City leaders are recommending changes to city zoning code concerning data center development in Sitka, as data center development proposals are popping up in Southeast and across Alaska.
At a regular meeting 7 p.m. Wednesday at Centennial Hall, the Planning Commission will consider a zoning code amendment that would define data centers and determine the zoning districts in which data center development could be allowed by conditional use permit.
The proposed code amendment would require that the Planning Commission hold a public hearing, and judge any proposed data center against the city's criteria for conditional use permits, before any data center is developed here.
City sustainability coordinator Bri Gabel and planning director Amy Ainslie outlined the proposed zoning code amendment in a Friday memo for the agenda of Wednesday's Planning Commission meeting. They explained that the idea for the new piece of zoning code originated with the city Sustainability Commission.
In a regular meeting on Oct. 5, the Sustainability Commission recommended that data centers be defined in the city code, and "that data centers only be allowed conditionally in appropriate zoning districts as determined by the Planning Commission, and not be permitted outright in any zoning district."
"That way, private investors couldn’t come in and sneakily build a data center without any community input beforehand," Sustainability Commission Chair Aurora Taylor explained during the Oct. 5 meeting.
As proposed by city staff, the zoning code amendment would define a "data center" as a "a facility that primarily contains electronic equipment used to process, store, and transmit digital information accessed by other systems or by users on other devices, which may be a free-standing structure; or a facility within a larger structure, that uses environmental control equipment to maintain the proper conditions for the operation of electronic equipment including servers and other high-performance computing devices, or data storage devices. A data center is not a server rack or room that is used to store and/or access data that is produced locally in conjunction with other permitted or conditional uses within the City and Borough of Sitka."
The amendment recommends allowing conditional use permits for data centers in the following zoning districts: public lands district; waterfront district; industrial district; general island district; and Gary Paxton special district.
If approved by the Planning Commission, the code amendment would go to the Assembly for final approval.
As of Saturday, four Sitkans had submitted public comments on the proposed zoning code amendment. Three people asked for an outright ban on data center development in Sitka. One asked that the Planning Commission pass the zoning code amendment as written so that a public hearing would be required before any future data center development.
The Oct. 16 memo lays out the likelihood that a developer will propose to set up a data center in Sitka.
"Although data centers have existed for at least twenty years, the development of machine learning and artificial intelligence (AI) has spurred rapid growth and expansion of the sector recently," the memo states. "As of April 2026, there (were) over 3,000 operational data centers (in the U.S.) with more than 1,500 new centers proposed or in development, with two thirds proposed in rural areas."
Smaller data centers have become more common in recent years with the development of water-cooled, high-density servers.
The memo lists the data center developments proposed or under way in Alaska.
A Petersburg resident who owns the former Ocean Beauty Seafoods property on the downtown waterfront has plans with the Silicon Valley-based company Greensparc to use part of the property for a small scale data center. Petersburg city code lacks any language about data centers; and a proposed one-year moratorium on data center development failed last month before the Petersburg Assembly.
In June, Wrangell’s borough assembly unanimously voted down a proposed land lease to Greensparc at the borough-owned 6-Mile Mill deepwater port site for a privately-run, 10,000-square-foot data center.
In Cordova in 2024, Greensparc installed a modular 150-kW, cloud computing data center the size of a large refrigerator inside the Humpback Creek Hydro Facility powerhouse.
"Also in Alaska, the first-of-its-kind offshore data center has been proposed in Cook Inlet and the State Department of Natural Resources is considering free land conveyance north of Wasilla, demonstrating increased statewide momentum in the data center industry," the city memo states. "Earlier this year, the Anchorage Assembly passed legislation to proactively establish a framework assessing data centers and other energy-intensive facilities.”
Data centers can have significant impacts on the communities they are located in, the memo states. "These include intensive energy consumption, high volume water usage for cooling, and operational impacts such as light and noise."
"As an islanded electric grid supplied entirely by hydroelectric power and developable land at a premium, the possibility of a small footprint, large electric consumption data center being proposed in Sitka is not entirely unlikely," the memo states.
