The Monterey Park City Council voted last week to explore ways to permanently ban data centers in the city.

Monterey Park has a 45-day moratorium on new data center projects that has been in place since late January, but the vote came in tandem with a community campaign against a data center project planned for a site on Saturn Street, LA Public Press reported.

Upgraded electric facilities in Monterey Park played a big part in drawing data center developers, including the firm developing 1977 Saturn St.

The project would be a roughly 250K SF facility. The approximately 16-acre Saturn Street site is five minutes from the Mesa substation, which Southern California Edison upgraded within the last few years to roughly double its capacity, and it is served by another similarly close substation, according to an environmental analysis.

Residents' concerns included environmental repercussions, such as the facility's water use, power demand and noise pollution.

Australian asset management company HMC Capital is the developer of the contested data center. HMC Capital acquired the office building and parking lot that previously occupied the site for $39M from EQ Office in December 2024.

An attorney representing HMC Capital, which has $18.7B in assets under management, threatened to sue.

“I’m here tonight to inform the city that its actions are creating real litigation risk and financial liability,” Sheppard Mullin partner James Pugh, a lawyer representing HMC Capital, told the council at the meeting where the vote was held.

Pugh said the city council's decision indicated it was giving in to “mob rule.”

The city council directed staff to come back on March 4 with a report on how and whether the city could thread the needle of avoiding litigation and stopping new data center projects. The city will look at options including potential zoning regulations and drafting a ballot measure that would prohibit data centers throughout the city and could expand residential options in the Saturn Street area.

The Los Angeles area has only a handful of new data centers in the works despite being the home to Downtown LA's One Wilshire, a major communications hub for the Pacific Rim.

Sites in Monterey Park, Vernon and El Segundo were some of the handful of locations where favorable electricity conditions, such as lower rates or proximity to upgraded infrastructure, made them desirable for data centers.