In the bustling landscape of downtown Los Angeles, One Wilshire stands out as a significant player in the technological realm, transforming conventional business formats.
This 30-story office building, originally home to traditional corporations like lawyers and telemarketers, now serves a more digital clientele, acting as one of the largest data centers in the U.S.
Companies including Amazon.com Inc., Netflix Inc., and Apple Inc. rely on its extensive infrastructure, which features over 300 strands of fiber transporting online information across the globe.
Every moment of streaming video or social media engagement passes through its walls, highlighting the essential role data centers play in modern connectivity.
As demand for data storage escalates, particularly with the rise of artificial intelligence (AI), existing real estate in Los Angeles faces renewed scrutiny and pressure.
Darren Eades, a Southern California technology and data center real estate expert at Jones Lang LaSalle Inc., noted, “It’s one of the hottest sectors in real estate from the standpoint of everything driven by AI, the cloud and so on.”
This growing necessity for data centers coincides with significant events, like the 2026 World Cup and the 2028 Summer Olympics, putting further strain on the region’s infrastructure.
However, the expansion of data centers has sparked controversy regarding environmental concerns and resource usage.
Data centers’ operations require extensive electricity and water to maintain functionality without overheating, raising questions about sustainability, especially in a state known for its stringent environmental regulations.
Jamie Court, president of Consumer Watchdog, emphasized the dilemma: “The fundamental question is: are we good selling our environmental laws out to Silicon Valley so it can run more data centers?”
Furthermore, California’s energy costs present an additional barrier for data center development.
Southern California holds the highest co-location electricity costs nationwide at 21 cents per kilowatt, compared to the national average of nearly 10 cents.
In contrast, states like Virginia and Texas offer more attractive conditions for data center developers, including available land, lower real estate prices, and cheaper energy.
Eades elaborated on the challenges, stating, “They have a lot more data center demand. A lot of that has been driven by the cost of power and the cost of land and all the legislative red tape in the state of California to get data centers approved.”
Despite higher operational costs, the population density in Southern California ensures a persistent demand for data services, characterizing the region as indispensable for data center operators.
As cities grapple with space allocation, they face a decision on incorporating data centers into their urban fabric.
Eades commented on changing perceptions, noting that while some communities hesitated due to a preference for office and retail developments, the reality of vacant office space opens opportunities for repurposing.
In El Segundo, a city with established industrial roots, the local government is strategically planning for data center developments, recognizing the value these facilities bring while balancing community needs.
Mayor Chris Pimentel shared insights on zoning regulations, highlighting the potential benefits of data centers while acknowledging the challenges surrounding energy consumption and cooling requirements.
El Segundo has previously engaged in innovative solutions for managing heat, such as proposing a project to utilize waste heat from a data center to warm a municipal pool, although Pimentel admitted it posed logistical challenges.
New data center developments are projected to generate significant tax revenue, offering an economic advantage compared to traditional office spaces.
Cities like Vernon are also stepping into the data center sector, with a new three-story facility generating substantial power.
This shift highlights an ongoing conflict where technological advancement weighs against California’s stringent climate policies, as Court aptly remarked, “It’s a battle of tech bros versus California climate laws.”
As the demand for digital infrastructure continues to grow, it catalyzes a broader discussion regarding urban planning, environmental responsibility, and the future of data services within a framework increasingly driven by AI and interconnected technologies.
Moving forward, Southern California’s landscape is bound to evolve, balancing the benefits of economic growth from data centers against the pressing realities of environmental stewardship and energy efficiency.
image source from：labusinessjournal
