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Data center community benefit agency ordinance

At a glance

Based on auto-generated captions; names and details may be misheard.

  • What: an ordinance (Ordinance 5989) creating a framework for a nonprofit community benefit agency, approved by the state, to receive and distribute negotiated data center community benefit payments.
  • Where it stands: added to the 10/20/2026 council agenda and passed first reading on the consent agenda, with no opposing votes.
  • Next: two more readings (the next meeting is November 10); it needs state authorization. Council also held a separate data center ordinance (5985) in hopes of joining it with this proposal.

What it does

  • Creates the legal structure for an agency, like an airport authority, with a board that receives and distributes data center funds and reports annually to the council.
  • Funds would come from contracts setting a payment per kilowatt-hour for about 10 years, in exchange for faster permit help, rather than from property taxes.
  • Eligible uses include neighborhood revitalization, workforce development, apprenticeships, small business development, youth programs, housing stability, environmental monitoring and education, public health education and public safety capacity.
  • Ends with a letter asking the Tennessee legislature for authority; the sponsor cited estimates of $120 million to $980 million a year within 10 years.

Discussion

  • The sponsor said the city cannot tax data centers for this and a direct contract would count as a tax under the state constitution; the ordinance is about a lawful route.
  • Logan asked why not negotiate agreements as the city did with property tax revenue; Warren answered that existing allocations come from tax money already owed.
  • Another councilmember asked about hold versus pass; the council attorney recommended sending it down tonight with first reading and substituting a competing item next meeting if it works.
  • The sponsor invited all members to co-sponsor.

Early discussion (10/8/2026)

  • At the first Planning & Zoning hearing, Warren asked for enabling legislation to take to Nashville that would let the city collect money from data centers for a community benefit agency, kept separate from the regulations. Alan Wade said it would need state approval and pointed to the airport authority as a model. Spinosa said community benefits is the topic of a later hearing.

Council action

  • Add-on item 38, requested for first reading at the full council; sponsored by Warren. It was taken with the consent agenda (with Ordinances 5987 and 5988) on a motion by Vice Chair Carlisle seconded by Warren; all members voting said yes.
  • Spinosa said he was holding Ordinance 5985 so it could be combined with this community benefit approach.

Sources

Discussion time

About 23 minutes across 3 meetings (from transcript timestamps; approximate).

Meeting Minutes
2026-10-20 - Memphis City Council 1
2026-10-20 - City Council Committees 16
2026-10-08 - Planning & Zoning (2) 6

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