Denver Launches Data Center Working Group to Develop New Rules for Data Center Projects

The City and County of Denver on October 7, 2026, announced the members of its Data Center Working Group, marking the next phase of the city's process to consider new regulations for data center development.

The 29-member working group includes three Denver City Council members, 12 community members and representatives from organized labor, the data center industry, nonprofit and nongovernmental organizations, academia, healthcare and air-quality fields. The members were selected from more than 250 applicants.

Over the next several months, the working group will evaluate whether and under what conditions Denver should permit new data centers after the city's existing moratorium ends. The working group's recommendations could result in amendments to the Denver Zoning Code and Denver Revised Municipal Code, as well as changes to building and energy standards and other city policies affecting data center development and operation.

Denver's Data Center Moratorium

On May 18, 2026, the Denver City Council unanimously approved Council Bill 26-0431, imposing a temporary moratorium on certain data center applications. The ordinance was signed by Mayor Mike Johnston on May 20, 2026, and took effect the following day.

During the moratorium, Denver generally will not accept, process or approve zoning permit applications, site development plan applications or amendments to approved site development plans that propose:

• establishing a new data center as a primary use, or
• expanding or otherwise increasing the gross floor area of an existing data center use

For purposes of the ordinance, a data center generally means a facility primarily used for the storage, processing, management or transmission of digital data or to support cloud-computing services. The ordinance excludes certain communication services and telecommunications facilities already addressed separately under the Denver Zoning Code.

Existing facilities and projects that were permitted or under construction before the moratorium may generally continue to operate or proceed. However, additional phases, expansions and material amendments may be subject to the moratorium or regulations adopted through the current review process. Existing or grandfathered projects should expect scrutiny when seeking material amendments or expansions. 

The moratorium is currently anticipated to remain in effect through May 21, 2027. City officials have stated that they may seek an extension if the working group and city staff require additional time to complete their recommendations and proposed code changes. Any extension would require city council approval.

The city reports that five buildings in Denver are used entirely as data centers, ranging from approximately 53,000 to 188,000 square feet. More than 40 additional buildings report smaller data center operations within a larger facility.

Issues Under Consideration

Denver adopted the moratorium in response to the rapid acceleration of artificial intelligence and data center infrastructure buildout in order to respond to growing concerns about the electricity, water and infrastructure required to support large data center projects, particularly hyperscale and large-load projects.

The new working group will consider whether existing policy and regulations applicable to data center development – such as generally applicable zoning, building, energy, noise, air-quality, water and utility requirements – adequately address the scope and operations of new data center facilities. 

Specifically, the city has identified several subjects for potential recommendations:

• zoning classifications and appropriate locations for data centers
• electricity demand and utility-cost allocation
• water consumption and cooling technologies
• backup generation and associated air-quality impacts
• noise and other effects on neighboring properties
• building and energy-performance standards
• public health and impacts on disproportionately affected communities
• community engagement and potential community benefits
• Denver's climate and sustainability goals
• infrastructure capacity and economic-development considerations

As a clarification note, the new working group is serving in an advisory capacity only, charged with formulating policy and regulatory recommendations to city leaders. The new working group itself does not establish new development standards and regulations for data center development.

Working Group and Public Engagement Schedule

The working group held its first meeting on October 9, 2026, and is scheduled to continue meeting through May 2027. Meetings will be livestreamed and recorded, and the city expects to publish meeting materials and notes on its data center project website.

The city has also outlined two principal rounds of public engagement:

1. November-December 2026 – Identifying Issues and Priorities. The first phase will gather input concerning community needs, concerns and perceived opportunities associated with data center development. It is expected to include community conversations, neighborhood focus groups and at least one citywide meeting.
2. March-April 2027 – Reviewing Potential Policy Options. The second phase will give the public an opportunity to review and comment on potential policies and recommendations developed through the working group process.

Developers, operators, utilities, property owners, investors, lenders and other interested parties may submit comments throughout the process. Participation during the working group phase may be particularly important because the recommendations developed during this period are expected to inform subsequent legislative and rulemaking proposals.

Considerations for Data Center Developers and Real Estate Stakeholders

The working group process is still at an early stage, and no permanent regulations have been proposed. Nevertheless, parties considering data center investments in Denver should account for the moratorium and possibility of materially different development standards.

• Application and Vesting Status: Parties should confirm whether existing permits, site development plans and other approvals remain effective and whether proposed changes could be treated as an expansion or new application subject to the moratorium.
• Site Selection and Zoning: Current zoning may not predict whether a property will remain eligible for data center use after the city completes its review. Potential geographic restrictions, separation requirements or limitations on hyperscale facilities could affect site value and development feasibility.
• Power and Water Availability: General utility availability may not be sufficient if future regulations require enhanced studies, infrastructure commitments, water-efficient cooling, demand-management measures or evidence that the project will not shift costs to other utility customers.
• Environmental and Operating Conditions: Future approvals could include standards governing cooling systems, backup generators, emissions, noise, operating hours, energy sourcing or reporting. These requirements may affect building design, equipment procurement and operating costs.
• Community Engagement: Developers may need to conduct outreach earlier in the site-acquisition and entitlement process and prepare a project-specific record addressing infrastructure use, neighborhood effects, employment, tax benefits and proposed mitigation.
• Transaction Documents: Purchase agreements, options, ground leases, development agreements and joint venture documents should address regulatory delay, moratorium extensions, changes in applicable law and the possibility that a proposed data center use cannot obtain approval. Parties should also consider extension rights, staged deposits, entitlement conditions, and allocation of utility and infrastructure costs.
• Existing Facilities and Future Phases: Owners of existing data centers should evaluate whether contemplated expansions, redevelopment or additional phases could become subject to new requirements, even if the existing facility may continue operating.

The regulatory process may also affect properties outside Denver. Several Colorado municipalities and counties are separately considering or implementing data center moratoria and regulations while the Colorado Public Utilities Commission is reviewing utility requirements applicable to large electric loads. As a result, data center development standards may differ materially among Front Range jurisdictions. Any developers pursuing Front Range site locations should contrast city and county-level regimes and not view the metro-Denver area through a single lens for purposes of entitlements and approvals.

How Holland & Knight Can Help

Holland & Knight's Real Estate, Land Use, Energy and Government Affairs attorneys are closely monitoring Denver's Data Center Working Group and related regulatory developments across Colorado. Our attorneys advise data center developers, operators, investors, lenders, utilities and property owners regarding site acquisition, land use and entitlements, utility service and infrastructure agreements, financing, construction, leasing and the allocation of regulatory risk in transaction documents.

For more information or questions concerning Denver's data center moratorium, the working group process or a specific project, please contact the authors or other members of Holland & Knight's Denver team, including Mara Sheldon, Sydney Houseman and Keith N. Sambur.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.