Phoenix Must Defend Data-Center Zoning Rules or Face $54M Takings Claim, Arizona Court Rules

Zoning & Land Use Ruling Issued
Date
October 28, 2026
Added to tracker
November 4, 2026
Court or forum
Maricopa County Superior Court, Arizona
State
Arizona
Property type
Industrial
Amount / scale
$54 million in lost property value claimed
Parties
Plaintiff: West Buckeye Road L.P.Defendant: City of Phoenix

A Texas developer suing Phoenix over data-center zoning won an order forcing the city to justify its ordinance at trial, keeping alive its claim for $54 million in lost property value under Arizona's Proposition 207.

A Maricopa County Superior Court judge ruled that the City of Phoenix must prove at a full evidentiary hearing that its 2025 data-center zoning ordinance is necessary to protect public health, safety, or welfare, or face liability under Arizona's Proposition 207 to developer West Buckeye Road L.P. (WBR). The court dismissed WBR's separate claim that the ordinance's own text created a right to sue for compensation, but let the Proposition 207 claim proceed, with an evidentiary hearing set for November 17, 2026.

Why it matters

The ruling makes Phoenix's permitting regime for data centers a test case for Arizona's Proposition 207, which lets landowners recover the drop in fair market value caused by a land-use law unless the government proves a narrow statutory exemption applies. More than a dozen other landowners have filed similar claims against the same ordinance, so the outcome of WBR's November hearing is likely to shape settlement leverage and litigation strategy for that entire docket, and for any other Prop 207 jurisdiction regulating data centers.

Original source ↗
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A Maricopa County Superior Court judge has ruled that the City of Phoenix must prove its 2025 data-center zoning ordinance is a necessary protection for public health, safety, or welfare -- or pay a Texas-based developer as much as $54 million for the drop in value the ordinance caused to a parcel of industrial land. The order, reported October 28, 2026, narrows but does not end a lawsuit brought by West Buckeye Road L.P. (WBR), and it puts Phoenix's new special-permit regime for data centers squarely inside Arizona's unusual takings statute, Proposition 207, with a full evidentiary hearing already set for November 17.

Case timeline · 3 entries Latest: October 28, 2026 — Maricopa County Superior Court dismisses WBR's ordinance-based claim but lets its Proposition 207 claim proceed

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