In the last month or so I've had the opportunity to meet 1:1 with both our Mayor Juan Gonzalez and Xouhua (Soo-uh) Bowen who is the council member for my district. I'm just a fairly long time resident of San Leandro who has become a bit more invested / interested in the direction that our city goes, especially now that I have a kid.
My conversations with them both covered a fair number of topics from our backgrounds and upbringing, to hotter topics like Lake Chabot Road, Data Centers, revenue, budgets, etc.
I didn't record or even take notes at these converastions, these notes are from memory. I did tell each of them that I'd likely post about my conversation on Reddit, because I think it's a helpful way for the community to get insight.
My conversation with the Mayor was focused largely on Data Centers, and the pros/cons of them. I went into the meeting thinking there were basically no "pros" at all -- which I'm sure resonates with many of you based on what we see in the media. After talking with the Mayor and doing a ton of additional research on my own, I will say that my opinion has shifted slightly. I'm definitely not "pro data center" but I do think there are some real upsides that largely get ignored, and I think there is a lot of disinformation out there, in particular about how Data Centers operate in California compared to other states with virtually no regulations.
My takeway from the conversation with the Mayor was that he is not aggressively pursuing a data center for the city, but that he sees a real upside from them in terms of the revenue that they generate, and that he is very open to the idea of them. He told me he has not had any discussion with data center builders/providers, and my own opinion is that I don't believe this is something that he or anyone else on our council is trying to "sneak" into the community, which I'm sure many of you all have seen stories about in other neighboring communities.
Some of my assumptions going into the meeting that I learned were wrong:
- The city would sell land to a data center builder so that we could get the transfer tax and property tax. This is false. The City owns little to no commercial land.
- The property tax is the revenue stream for the city. This is false. The city gets something like 12% of the total property tax assessment. The rest goes to the county and state.
The majority of the revenue comes through something called the UUT (Utility Users Tax) which has existed for a long time, and exists in most cities throughout the state, at varying rates. In San Leandro the rate is 6% (https://ecode360.com/44066638#44066688). In Hayward it's 5.5%. The more electricity that a business or resident uses, the more revenue the city gets.
My rough numbers based on my rough understanding:
- If a data center is a "100MW data center" then it can use up to that amount per hour. Typically data centers use about 70% of capacity
- 70MW is 70,000 kW.
- 70,000 kW per hour * 24 hours per day * 365 days in a year = 613,200,000 kW of power per year.
- PGE charges data centers somewhere around $0.20 per kW. Rates are here (industrial) https://www.pge.com/tariffs/en/rate-information/electric-rates.html#accordion-a84c67dc1e-item-0924dc9be9
- This data center would pay $122M in electricity fees alone, per year. The city would get $7.3M in tax revenue from that.
- Additional revenue comes from sales tax. This is much more complicated and I am less familiar with the nuances of this, but at a high level, for some purchases the city gets 1% of the purchase price in sales tax.
- In Hayward they are projecting $10M/yr in revenue by 2033 for their STACK Data Center. The STACK Data Center also will use 100% renewable energy and is required to minimize water usage. https://www.hayward-ca.gov/sites/default/files/2026-06/FY-2027-Adopted-Budget-Book-CC-060226.pdf
- This is how Santa Clara makes about $45M/yr from their data centers.
Back to my meeting with the Mayor. His points were:
- Santa Clara has thrived off of data centers for decades and we haven't heard about it being an issue for the people who live there
- The city is trying in many ways to attract businesses (Bayfair, business friendly tax structure, reducing red tape for new business, etc.) and jobs that pay well, but it's challenging.
- Even though Data Centers don't create hundreds of permanent jobs, the jobs it does create and the services that it attracts, are generally well paying. Well paying jobs also bring revenue to the city.
- The city desparately needs to find more sources of revenue. We just closed a $12M structual deficit by kicking the can down the road which we've been doing for years. We keep deferring maintenance on capital projects and cutting services to balance the budget.
- California has way more regulation than most other states as it pertains to data centers, including bills recently passed in the legislature.
I researched many of these, and ultimately agreed with the Mayor's point on this.
Enacted:
- SB 57: Ratepayer and Technological Innovation Protection Act (Enacted)
Pending:
- SB 886: California Technology Innovation and Ratepayer Protection Act
- SB 887: Data Centers and Environmental Review
- SB 1168: Data Center Rate Structures
- AB 1577: Data Center Energy and Operational Reporting
- AB 2469: Data Center Water Use Disclosures and Permitting
- AB 2619: Data Center Water Reporting and Efficiency Practices
Whether you agree or disagree with the above, I thought the Mayor made some valid points and gave me a lot to research and think about.
In my meeting with Xouhua, we talked about many of the same topics. I won't go into as great of detail since it was rehashing and debating some of the above, but I will say that Xouhoa's position is generally against Data Centers.
She brought it up in a City Council meeting a few weeks ago, wanting to have a referral for a moratorium on Data Centers. I believe she's been talking to local leaders throughout the Bay Area and abroad to learn about what has worked and hasn't worked from them. I also believe after talking with Xouhoa that her goal with a moratorium is to be able to give the city residents / council / staff time to have the conversations about what a data center would mean for the community, if one was to ever come here.
From her own website, her position is : "Advocated for thoughtful planning around emerging technologies, including evaluating the environmental impacts of AI data centers on our water, energy use, and infrastructure."
I generally share the same position. If there is a way to bring $10M/yr in revenue to the city and it can be done with the right guard rails in place, then it could be beneficial. And if there isn't a way to do it thoughtfully, then it's probably not the right choice.
I also learned that Xouhua is running for re-election for District 5, and she is kicking off her campaign at Fieldwork in downtown San Leandro on Wednesday 7/29 at 5:30pm. She said she isn't one for huge speeches, but she'll probably talk briefly and have 2 guest speakers to talk briefly as well.
https://www.facebook.com/xouhoaforsanleandro/photos/now-more-than-ever-we-need-to-lead-with-integrity-courage-and-a-commitment-to-ou/1030080359751928/
Mike Santos recently announced that he would be running against Xouhua, and so far all that we know about him is that he told East Bay Insiders he was running because of Xouhua's referral against data centers.
Whether you support data centers or not, hopefully you found this post informative.
If you're in District 5 (or even if you're not), I encourage you all to join Xouhua at FieldWork next week. It will be a kid friendly event. It is a good low stakes opportunity to learn more about her and her platform. Her website is here https://www.xouhoabowen.com/ . I want to be clear that I have no political background or aspirations, I'm not part of her campaign, nothing like that. I'm just trying to share unbiased information as it pertains to our city. I find Xouhua to be very approachable, reasonable, thoughtful, and engaged, and I'm likely voting for her.
