Coming to Gilroy, CA the Amazon Data Center
What It Means for Homeowners, the Community, and Property Values
Change is rarely quiet in Silicon Valley's extended orbit, especially when it comes to South Santa Clara County, where everything is always more intimate. As a member of this community and top agent in South County the rhythm of life has long been defined by a certain predictability. The garlic harvest. Summer festivals. Easy weekend drives over the hills.
Every so often, though, a project appears that signals something larger. Not just a change in the landscape, but a shift in how a community evolves. The recently approved Amazon Web Services data center campus in northeast Gilroy is one of those projects.
My name is DeVonna Meyer, and as a top agent, I have spent my career helping families navigate change. Not just the move from one house to another, but the deeper evolution of the communities people choose to call home. As a real estate advisor serving all of South County, I have watched Gilroy mature from a quiet agricultural town into a highly sought-after residential destination.
Now, with Amazon’s 56-acre data center development moving forward, Gilroy stands at another moment of transition. Whether you are a long-time resident, a homeowner evaluating long-term value, or a buyer considering Gilroy for the first time, understanding what this project actually means is important.
This is not an argument for or against development. It is a clear explanation of what is being built, what residents are saying, and what the project may mean for the future of the community.
What Is Actually Being Built
Let’s start with the facts.
The project is an Amazon Data Services campus, part of Amazon Web Services' global cloud infrastructure network. The development will sit on approximately 56 acres in northeast Gilroy, at the southeast end of Arroyo Circle and Camino Arroyo.
If you know the area, it is the undeveloped land east of Highway 101 near the Gilroy Premium Outlets and the Kaiser South County medical offices.
The plan includes:
• Approximately 438,500 square feet of development
• Two single-story data center buildings
• A 2,500 square foot security building
The construction will occur in two phases.
Phase 1 includes a data center building of roughly 218,000 square feet.
Phase 2 adds a second building of similar size.
City officials approved the Architectural and Site Review permit on July 3, 2025, following a multi-year environmental review under the California Environmental Quality Act.
While data centers are often associated with large windowless buildings, the project must comply with Gilroy’s industrial design standards. Those standards address massing, landscaping, and architectural treatment to ensure compatibility with nearby commercial and medical developments.
In other words, the project will be designed to fit the surrounding commercial corridor rather than appear as an industrial intrusion.
The Power Demand and Why It Is Getting Attention
The most widely discussed aspect of the project is its electrical demand.
According to CEQA documentation, each building may require up to 49 megawatts of power.
To put that in perspective, a typical home averages roughly 1 to 2 kilowatts of electrical usage.
Forty-nine megawatts equals 49,000 kilowatts, which means one building alone could draw power equivalent to tens of thousands of homes.
Data centers require enormous power because they house thousands of servers that must run continuously and remain cool at all times.
Amazon has stated that it intends to meet long-term carbon neutrality goals and invest heavily in renewable energy sources. However, the facility will initially connect to existing PG&E transmission infrastructure, which will require upgrades as part of the development.
For residents concerned about grid reliability during heat waves or Public Safety Power Shutoffs, this understandably raises questions.
Will the increased demand affect the local grid?
Could infrastructure upgrades eventually affect utility costs?
These questions have been raised repeatedly during public discussions, and they remain part of the broader conversation around the project.
Backup Power and Generator Concerns
Data centers cannot go offline. Even a brief outage could interrupt services used by thousands of companies.
Because of that requirement, backup power systems are mandatory.
The first phase of the Gilroy facility will include:
• 25 emergency diesel generators, each rated around 2.5 megawatts
• One smaller 600-kilowatt generator for ancillary systems
This level of generator capacity has prompted concerns about air quality, noise, and testing schedules.
However, project approvals also reference the potential development of a Battery Energy Storage System of up to 50 megawatts. This system could eventually reduce reliance on diesel generators.
Battery storage technology is evolving quickly, and the inclusion of this option indicates that long-term backup power solutions may shift toward cleaner technologies.
For many residents, the timeline for implementing battery storage instead of relying solely on diesel generators will be an important issue to watch.
Water Use and Local Debate
If power demand is the headline topic, water use has become the most emotionally charged issue.
According to city documentation, the completed campus could use up to 18 acre-feet of water per year, primarily for cooling systems.
One acre-foot equals roughly 326,000 gallons, meaning the facility could use around 5.9 million gallons annually.
City officials have attempted to contextualize this number by comparing it to residential demand. One estimate suggests the potable water use could be similar to that of about 50 Gilroy homes.
However, some local activists believe the number could be higher and have circulated petitions suggesting water use may approach 7.5 million gallons annually.
The central concern is not just the exact number. It is the broader question of water usage in a drought-prone state.
Residents have asked whether the facility will eventually rely on recycled water systems rather than potable water. Clarifying how the cooling systems will evolve over time remains an important topic of discussion.
The Environmental Review Process
Like all major projects of this scale in California, the development went through the California Environmental Quality Act (CEQA) review process.
A Notice of Preparation was filed in 2022, followed by environmental documentation that is publicly available through the state CEQAnet system.
Some critics have questioned whether the CEQA process is truly independent because developers fund environmental studies. However, those studies are reviewed by consultants working for the city, and final approval authority rests with local government officials.
The project ultimately received approval from the city’s Community Development Department after completing the environmental review process.
Still, the controversy surrounding this project has prompted discussions among city leaders about whether future data center proposals should require additional public review or revised zoning considerations.
The Economic Perspective
Supporters of the project highlight several economic benefits.
Large commercial developments generate property tax revenue, which helps fund public services, schools, and infrastructure.
Construction also creates temporary local employment opportunities.
Longer term, having an Amazon Web Services facility within city limits places Gilroy within the broader technology infrastructure network of Silicon Valley.
The site itself sits within an established commercial corridor near the Premium Outlets and Kaiser medical facilities, which means the land is already designated for employment-oriented uses.
Critics argue that data centers are land-intensive but job-light, meaning they may not generate as many permanent jobs as other commercial developments might.
That leads to a broader planning question: is this the highest and best use of a freeway-adjacent commercial parcel?
Reasonable people can disagree on that point.
The Artificial Intelligence Conversation
Another layer of discussion around the project involves artificial intelligence.
Some community activists have framed the project as part of the rapidly expanding AI infrastructure that powers modern computing systems.
AI models require significant computing capacity, and data centers are the physical infrastructure that makes those systems possible.
Whether the Gilroy facility will primarily support AI workloads or traditional cloud services is not entirely clear. However, the broader conversation reflects a growing awareness that digital technologies rely on very real physical infrastructure.
Gilroy is now part of that conversation.
What This Means for Homeowners and Property Values
For many residents, the most practical question is simple.
How does this affect my home?
The answer depends heavily on location and perception.
Data centers generally operate quietly and produce little traffic compared to other industrial uses. In many communities, nearby property values show little long-term impact.
Homes closest to the site near the outlet corridor will likely feel the effects most directly. That impact could be neutral or mixed depending on factors such as noise mitigation, landscaping, and visual design.
For the broader Gilroy housing market, the data center will likely be one variable among many.
Gilroy continues to attract buyers because of:
• Larger homes and lot sizes
• Relative affordability compared to San Jose
• Strong community identity
• Access to Silicon Valley job centers
For many buyers, the presence of a major technology company nearby may even signal long-term economic stability.
Higher-end luxury buyers sometimes evaluate community character more closely, so perceptions about industrial development can matter in that segment. How the facility is managed and integrated into the community will shape those perceptions over time.
Looking Forward as a Community
The project is approved and moving forward.
The most important question now is how well it is implemented and managed.
Community engagement remains important. Residents who ask thoughtful questions about water use, generator testing schedules, and energy infrastructure help ensure transparency and accountability.
For homeowners, the most productive approach is understanding the facts rather than reacting to speculation.
Gilroy has always evolved. From agriculture to retail growth to its role today as a residential hub for Silicon Valley professionals.
This project adds another layer to that story.
Final Thoughts
The Amazon data center coming to Gilroy represents both opportunity and uncertainty.
It brings investment, tax revenue, and a new role for Gilroy in the global technology ecosystem. At the same time, it raises valid questions about energy use, water resources, and community identity.
For homeowners, the key is perspective.
The qualities that have drawn families to Gilroy for decades remain unchanged. Space, community, accessibility, and a grounded way of life that still feels increasingly rare in Silicon Valley.
The garlic still grows. The hills still turn green every spring. The sense of community that defines South County is still very much alive.
But like every Bay Area community, Gilroy continues to adapt.
Understanding that change is the first step toward navigating it wisely.
If you are considering buying or selling in Gilroy and want to understand how this project fits into the broader real estate picture, I am always happy to help provide clarity.
Local Realtor® Contact Information
DeVonna Meyer Realtor
eXp Realty
16433 Monterey Rd Suite 120
Morgan Hill, CA 95037
Phone: 408-981-4079
Website: https://devonnameyer.com
