Getting your
Trinity Audioplayer ready...In May 2025, the Hayward Planning Commission, without a City Council vote, approved a “hyperscale” data center by STACK Infrastructure — a 310,000-square-foot facility with an electrical capacity equivalent to providing power to approximately 76,000 homes simultaneously. Concerns about oversight for such large projects soon followed.
Between the rapid deployment of data center infrastructure and community pushback, Bay Area cities are rushing to establish new guidelines to regulate the resource-intensive facilities while balancing the importance of raising revenue for strained city budgets and concerns about the resource demands of the powerful tech infrastructure. Several of the region’s cities have sought to slow or outright stop their development.
“While I understand the economic arguments often made for these facilities, the environmental costs, particularly in California’s current climate reality, are too significant to ignore,” Hayward resident Stephanie VanGilder wrote to the California Energy Commission in June. “In a region already facing chronic drought, shrinking snowpack, and increasingly unpredictable water availability, allocating scarce water resources to a private data center is irresponsible.”
Less than a year after STACK’s approval, the Hayward City Council established a new land use category explicitly for large data centers that required more transparency and oversight by elected officials.
As data center proposals come before Bay Area government bodies for approval, cities are adapting on the fly to regulate them and respond to community pushback. A Gallup poll published in May found that 71% of Americans opposed constructing a data center in their area.
Oakley passed a one-year moratorium on data centers in April while the city assesses their environmental and resource impacts. Richmond is also directing staff to develop a moratorium on data centers to study their long-term impacts.
Instead of an outright moratorium, Hayward pursued stricter controls on approvals.
“Previously, data centers were not specifically called out in the City’s code and therefore fell under the umbrella category of ‘office’ use, which in some cases, is able to be approved administratively,” the city said in an email to this news organization. Data center proposals larger than 50 MW are now required to receive a public hearing before the city council for approval.
Data centers with backup generator systems that utilize less than 50 MW — a benchmark equivalent to 25,000 to 50,000 homes — do not require state review from the California Energy Commission. These proposals can proceed directly to local government agencies for building approval, though they still must comply with state environmental laws.
Data centers with backup generating systems between 50 and 100 MW, like STACK, are required to seek a Small Power Plant Exemption from the California Energy Commission, allowing them “an exemption if it finds that the proposed facility will not create a substantial adverse impact on the environment or energy resources,” according to the agency.
The STACK data center would be among the largest under construction in the East Bay in terms of energy capacity.
The 11.3-acre project received several exceptions, including permission to build as high as 100 feet above the usual 75-foot limit, and to provide fewer parking spaces than normally required. Plans also call for 28 diesel backup generators capable of producing 76.6 MW.
STACK agreed to a $2 million community benefits package, including a new bike path, enhancements to local parks and donations to the Hayward Area Shoreline Planning Agency for protection and climate change adaptation, according to the agreement.
Not all council members were satisfied with the benefits agreement. Hayward Councilmember George Syrop said at an April 21 meeting that STACK had “pulled a fast one” with the $2 million package, comparing it to much larger packages in Silicon Valley.
“A 49 MW (facility), which is below the threshold that qualifies for a (major conditional use permit), is one-fifth of all the homes in Hayward in terms of energy usage,” Syrop said. “We deserve to be accountable for that amount of resource usage. … Just from a negotiating standpoint, we could have asked for more last time and we should ask for more next time.”
STACK did not respond to Syrop’s accusation.
The largest monetary benefit to Hayward lies in the tax revenue the facility could generate. The city estimates the site could generate up to $10.5 million a year in general fund revenue once completed, while a more conservative scenario puts the eventual figure closer to $8.3 million. These figures are based on the projected Utility User Tax revenue from assumed electricity use, property tax revenue, and sales tax revenue, however, none of it is based upon actual billing data. These estimates were determined by industry benchmarks and not observed usage.
As construction continues at 26203 Production Ave. and 26062 Eden Landing Road, semi-trucks exiting State Route 92 drive past the small business lots and offices for medical startups into the chain-linked site. One question that remains is whether the benefits will outweigh the public’s concerns when the data center comes online.
“Who seeks to profit off this? Not the residents of Hayward,” VanGilder said. “California’s natural resources are too limited, and too essential, to be sacrificed for another high-consumption industrial facility.”