Agenda Date: 10/20/2026
Subject:
Title
Ordinance 22-2026: An ordinance on first reading establishing a Temporary Moratorium on the acceptance, processing, and approval of applications for Data Centers and directing staff to study and recommend land use regulations for data centers
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Reid Betzing, City Attorney |
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Presentations: |
N/A |
PURPOSE:
To request that City Council consider on first reading Ordinance 22-2026, which would establish a temporary moratorium on the acceptance, processing, and approval of land use and development applications for data centers within the City while staff study the impacts of these facilities and prepare recommended amendments to the Unified Land Use Code.
LONG-TERM OUTCOME(S) SERVED:
Robust and Resilient Economy
DISCUSSION:
The proposed ordinance would pause new data center development in Littleton for a limited period so the City can determine whether, where, and under what standards these facilities should be allowed. For purposes of the ordinance, a “data center” is a building or portion of a building whose primary use is to house servers, data storage, and related networking, power, and cooling equipment serving off-site users, including colocation facilities, cloud computing facilities, and cryptocurrency mining operations. Server rooms and IT equipment that are accessory to and primarily serve another use on the same property, such as an office building or hospital, are not data centers under the ordinance and are not affected.
During the moratorium, the City would not accept, process, or approve rezonings, site development plans, subdivisions, use approvals, building permits, or other development approvals for the establishment, construction, or expansion of a data center. The moratorium would not apply to applications the City determined to be complete before the ordinance was introduced on first reading, to projects with vested property rights under C.R.S. § 24-68-101 et seq., or to ordinary repair and maintenance of an existing data center that does not increase its floor area, electrical capacity, or water demand.
The moratorium would remain in effect for six (6) months or until City Council adopts amendments to the Unified Land Use Code regulating data centers, whichever occurs first, and Council may extend or end it early by ordinance. The ordinance directs the City Manager and the Community Development Department to study the land use, energy, water, noise, air quality, infrastructure, and fiscal impacts of data centers, to coordinate with applicable utility providers, and to bring proposed code amendments to the Planning Commission and City Council before the moratorium expires. It also establishes a process for a property owner or applicant to request relief from City Council if the moratorium would cause an undue hardship.
Because an ordinance requires two readings, applications could be filed between first reading and the ordinance’s effective date in an effort to avoid the moratorium. To address this, the exception for pending applications applies only to applications the City determined to be complete before the ordinance was introduced on first reading. The ordinance will take effect as provided in the City Charter following second reading and publication.
BACKGROUND:
Demand for data centers has grown rapidly across the country and in the Denver metropolitan area, driven largely by cloud computing and artificial intelligence. These facilities can differ significantly from typical commercial or industrial uses. They may require large and continuous amounts of electricity, which can necessitate new transmission and distribution infrastructure and affect grid reliability and utility costs; many rely on water-intensive cooling systems; and they can produce continuous noise from cooling equipment and emissions from diesel backup generators. Data centers also tend to occupy large buildings with relatively few employees, which may not align with the City’s goals for its commercial and employment areas.
The City’s Unified Land Use Code does not currently define data centers as a distinct land use or include standards tailored to their impacts. As a result, a data center could potentially be established in certain zone districts under broader use categories without review of these impacts.
Colorado law recognizes temporary moratoria as a legitimate land use tool. In Droste v. Board of County Commissioners of Pitkin County, 159 P.3d 601 (Colo. 2007), the Colorado Supreme Court upheld a local government’s authority to adopt a temporary moratorium to preserve the status quo while it studies and adopts new regulations. A moratorium prevents applications from being submitted and vesting under existing rules while the City’s review is underway. To withstand legal challenge, a moratorium should be reasonable in scope and duration and tied to a genuine planning effort, which is why the ordinance includes a defined time limit, exceptions for pending and vested projects, direction to staff to complete the study, and a hardship relief process.
Prior Actions or Discussions
• Council discussed data centers at a joint study session with Planning Commission on October 13, 2026
FISCAL IMPACTS:
Adopting the ordinance requires no direct City funding. The study and code amendments directed by the ordinance would be completed primarily with existing Community Development and City Attorney’s Office staff resources.
STAFF RECOMMENDATION:
Staff acknowledge that a moratorium temporarily limits a type of development and may delay potential new investment and tax revenue. However, data centers present impacts on energy, water, noise, air quality, and land use that the City’s current code was not designed to address, and once a project vests under existing rules, the City’s ability to address those impacts is limited. A short, clearly defined moratorium will give staff, the Planning Commission, City Council, and the public time to develop thoughtful regulations, while protecting pending and vested projects and providing a path for hardship relief. Staff recommend that City Council approve the ordinance on first reading and schedule a public hearing on second reading.
ALTERNATIVES:
• City Council may choose not to adopt a moratorium. Data center applications would continue to be accepted and reviewed under the existing Unified Land Use Code, and staff could still be directed to prepare code amendments.
• City Council may modify the duration of the moratorium, such as shortening or lengthening the six-month period.
• City Council may narrow the scope of the moratorium, for example by excluding cryptocurrency mining operations or applying the moratorium only in certain zone districts.
• City Council may consider adopting the moratorium as an emergency ordinance under the City Charter, which would allow it to take effect sooner but requires the findings and vote specified in the Charter.
PROPOSED MOTION:
Proposed Motion
I move to approve Ordinance 22-2026 on first reading establishing a Temporary Moratorium on the acceptance, processing, and approval of applications for Data Centers and directing staff to study and recommend land use regulations for data centers, and to set the second reading and public hearing on November 3, 2026.