The Fort Smith Board of Directors is scheduled to vote on October 6 on a proposed ordinance aimed at increasing city oversight for data center developments. If approved, the ordinance will require utilities to provide detailed information about energy availability and potential loads associated with these projects.
On August 11, board members instructed city staff to create or amend regulations concerning water use, zoning, and other pertinent areas to deter data center construction within the city and its metro area. Currently, there are no data centers being planned in Fort Smith, according to Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce. However, five large data center projects are underway elsewhere in Arkansas.
The ordinance under consideration mandates a development plan review by the Planning Commission and final approval from the board for data center projects in industrial zones. Additionally, it requires an eight-foot opaque wall around the property, setbacks of 500 feet from each property line, and documentation from utilities regarding capacity and load.
While the Planning Commission unanimously supported the ordinance, it does not address water rates or access to the city’s regional water system. During the August 11 meeting, Director Kevin Settle suggested potentially higher water rates for data centers and the need for the board to have authority over specific water connections outside city limits.
Background context includes legislation—Arkansas Act 851 of 2023—that prohibits local governments from outright banning data centers but allows them to implement rules that may impose delays or significant restrictions. The emergence of data centers has prompted local concerns about water usage, rising utility rates, and noise pollution. Authorities in various regions, including New York, have reacted with moratoriums and restrictions, reflecting a broader national trend.
Data centers present a complex situation, intertwining economic development, energy policy, and sustainability. While they can generate substantial tax revenue, they also significantly increase energy demand. Various states reportedly offer tax incentives to attract data centers, while also attempting to balance development with environmental considerations.
