$10B Desert Data Center Dispute Could Alter Zoning Requirements Statewide

The Imperial County Planning Commission is set to vote Dec. 18 on a lot merger for a proposed 950,000-square-foot data center campus that has become a flashpoint in California’s debate over how—and where—hyperscale digital infrastructure is approved. The project faces a trifecta of opposition: State Senator Steve Padilla plans to introduce legislation imposing energy- and resource-efficiency standards on data centers; the City of Imperial has filed a lawsuit seeking to block the project; and the City of El Centro has publicly rejected claims that it approved the use of reclaimed water for cooling. Complicating matters further, the Imperial County Board of Supervisors recently introduced a temporary cap and moratorium limiting the conversion of agricultural land for solar and battery energy projects—restrictions that could affect the proposed 862-megawatt-hour battery energy storage system (BESS) at the site.

County staff and the developer, Imperial Valley Computer Manufacturing LLC, argue the project is permitted by right under existing industrial zoning. That classification allows ministerial approval and exempts the project from discretionary review under the California Environmental Quality Act (CEQA), enabling five parcels to be consolidated into a single 75.39-acre site at the southeast corner of Aten and Clark Roads without a full environmental assessment.

The facility is designed to support a 330-megawatt load with a mix of imported electricity and on-site infrastructure, including a new substation, 220 Tesla Megapacks, and 132 natural gas generators. Critics argue that projects of this scale strain existing industrial zoning and reveal gaps in regulations written long before AI-driven computing loads became common.

Developer Sebastian Rucci has defended the project, emphasizing its economic impact and regulatory compliance. He notes that the $10 billion investment is projected to generate roughly $100 million in initial tax revenue for Imperial County. Rucci also points to the site’s long-standing industrial zoning and argues that the project meets all objective standards under existing codes, making ministerial approval not only appropriate but legally required. According to Rucci, opposition from municipalities and residents overlooks these factors, focusing instead on perceived risks rather than the financial and regulatory realities underpinning the development.

The lot merger would consolidate parcels zoned light industrial, medium industrial, and general agricultural. The plan calls for removing Leimgruber Road, dedicating right-of-way for Clark Road expansion, and building a Tier 4 hyperscale facility with 99.995% uptime. The City of Imperial contends portions of the site remain agricultural, where data centers and battery storage are not permitted by right and require conditional use permits, triggering CEQA review. The developer counters that industrial overlay zoning governs the site and that agricultural areas will host only ancillary uses such as water retention basins.

Utility capacity has emerged as another challenge. Imperial Irrigation District studies indicate the grid cannot reliably support the full load without major upgrades and imported power, warning of potential thermal violations and voltage instability at higher demand levels. Public opposition has intensified, with residents citing air quality, fire risk, and the proximity of generators to homes and schools, while municipal officials accuse the county of piecemealing approvals to minimize scrutiny.

The Imperial Valley case is being watched statewide. As data centers grow larger and more resource-intensive, political and civic pushback—including lawsuits, legislative action, and local moratoria—is increasingly likely to prompt other municipalities to require conditional use permits, extending approval timelines and reshaping the regulatory landscape for AI-driven infrastructure.