Developers are pulling the plug on a planned data center in Los Angeles County in the face of stiff opposition, a case of local resistance overcoming growing demand.
Digico Infrastructure REIT and HMC Capital’s StratCap have withdrawn an application for a 49.5-megawatt data center at 1977 Saturn St. in Monterey Park, a city of about 60,000 people roughly 8 miles east of downtown Los Angeles.
The move effectively ends one of the San Gabriel Valley’s most closely watched redevelopment proposals.
It comes as policymakers from Congress to statehouses in places like Maine, Georgia and New York explore moratoriums or tighter controls on data center development even as demand tied to artificial intelligence continues to surge.
Data center projects totaling about $64 billion were blocked or delayed amid local opposition between May 2024 and March 2025, according to a report from nonprofit Data Center Watch.
In response to the pushback in Monterey Park, officials implemented a temporary moratorium on data center projects and are moving forward with a ballot measure that would make the ban permanent.
“This didn’t happen overnight. Residents showed up, spoke out, and made it clear they wanted a say in what happens in our city," Monterey Park Mayor Elizabeth Yang posted on social media. "As a Council, we put a moratorium in place and moved forward with a ballot measure so the community could decide. That was always the goal."
Developers Digico Infrastructure REIT and HMC Capital’s StratCap confirmed they won’t contest the June ballot measure.
Monterey Park vs. Vernon
In Monterey Park, opposition to the project built steadily over months as residents raised concerns about environmental impacts, noise and the long-term use of scarce industrial land.
The abandoned proposal centered on a 16-acre site at 1977 and 1980 Saturn St., where StratCap had planned to convert two vacant office buildings into a modern data center. HMC Capital, an Australian asset manager, acquired the property in December 2024 for $39 million with plans to reposition it for digital infrastructure.
Instead, the ownership group is now pivoting toward uses more aligned with local priorities. In a letter to city officials, interim CEO Chris Maher said the firm will work with Monterey Park to “establish productive land uses for the property that are supported by the broader community.”
City leaders have signaled that housing and other community-serving uses could take precedence. The mayor said officials are exploring updates to the city’s Housing Element and broader land-use plans, with potential changes headed to voters as soon as November.
The outcome highlights a tension shaping the Los Angeles region, where investors are eager to tap into one of the nation’s largest concentrations of data demand while navigating a patchwork of local politics. Even as some cities push back, others are leaning in, offering power capacity and industrial zoning that make them attractive alternatives for developers.
The city of Vernon, about 4 miles southeast of downtown Los Angeles, has emerged as one of the region’s most active hubs thanks to its independent power supply and industrial base. The small city has become a magnet for large-scale digital infrastructure projects.
A 50-megawatt facility developed by Prime Data Centers at 4701 S. Santa Fe Ave. was fully leased before construction was complete, underscoring the depth of tenant demand. Meanwhile, Sydney-based Goodman Group recently broke ground on its first project in the city, Goodman LAX01 Vernon, another 50-megawatt campus.
National pushback
Policymakers across the nation are grappling with how to regulate a wave of data center development driven by the need to support artificial intelligence and cloud computing.
In Maine, lawmakers are considering legislation that would significantly tighten oversight of large data centers, potentially placing the state at the forefront of national regulatory efforts. Despite having just nine facilities, the state is moving proactively as concerns mount about energy use and infrastructure strain.
At the federal level, Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders have introduced the Artificial Intelligence Data Center Moratorium Act, which would pause new construction until national safeguards are in place. The proposal reflects growing scrutiny over how the industry affects workers, consumers and the environment.
States including Georgia and New York are weighing their own restrictions, with proposals ranging from temporary permitting bans to expanded regulatory oversight. These efforts come as utilities and grid operators warn of rising electricity demand tied to AI-driven computing.
Industry advocates argue that such measures risk slowing critical infrastructure needed to support economic growth and technological advancement. They contend that without new capacity, regions could fall behind in attracting high-value industries.
The debate is increasingly shaping where and how data centers get built, with developers seeking jurisdictions that balance regulatory certainty with access to power and connectivity. That dynamic is playing out in real time across Southern California.