Fort Smith officials to review data center development rules

A review of city rules and regulations on data center development, including the possibility of regulating data center water use by Fort Smith water system customers in the region, will be on the Aug. 11 study session agenda of the Fort Smith Board of Directors.

There are no known data centers being considered in the Fort Smith metro, but there are five large announced data center projects in the state. The facilities are either planned or in some stage of construction in Clarksville, Conway, Little Rock, Pulaski County, and West Memphis.

According to Cisco, a data center is a facility that contains “a network of computing and storage resources that enable the delivery of shared applications and data. The key components of data center design include routers, switches, firewalls, storage systems, servers, and application-delivery controllers.”

The sudden increase in recent years of data centers built primarily to feed artificial intelligence platforms, with some approved and built with little to no public input, has resulted in a broad nationwide pushback. Some projects required local elected officials to sign non-disclosure agreements (NDAs) which effectively blocked public awareness of a data center development prior to a vote on a project by a government body. Concerns with data centers involve higher electric rates, increased water usage, and ground and noise pollution. New York Gov. Kathy Hochul signed an executive order on July 14 that places a one-year moratorium on “hyperscale data centers.”

“New York has always been at the forefront of innovation and change but we’ve also always guaranteed that New Yorkers benefit,” Hochul said in a statement. “As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead.”

To push back against the pushback in Arkansas, Rep. Aaron Pilkington, R-Knoxville, recently created the Arkansas Connected Communities Association (ARCC) to promote data center development in a way that is “fiscally responsible and environmentally sound.”

“Data centers and AI infrastructure are not abstract concepts — they are the physical backbone of the digital economy,” noted part of an ARCC press release. “They generate billions of dollars in capital investment, create high-quality jobs, dramatically expand local tax bases, and represent one of the most significant economic development opportunities Arkansas communities have ever seen.”

Arkansas Act 851 of 2023 prevents local Arkansas governments from having a ban on data center development. The law does not prevent local governments from adopting rules that create delays or significant restrictions with data center projects.

During the Fort Smith board’s July 21 regular meeting, Director Kevin Settle requested that the board review existing city rules and consider rules that give the city more ability to regulate data center development. Director Christina Catsavis seconded the request to place it on the Aug. 11 study session.

“But I’d also like to see if we could put some board action in there that makes the board of directors have to approve a data center,” Settle said during the July 21 board meeting. “And the big one is, can the board have to approve a data center that is tied to a water system that is not part of our city? That is a big thing that I think we should talk about. Because we are a regional water supplier. What I don’t want to happen is another city outside the city of Fort Smith brings in a data center, and then the next thing we know, we’re spending 4 million or 5 million gallons a day that we didn’t approve.”

In a June 10 memo, Deputy City Administrator Maggie Rice said the board approved a zoning change in 2023 that requires conditional use approval for data centers in “Industrial Light” zones, and “permitting them by right in Industrial Moderate (I-2) and Industrial Heavy (I-3) zones.”

“Staff considers the zoning code a dynamic document and works at being proactive to ensure sustainable land use while facilitating and streamlining development,” Rice noted in the memo.

If Fort Smith were to create more stringent data center guidelines, it would follow other Arkansas cities such as Fayetteville and Little Rock.

The city of Little Rock on June 3 stiffened its development policies to target data center development, and “promote orderly economic development.” The approved ordinance creates “a clear regulatory framework for the development of data centers inclusive of operational standards, reporting obligations, and development regulations.”

The city of Fayetteville has implemented new data center regulations that include water and electricity impact reports, setbacks, buffers, generator guidelines, and a conditional use review process before approving a data center development. The Fayetteville City Council approved the changes in a unanimous vote. The city also amended its NDA rules which now require approval from the mayor and city attorney before the city can sign an NDA.

“Our code related to data centers is already strong,” Fayetteville Mayor Molly Rawn said in a statement. “And it’s important we continue to update it to keep up with the changing reality of this technology. We’ve drafted legislation … that strengthens city code when it comes to data centers as our utility customers, even when outside city limits.”