A proposal to explore a 400-megawatt data center on the old NAVWAR site near Old Town has triggered one of San Diego’s sharper land-use fights in years — and local economists are openly split on whether the political reaction has outrun the facts. Mayor Todd Gloria has signed an executive order directing city staff to advance a temporary moratorium on new data center development within city limits, and the City Council has since agreed to a 45-day pause while officials study the issue.
The controversy began when it emerged that Manchester Financial Group, the developer selected to redevelop the 70.3-acre Naval Base Point Loma Old Town Campus in exchange for building the Navy new facilities, had asked San Diego Community Power about the cost of operating a 400-megawatt data center. Company president Ted Eldredge has stressed that the idea is only one option on the table for roughly 60 acres of private development, alongside talks with universities, hospitals and defense contractors, and says nothing moves forward without an interested user — a list that also includes 8,900 residential units, two hotels and 2.8 million square feet of commercial space in the broader master plan.
In a roundtable of San Diego economists and executives published this week, the verdict tilted toward “overblown.” UC San Diego’s James Hamilton said AI-driven electricity demand deserves a real debate about grid priorities, but “stopping another data center does nothing” to address genuine AI risks like cyberattacks on critical infrastructure. USD’s Norm Miller argued the city should condition any approval on closed-loop cooling and self-generated power rather than dismiss the proposal outright, noting that with San Diego’s high electric rates, a grid-connected operator may not pencil anyway. SDSU’s Ray Major called the NAVWAR site a revitalization opportunity carrying construction, engineering and cyber jobs, while economist Alan Gin and Manpower’s Phil Blair countered that valuable urban land near thriving neighborhoods should go to housing, not warehouses of humming servers.
The concerns are not trivial. Data centers consume enormous volumes of electricity and water, raise noise issues, and — the fear repeated by Councilmember Sean Elo-Rivera — could push residential utility rates higher while the public land serves a private project. San Diego Community Power’s board has already put draft guidelines for integrating large power loads on its agenda, an early signal that the region’s energy planners expect the question to outlast this particular proposal.
What happens next will shape more than one site. San Diego is simultaneously courting AI-adjacent investment and defending household affordability amid some of the nation’s highest electricity prices, and the NAVWAR parcel — federal land whose redevelopment funds new Navy facilities in lieu of cash — adds a public-interest twist no other city faces. The 45-day moratorium buys time, but the underlying choice between powering the digital economy and protecting ratepayers is now formally on the city’s agenda.
