San Diego delays data center after residents — including Lord Farquaad, Elmo — address City Council

( KSWB/KUSI ) — San Diego City Council (SDCC) and community members — including two people dressed as Lord Farquaad from “Shrek” and Elmo from “Sesame Street” — weighed in Tuesday on a moratorium on developing and expanding artificial intelligence data centers in the city.

The moratorium is an effort by the city to pause a potential federal plan to convert the Naval Information Warfare Systems Command (NAVWAR) site near Old Town into a 400-megawatt AI data center .

The measure, which passed unanimously, will temporarily pause the project for 45 days, after which city leaders could vote to extend the block for an additional 10 months and 15 days.

Manchester Financial Group, a well-known local developer led by Doug Manchester, was selected by the Navy in 2024 to redevelop the 70-acre property.

However, city leaders say the developer originally proposed converting the site into a mixed-use development with an emphasis on Navy military housing.

“When Manchester Development came into my office at City Hall earlier, they told me this would be housing. They showed me an entire portfolio of housing and park space and commercial real estate and job creation. That is what they promised the people of this community,” San Diego City Councilmember Marni Von Wilpert said earlier this month .

However, emails obtained by Voice of San Diego painted a different picture and exposed that Manchester was exploring the possibility of building the largest data center in California on the land (the developer said in the article it has also considered building a university, stadium or hospital).

According to the report, the deal between Manchester and the Navy means that if the developer builds a new system command center for the Navy, it can use the rest of the land to build something else under a 99-year lease.

In an Oct. 22 statement, Manchester Financial Group wrote : “As for the concept of a Data center, our development team had early, informational conversations with energy providers to understand what might be feasible, but there are no negotiations underway and no agreements in place.”

Despite supposed potential plans to build something other than a data center on the land, the possibility of a massive AI data center coming to San Diego is ruffling a lot of feathers.

During a SDCC meeting Tuesday morning, dozens of community members urged council members to vote “yes” on the 45-day moratorium during the public comment portion.

“You’re the gatekeepers,” said one woman.

These data centers are facilities filled with specialized computers that are used to power and train artificial intelligence systems. AI chips require significant amounts of electricity to communicate without delays, producing extreme heat that uses millions of gallons of water to cool down and operate.

The proposed 400-megawatt AI data center at NAVWAR would require the equivalent of powering 300,000 homes to run.

While the owner and operator of the data center would be responsible for upgrading the power grid to meet those needs, advocates against the project have expressed concerns that the costs would simply be offloaded to everyday customers.

Others have also expressed concerns that it would drive up the cost of water, divert resources from other community needs like affordable housing and be harmful to the environment.

Aside from support for the moratorium, many community members who spoke Tuesday also advocated for a permanent ban on AI data centers in the county.

While the land where the proposed data center would go is federally owned, city leaders like Sean Elo-Rivera say the temporary pause would give the city time to write a permanent law on the development of data centers in San Diego.

Elo-Rivera has also asked members of Congress to get involved.

“Currently under the city’s land use regulations, a data center will be treated almost similar as a warehouse, which we know this is very different,” San Diego Mayor Todd Gloria (D) said during an interview Tuesday.

“This moratorium will allow us to have the pause that’s necessary to develop those regulations, pass them by the city council, and then those who wish to invest in our city know the rules that they must follow,” he added.

The Navy is currently conducting an environmental review of the NAVWAR site, including the feasibility of building an AI data center on the land.