeting for Tuesday, June 9, to hold a public hearing on the proposed amendments.
Carol Downey, Murray’s director of planning, said the ordinance is intended to put “guardrails” in place because data centers are not currently regulated under Murray’s zoning code.
“The development of data centers is growing as technology advances,” Downey said of the facilities designed to house the specialized computing hardware necessary to support cloud computing, artificial intelligence and commercial cryptocurrency mining.
“The trend necessitates strategic long-term planning on behalf of the city to ensure we protect and maintain the integrity of our vibrant community while recognizing and preparing for future economic trends,” she added.
Downey identified industrial zones as the most appropriate location for future data centers because of potential impacts related to battery storage, backup generators and mechanical noise. Currently, the city’s industrial zones are located on Industrial Road, Spruce Street, on Fourth Street north of Chestnut Street, Robert Young Boulevard and Max Hurt Drive.
The proposed amendments would allow data centers only in industrial zones and require a minimum 1,500-foot setback from residential, commercial and agricultural districts, as well as from any sensitive use properties, including residential dwellings, schools, daycares, nursing homes, parks, community centers, places of worship, hospitals and agricultural operations.
The draft also includes design standards for lighting, fencing, screening, landscaping and noise, along with requirements related to utilities, generators and cooling systems. Companies would have to receive approval from water, gas, electric and wastewater providers before construction.
The proposal would also require a decommissioning plan before construction begins, including third-party financial assurance in case the company defaults on the plan.
With no state or federal regulations specifically governing local data center impacts, the Kentucky Resources Council has released model ordinances that local governments can tailor to fit their communities’ needs.
“This is pretty good model language that’s being used throughout the state. It’s been tailored for Murray, but (it’s a) pretty solid document,” said David Perlow, who serves as the commission’s legal counsel. “Anytime you try to regulate commerce or businesses, you’ve got to be careful. So, this has been pretty well vetted and pretty much run through other communities. We can make little, little changes, but I worry about taking too big of a swing.”
The proposed text amendments make two changes to the city zoning code, namely adding a new subsection to Chapter 156.059 regarding data centers and amending the definitions in Chapter 156.040. During the nonpublic hearing last week, commissioners went line-by-line through the proposed amendments, asking questions and suggesting changes.
Commissioners made several smaller edits during the meeting, including discussing acceptable fencing materials, vegetative screening requirements and where to place language requiring an acoustical engineer to conduct noise assessments.
Commissioner Bobby Deitz drew attention to language concerning wetlands. As written, a data center could not be in or within 50 feet of the boundary of any wetland. Deitz noted there is a difference between isolated wetlands and jurisdictional wetlands, which are connected to a jurisdictional stream.
“This is saying that you can't go in any wetland whether it's jurisdictional or not,” Deitz said. “I don’t know if our attempt here is to make it more restrictive or less restrictive. The way it is now, it’s more restrictive.”
Commissioner Paula Hulick said that she preferred the more restrictive language but acknowledged that her lack of expertise on the topic gave her pause. Commissioner David Roberts echoed similar sentiments. Ultimately, commissioners decided to keep it as written.
The longest discussion centered on addressing concerns about property values if a data center is ever proposed.
“I think it would help us wrestle with the questions that we’re probably going to get, if we ever do (have a data center proposal) – which we don’t at this point, but if we did – I suspect we’ll get a fair amount of comments that property values will go down,” Planning Commission Chair John Krieb said. “So, it may help us (respond to) concerns.”
It was suggested that a percentage of loss in property value be set in the ordinance, but Perlow advised against it. He said that with a defined number, an appraiser could conceivably set the value 1% above that threshold, adding, “Now, your hands are tied.”
“I think the whole point is that you’re making (the company) go get an appraisal,” Perlow said. “Because everybody says, ‘Well, my property value’s dropping,’ but there’s no evidence in the record. You’re forcing them to go get those numbers, put it in the record so that you have evidence to make a decision if somebody were to ever want to bring a data center here. … What if 1% is enough? And somebody losing 1% of their (property) value may be enough in the future under that permit for you to deny it and then that (clause) would give you coverage.”
“I feel like it’s going to put us in a pickle if the property values go down and we make a decision to approve it – and we’ve got a roomful of people like this – is that just the cost of progress? I don’t know,” Deitz said and later asked, “As a homeowner, if one was going in next to me and it lowered my property values – 1%, 10%, it doesn’t matter – I just lost value by what this board decided. … Are we allowed to say no if the values go down of surrounding properties, and can we use that as a reason why we say no and don’t allow it?”
Perlow explained that the commission would have to be fair to both parties, meaning the homeowners or residents and the data center, and warned that favoring either side could make the city vulnerable to legal challenges. He said the draft language gives the commission flexibility to consider impacts to property value without creating an automatic approval or denial standard.
Before the commissioners voted, Perlow asked Downey to explain to the audience how a zoning text amendment moves through the Planning Commission and City Council.
Read more about how the ordinance process works
Downey said the Planning Commission must hold two meetings before proposed text amendments can be sent to the Murray City Council. The first includes a nonpublic hearing, where commissioners suggest changes or edits to the proposed ordinance.
“This is the first step in regulating the data centers for our community,” she said.
The second meeting includes a public hearing, giving residents an opportunity to comment on the proposed amendments. If the commission advances the amendments after the public hearing, they would go to the Murray City Council for consideration.
The council must approve two readings before the ordinance can take effect. After final passage, the ordinance must be published in the paper of record and becomes final 10 days after publication.
If the commission advances the proposal Tuesday, the council could hold its first reading as early as Thursday, which is the council’s next regular meeting. A second reading could take place at the council’s July 9 regular meeting, meaning the ordinance could be finalized by the end of July.
The council also could call a special meeting to consider the issue sooner.
Krieb also asked Perlow to clarify what Tuesday’s public hearing would cover. “The public hearing is not whether or not we’re having a data center at all; it’s on the details of the ordinance that we’re proposing, correct?”
“Yes,” Perlow answered. “Just so everyone understands, this is a 20-page proposed ordinance to regulate data centers, and what they’ve been talking about is fine-tuning the language of the proposed regulation. So, if some of you are very ‘pro’ data center, then you can come here and speak in opposition, that you don’t want any regulation. If some people want some regulations and you have suggestions about alterations to these (proposed amendments), then that would be a perfect time to give your input.”
Upon a motion from Hulick, seconded by Commissioner Cami Duffy, the commission voted unanimously to advance the revised draft to Tuesday’s public hearing.
Following the vote, Krieb asked Downey if the public would have access to the proposed amendments before the public hearing. Downey said that is not typical but deferred to Perlow and the commissioners, noting her only reservation about releasing the draft was that it remains a fluid document until the commission approves it.
“I guess my thought was wanting to take input – pro, con – on the ordinance, which is the purpose,” Krieb said. “Since we don’t have an application that we’re discussing, it’s just focused on the ordinance, we need to have (the public) have a chance to see what the ordinance proposal is.”
Downey said she did not mind providing it but reiterated that it is an evolving document. “I just want that understood that someone might get a copy and there may be a change prior to the public hearing.”
The draft ordinance amendments can be viewed or downloaded below.
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