Petersburg planning commission recommends one-year data center moratorium; developer threatens suit

The Petersburg Borough Planning Commission voted 4-3 Tuesday to recommend a one-year pause on data center permits, and the developer behind the only project on the table threatened to sue.

What is proposed is small. Andrew Mazzella of Mazzella Alaska and the California firm Greensparc want to put a micro-scale artificial intelligence data center in roughly 1,500 square feet of the former Ocean Beauty cannery, a 65,000-square-foot building, about 2 percent of it. It would run on the 2-megawatt transformer that powered the cannery until it closed in 2016 and has sat idle since, starting at one megawatt and scaling up.

The borough's own information sheet lays out why anyone wants it. A 2-megawatt customer drawing power around the clock, unlike homes and shops whose demand rises and falls, could cut a typical residential bill from a projected $427 a month to $362 over ten years.

Heather Fine-Walsh moved to ask the Assembly to pause land use applications and building permits for data centers in Service Area 1 so that standards specific to the use can be written. The pause would expire in a year unless the Assembly repeals or extends it. She described it as guardrails rather than a ban, citing power, water and noise, and said the grid has room for only one data center. If one is approved before rules exist, she said, "that's game over."

Mazzella objected during public comment, arguing the commission had no jurisdiction because the borough missed a 15-day notice deadline and never mailed notice to property owners within 600 feet. He warned of immediate litigation, restraining orders and regulatory takings claims. Staff said those notice rules apply to ordinances rather than recommendations, and that any ordinance would return for a noticed hearing.

Tom Kowalski backed the motion, citing the borough's lack of any data center code. Joshua Adams called a blanket moratorium self-defeating. Jim Floyd said he understood the Mazzella project to be already underway and saw the moratorium as a safeguard for future development. Chair Chris Frye preferred inviting interested companies to help draft the standards.

Whether the project is far enough along to matter is disputed. Tara Favilla, president of Mazzella Alaska, said the building permit application went in Aug. 10, with fire marshal approval following. Fine-Walsh said she had been told it was still in progress. Staff said vested rights require a complete, reviewed application and an issued permit, and the borough's April information sheet said no application or plans had been received at that point.

Mazzella tied the timing to chip supply. "A year from now, this is off the table," he said. "It'll, it'll never happen."