HomeMy WebLinkAboutPD Recommendation Report (PL-CCI-2026-000018)1
RBill170 – 7.1.2026
COUNTY OF HAWAI‘I PLANNING DEPARTMENT RECOMMENDATION REPORT
COUNTY COUNCIL INITIATED BILL NO. 170 (PL-CCI-2026-000018) AMENDMENT TO CHAPTER 25 OF THE HAWAI‘I COUNTY CODE 1983 (2016
EDITION, AS AMENDED), RELATING TO ZONING
PLANNING ANALYSIS
In 1996, the Hawaiʻi County Council adopted Ordinance 96-160, which
substantially amended Chapter 25 (Zoning) of the Hawaiʻi County Code 1983. Among
those amendments was the establishment of the Industrial-Commercial Mixed Use (MCX)
zoning district. In creating the district, the Council adopted a list of permitted uses, most
of which were derived from the existing Limited Industrial (ML) zoning district set forth in
the existing Hawaiʻi County Code at the time. In addition, the Council also added uses
reflecting emerging technologies and business activities at the time, including “data
processing facilities.”
The term “data processing facilities” generally referred to office-oriented
businesses that used computers to process information, maintain electronic records, or
provide related administrative and technical services. Such activities were consistent with
the purpose and intent of the MCX district: to accommodate a mix of commercial and light
industrial uses, promote diversified businesses and employment opportunities, and avoid
exposing nonindustrial uses to unsafe or unhealthy environments. The district was
therefore intended to accommodate uses generally compatible with nearby commercial
development and other nonindustrial land uses.
Since 1996, internet-based services, artificial intelligence, cloud computing, and
digital storage have changed the scale and physical characteristics of data-processing
operations. Modern data centers may be standalone or accessory facilities housing
computer servers, networking equipment, and supporting infrastructure used to process,
store, and transmit digital information. Standalone data centers may have infrastructure
demands and operational characteristics that differ substantially from the office-oriented
data processing facilities contemplated when the MCX district was established.
2
Recognizing that these facilities differ substantially from the traditional data
processing facilities contemplated when the MCX district was established, the County
Council introduced Bill 170, which proposes defining "data center" as a separate land use
within the Zoning Code while amending the definition of "data processing facility" to
expressly exclude data centers. As defined in the proposed bill, a data center is an
industrial-scale operation dedicated to the processing, computing, transmission, or
dissemination of digital data that requires supporting infrastructure beyond that typically
accessory or incidental to office, commercial, or public institutional uses. Unlike office-
based businesses where computer processing is performed as part of administrative or
professional services, modern data centers are commonly developed as standalone
principal uses with distinct infrastructure and operational requirements. As proposed in
Bill 170, data centers would not be permitted in any zoning district.
Data centers vary substantially in building area, equipment density, power
demand, cooling technology, and campus configuration. Potential land use and
infrastructure considerations include electricity demand; water demand associated with
cooling; noise from mechanical equipment and emergency generators; access to
electrical and telecommunications infrastructure; emergency response; cumulative
development; and compatibility with residential, agricultural, rural, and other sensitive
uses. Building area is a measurable zoning threshold that helps regulate the scale of
development, although it does not by itself capture every potential operational impact.
To evaluate how these considerations may be addressed through zoning, the
Planning Director reviewed selected regulatory approaches in other jurisdictions. Several
of these approaches were adopted, amended, or under active reconsideration during
2024 through 2026, reflecting the rapidly evolving nature of the industry and local
regulation. Table 1 provides a comparison as of the date of this report; the cited
approaches should not be read as uniform national standards.
3
Table 1. Regulatory Approaches for Modern Data Centers
Jurisdiction Where Permitted Approval Process Notable Features
Loudoun
County, Virginia
(1)
Industrial Park, General
Industry, and Mineral Resources–Heavy Industry districts
Special Exception
(Planning Commission/Board Approval)
Standard 500-foot buffer to residential structures.
Fairfax County, Virginia
(2)
Specified commercial
and industrial districts.
Permitted by right up
to size limits; larger
facilities require a Special Exception
Commercial districts limited to 40,000 sq. ft. and industrial districts to
80,000 sq. ft. unless a
Special Exception is
approved. Requires a 200- to 300-foot separation from residential districts or
uses and a noise study.
Albemarle County, Virginia
(3)
Designated commercial and industrial districts. Accessory data centers are also permitted when
serving a primary use.
By right for facilities up to 40,000 sq. ft.; Special Use Permit required for facilities
exceeding 40,000
sq. ft.
Public water and sewer required; closed-loop or
recycled water cooling; 200-foot setbacks from property lines; 500-foot setback from Rural
Areas zoning; generator
operating and noise standards.
Prince William County, Virginia (4)
Mapped Data Center Opportunity Zone Overlay District in
designated office and
industrial areas near high-voltage transmission infrastructure.
Permitted by right within the overlay and eligible
underlying zoning
districts; overlay established by ordinance.
Directs data centers to infrastructure-rich areas while requiring enhanced design standards, screening of mechanical
equipment, landscaped
buffers adjacent to residential uses, fencing standards, and allowing increased floor area ratio
(FAR) within the overlay.
Tippecanoe
County, Indiana
(5)
Industrial districts (Data Centers and Large Data Centers).
Special Exception
required for Large Data Centers exceeding 10,000 square feet in Industrial districts.
Distinguishes large data
centers from conventional programming and data-processing services by
4
establishing them as a
separate land use.
Hancock
County, Indiana
(6)
Limited to Industrial General (IG) zoning within a Data Center Overlay District.
Site-specific overlay approval.
Requires discretionary
approval through an overlay district that combines industrial zoning with additional development and design
standards.
Boone County, Indiana
(7)
New applications
temporarily restricted
while regulations are developed.
Temporary
moratorium.
Allows evaluation of
utility, infrastructure,
land-use, and community
impacts before authorization.
References: (1) SIGNED-Data-Center-CPAM-ZOAM-Grandfathering-Resolution;
(2) ZO 112.1-2024-9
(3) SECTION 5 - SUPPLEMENTARY REGULATIONS | Code of Ordinances | Albemarle County, VA | Municode Library
(4) PART 509. - DATA CENTER OPPORTUNITY ZONE OVERLAY DISTRICT | Code of Ordinances | Prince William
County, VA | Municode Library
(5) Unified-Zoning-Ordinance-UZO-Third-Edition-PDF
(6) Ordinance-2026-6E-Data-Center-Sitingpdf
(7) Boone County Commissioners Approve Moratorium on Data Centers. - Boone County, Indiana
The above jurisdictions generally direct standalone data centers to industrial
districts or designated overlay districts and frequently require discretionary review for
larger or more intensive facilities. These approaches provide examples, not binding
standards, for evaluating infrastructure capacity, noise, traffic, buffering, screening,
emergency power, water use, and compatibility. Because several jurisdictions are actively
revising their regulations, the table reflects a point-in-time comparison and should be
periodically verified against the applicable jurisdiction’s current code.
A review of the zoning regulations of the other Hawaiʻi counties did not identify a
comprehensive, mapped regulatory framework specifically governing modern standalone
data centers. Honolulu references data processing or data storage uses in existing use
classifications, while Maui and Kauaʻi do not appear to maintain a separate data center
overlay or comparable comprehensive framework. The out-of-state examples are
therefore useful as comparative approaches, but Hawaiʻi County’s island setting, utility
5
systems, water resources, industrial land supply, and community context warrant a locally
tailored framework.
Smaller office-oriented data processing businesses remain consistent with the
purpose of the MCX district. Computer servers, server rooms, telecommunications
equipment, and related infrastructure that are accessory and subordinate to an otherwise
permitted principal use should also remain allowable as part of that principal use. To avoid
an unintended exemption for a separately operated data center, the accessory exclusion
should apply only when the equipment primarily supports the onsite principal use and
does not constitute the principal use of the property itself.
PLANNING DIRECTOR’S RECOMMENDATION
The Planning Director supports Bill 170’s distinction between modern data centers
and traditional data processing facilities. The legislative history of the MCX district, the
evolution of data center development, the purposes of the County’s industrial districts,
and the comparative approaches reviewed support treating standalone data centers as a
distinct land use.
The Planning Director also finds that complete exclusion of data centers as a
permitted use in the Zoning Code may have unintended consequences and drive these
uses to the State Land Use Agricultural district where they may apply for a Special Permit.
Additionally, the complete exclusion of data centers as a permitted use in the Zoning Code
may also unnecessarily preclude appropriately scaled facilities that could be
accommodated in the General Industrial (MG) district. Standalone data centers are more
appropriately accommodated in the General Industrial (MG) district, subject to a size
limitation and discretionary review. A data center having no more than 10,000 square feet
of gross floor area devoted to data center use should be permitted as a principal use in
MG. A data center exceeding this threshold should require a Use Permit. For threshold
purposes, the gross floor area of all data center buildings and portions of buildings on the
same building site, contiguous sites under common ownership or control, or a unified
development plan should be aggregated. This prevents phased or multi-building
development from avoiding discretionary review.
6
The recommended approach therefore preserves Bill 170’s definitional distinction
while establishing a permitting path in the MG zoning district based on facility size and
discretionary review.
The Planning Director recommends modifying Bill 170 to permit data centers in the
General Industrial (MG) district, with facilities having more than 10,000 square feet of
gross floor area devoted to data center use subject to a Use Permit. Accessory and
subordinate server rooms and similar equipment supporting an otherwise permitted onsite
principal use should be excluded from the definition, subject to clear limitations.
Planning Director Recommendation No. 1: Amend the General Industrial (MG) district
regulations to permit a data center as a principal use when the aggregate gross floor area
devoted to data center use does not exceed 10,000 square feet.
Add the following use to Section 25-5-152(a):
“Data centers having an aggregate gross floor area of ten thousand square feet or
less devoted to data center use, subject to section 25-4-19.”
Planning Director Recommendation No. 2: Amend Sections 25-2-61 and 25-5-152(b)
of the Zoning Code to require a Use Permit for a data center when the aggregate gross
floor area devoted to data center use exceeds 10,000 square feet, as follows:
• Amend Section 25-2-61, Applicability; Use Permit required, to add data centers
having an aggregate gross floor area greater than 10,000 square feet devoted to
data center use.
• Add the following use to Section 25-5-152(b): “Data centers having an aggregate
gross floor area greater than ten thousand square feet devoted to data center use,
subject to Section 25-4-19.”
Reasons: The 10,000-square-foot threshold provides a clear and measurable distinction
between smaller facilities and those warranting site-specific review. Building area does
not independently measure electricity demand, water use, noise, cooling technology, or
generator capacity; therefore, facilities above the threshold should undergo Use Permit
review addressing their actual infrastructure requirements and land use effects.
7
Specifically identifying data centers as a use within the MG district establishes a clear
and appropriate regulatory location for the use and avoids unintended interpretations that
could allow standalone data centers in agricultural districts. The MG district is more
appropriate for the infrastructure and operational characteristics of data centers, while the
Use Permit process allows larger facilities to be evaluated for compatibility, infrastructure
capacity, and site-specific impacts.
Planning Director Recommendation No. 3: Amend the proposed definition of “data
center” to read as follows:
““Data center” means a building, portion of a building, or group of buildings used
principally for an industrial-scale operation that houses computer systems,
servers, networking equipment, or similar equipment for the processing,
computing, storage, transmission, hosting, or dissemination of digital data,
together with supporting electrical, cooling, ventilation, security, fire-suppression,
backup-power, and telecommunications equipment or facilities. The term does not
include computer servers, server rooms, telecommunications equipment, or similar
data-processing equipment that: (1) is located on the same building site as an
otherwise permitted principal use; (2) is accessory and subordinate in area,
function, and operation to that principal use; (3) primarily supports the operation of
that onsite principal use; and (4) is not separately leased, licensed, or operated as
a data center or as a data-processing, hosting, storage, or transmission service for
unrelated offsite users.”
Reasons: Commercial, industrial, governmental, telecommunications, medical,
educational, and institutional uses commonly rely on onsite servers and related
equipment. These facilities differ from standalone data centers because they are
accessory and subordinate to, and primarily support, the principal onsite use. The
accessory-use exclusion avoids unintentionally regulating customary information-
technology infrastructure while preventing a separately operated or tenant-occupied data
center from being characterized as an accessory use.
8
Planning Director Recommendation No. 4: Add a new Section 25-4-19, under Use
Regulations, to establish standards for data centers, as follows:
“Section 25-4-19. Data centers
(1) For purposes of this section, “gross floor area devoted to data center use”
includes floor area containing computer systems, servers, networking
equipment, or supporting electrical, cooling, ventilation, security, fire-
suppression, backup-power, and telecommunications equipment principally
serving the data center use.
(2) The gross floor area of all data center buildings and portions of buildings
shall be aggregated when located on the same building site, on contiguous
building sites under common ownership or control, or as part of a unified or
phased plan of development.
(3) A data center development shall not be divided among separate buildings,
building sites, ownership entities, tenants, applications, or phases for the
purpose of avoiding the Use Permit threshold.
(4) Any change or expansion that causes the aggregate gross floor area
devoted to data center use to exceed 10,000 square feet shall require
approval of a Use Permit prior to construction or establishment of such
change or expansion.
(5) For a data center requiring a Use Permit, the following matters may be
considered, as applicable, through the Use Permit review process and
conditions of approval:
(A) Electrical demand and capacity, generation source, necessary
transmission or distribution improvements, and cumulative effects on
the electrical system;
(B) Water source and demand, cooling technology, wastewater
generation, and water-conservation measures;
(C) Operational and emergency-generator noise, including
preconstruction modeling and post-occupancy verification, as
appropriate;
9
(D) Emergency access and response, fire suppression, hazardous
materials, battery energy storage systems, and emergency-
response planning;
(E) Building mass and setbacks, landscaping, equipment screening,
exterior lighting, and compatibility with surrounding land uses; and
(F) Construction and operational traffic, solid and electronic waste, heat
rejection, air emissions, and greenhouse-gas considerations.”
Reasons: These standards provide a consistent method for applying the 10,000-square-
foot threshold and ensure that the overall scale of a data center development is
considered, including related buildings, sites, and phases. The aggregation provisions
prevent larger projects from being divided to avoid discretionary review and clarify when
an expansion requires a Use Permit. Because data centers can vary substantially in their
energy and water demands, cooling systems, noise, emergency systems, and other
operational impacts, the identified considerations allow these matters to be evaluated on
a site-specific basis and addressed through appropriate conditions of approval.
Based on the foregoing analysis, the Planning Director recommends that the
Windward and Leeward Planning Commissions forward a favorable recommendation on
Bill 170 to the County Council, subject to the amendments described in this report.
PLANNING COMMISSION ACTION:
The Windward and Leeward Planning Commissions are required to act on Bill 170
as provided by Section 25-2-43(b) of the Zoning Code. The County Council referred the
bill on July 7, 2026; therefore, the Commissions must transmit their recommendations by
November 4, 2026. Each Commission may recommend approval in whole or in part,
approval with modifications, or rejection. The recommendations will be forwarded
separately and concurrently to the County Council. Failure to act within the 120-day
period constitutes an unfavorable recommendation.