Amazon Begins Construction of $2 Billion Data Center Amid Local Opposition

[Mexico City = Shim Young-jae, Special Correspondent] In Gilroy, an agricultural city in California, USA, local opposition is growing against Amazon's $2 billion data center construction. The issue is that construction had already begun when residents started to voice their objections. Amazon and the city of Gilroy had negotiated the project for about five years, but the construction of a large data center on 56 acres of farmland was approved by a single city official without any public meetings or city council votes.

Approval Without Public Meetings or Votes... Based on 45-Year-Old City Plan

On July 7 (local time), the Wall Street Journal reported that many residents of Gilroy only learned about the $2 billion project after construction of the Amazon data center had already started.

Gilroy, known as the "Garlic Capital of the World," is an agricultural city located about 30 miles south of San Jose.

Amazon Web Services (AWS) purchased land between a Walmart Supercenter and the Gilroy Premium Outlets in 2020 and applied for the construction of the data center. The project covers a site of 56 acres with a total floor area of 438,500 square feet.

However, according to the WSJ, there were no separate public meetings or votes during the approval process last July. The project was approved when the director of the local development department signed off on it. This was possible because the project met the city planning criteria for industrial development near a highway established 45 years ago.

Greg Bozzo, the deputy mayor of Gilroy, explained that large industrial projects had been approved in the same way in the past, but there was no significant opposition at that time.

He stated, "When the food distribution center came to Gilroy without resident participation, it was not an issue, but the data center coming in without giving residents a chance to participate is a problem."

Roger Wenner, AWS's vice president of economic development, countered that the project underwent a lengthy approval process that included public notice and a comment period.

He said, "We followed the standard approval process for industrially designated sites, but we recognize that the community wanted more communication at an earlier stage, and we take that seriously."

AWS later explained that they met directly with residents and held open houses to gather feedback and answer questions.

"Most Found Out After Construction Started"... 5 Years of Negotiation

While there were public notices and environmental reviews in the process, the project was virtually invisible to many residents.

Colin Crew, an elementary school teacher, stated at a recent city council meeting, "While not a lot, a significant number of residents only learned about the project after construction had already begun."

Emails obtained by the WSJ indicate that Amazon and Gilroy negotiated the project details over about five years.

The city of Gilroy also conducted a long-term environmental impact review. However, there were no public meetings, and there was little media coverage, leading many residents to be unaware that the project was underway, the WSJ reported.

Negotiations were not always smooth.

According to emails obtained by the WSJ, Amazon expressed dissatisfaction with administrative delays last spring, stating, "Our project has been delayed multiple times and is currently over a year behind schedule."

City officials also showed fatigue regarding Amazon's demands. One official wrote during the negotiation process about a specific issue, "This matter is no longer up for discussion."

Both sides were cautious about the scope of information to be disclosed.

In January of this year, when residents expressed concerns about the potential for battery fires similar to those that occurred in nearby Moss Landing, a Gilroy fire department official noted that Amazon's fire suppression system is proprietary technology and advised that "care should be taken to limit the level of technical details released publicly."

In response, an Amazon representative stated they would confirm what information could be disclosed to the public.

Concerns Over Water Use... "Direct Construction of Wastewater Pipeline"

One of the key concerns of residents is water. Given the region's struggles with drought, they are understandably sensitive to the water usage of a large data center.

College student Landon Sepulveda, who has opposed the project, pointed out that the data center will use clean water until the wastewater recycling system is completed.

After the project became widely known earlier this year, resident Rosa Rodriguez sent an email to city officials in February expressing her desire to comment on the environmental review report. She argued, "The damage that a data center could cause in a drought-stricken state cannot be undone."

However, city officials responded that the comment period for the environmental review had already ended in September 2024.

The deputy mayor explained that Amazon has committed to building a pipeline at its own expense to supply wastewater to the data center.

He also emphasized the economic benefits the data center would bring, including increased tax revenue and construction jobs, as well as a $1 million donation from Amazon for the purchase of a new fire truck for Gilroy.

Amazon has also provided grants to local nonprofits and sponsored the annual Gilroy Garlic Festival.

However, opposing residents argue that transparency in the decision-making process is more important than economic support.

Sepulveda stated that residents do not want sponsorship of the garlic festival but rather want the city council to inform the community about large projects that will affect them and provide opportunities for input.

He said, "Everyone has jobs and lives; we elected them to inform us, and they should not be looking over our shoulders."

Will the Approval Process for Data Centers Change?

Local opposition could change the approval process for data centers in Gilroy in the future.

According to the WSJ, the Gilroy city council is considering requiring that large projects like data centers receive approval from the city planning commission.

This would also include a mandate for developers to hold community meetings and inform nearby residents about the project.

The deputy mayor stated, "There is an opportunity to change the way we operate in Gilroy; we are adapting to the times."

This controversy highlights the distinction between whether the project itself went through legal procedures and whether residents were able to participate meaningfully in the decision-making process.

AWS maintains that it followed standard procedures, including public notice and comment periods. In contrast, residents argue that they only became aware of the $2 billion data center after construction had already begun, claiming that the existing procedures were insufficient.

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