‘You’re a liar.’ Why is the world’s largest building built into a wall in California

Bryan Marsh was booed by the crowd as he approached the stage at Monterey Park’s City Hall. Things were not going as planned.

In front of a wall of people holding “No Data Center” placards, he explained how his company, HMC StratCap of Australia, invested tens of millions of dollars and became the largest landowner in the city after years of negotiation, approval and litigation.

City officials had previously embraced their plans to build a new data center and the jobs and tax revenue that would follow, he said, but things suddenly changed.

“There was no widespread opposition,” until late last year, he said as people in the room shouted, “You’re a liar!” Now, in the past few months, the city has faced intense public pressure.

California’s notorious NIMBYs have a new cause. They worry that artificial intelligence-powered data centers will lead to pollution, higher energy bills and more. It’s a growing nationwide movement and it’s hurting California, arguably the birthplace of the AI ​​boom.

It is also one of the reasons why many blue collar jobs are linked to the unprecedented construction of data centers going abroad.

Medhi Paryavi advises governments and companies on data center projects across the country. When he recently made a California proposal to a European manager looking to invest hundreds of millions of dollars, he was quickly dismissed.

“Absolutely not!” The director backfired, said Paryavi, chairman of the Washington DC-based think tank.

Disgust in California is common in the industry. Land is expensive, electricity rates are high and there are too many regulations. Meanwhile, new roadblocks are popping up regularly as citizens of the state speak up to change laws and protest.

Traders with options often choose elsewhere.

“They are looking for cost, time and availability of power,” said Paryavi. California is off the map.

The artificial intelligence revolution may be led by companies from California, but most of the buildings that store the chips — and the jobs that come with building and maintaining them — are in other states.

Technology companies led by Microsoft, Google, Amazon and Meta are expected to spend $710 billion on data center builders this year alone, according to JLL, a real estate investment firm.

Despite big projects, apparently unsatisfied demand and low job rates, the total number of data centers under construction fell last year for the first time in five years, according to CBRE. While construction increased in other areas such as Chicago and the Dallas area, those gains were offset by declines around Silicon Valley, northern Virginia and other areas, CBRE data showed.

Legacy markets such as California and Oregon are expected to lose more than half of their market share, and Texas is set to become the leading data center market within the next three years, according to a report by Bloom Energy, an energy company.

It is estimated that an estimated $98 billion worth of projects were blocked or delayed in the second half of 2025, more than all cancellations since 2023, said Data Center Watch, an organization that tracks opposition to data centers across the US.

In California, some areas such as Vernon have welcomed data center investments, but there is a growing list of residents trying to set up data centers in Imperial County and elsewhere.

Progressive lawmakers Bernie Sanders and Alexandria Ocasio-Cortez recently introduced a bill to stop all new data center construction until government expectations and safeguards are established for workers, the public and the environment.

The proposed data center in Monterey Park – the size of four football fields – is close to homes. It is expected to use three times the energy used by the entire city, which residents say will increase their electricity bills and increase noise and air pollution.

A crowd of more than 200 people gathered at City Hall against the data center. The supporters of this project were only a few people. For hours, one person after another took to the microphone to air their concerns. This agency will destroy the value of goods, AI is taking jobs, big AI is a threat to democracy, it is an “injustice of status”.

Another said: “The tech workers are Epstein’s class. They are not the working class.”

Another said: “Let’s make this city a place where people want to live, where people want to do real things, where they don’t rely on a robot or a program or an app to manage their lives.”

Supporting the data center, and trying to avoid polls about its existence, were only a few people from HMC StratCap and other union representatives wearing orange workers.

They pointed out that the large amount of investment that has been agreed upon, will create jobs and is an incentive for the residents of that city to seek small fruits and at the same time not intend to accept its infrastructure.

“Everyone likes this juice, but they don’t like it when it’s squeezed,” said a member of the labor union in the area. “I am going to fight for my members to find a job that they can work in.”

Frankly, it’s more than just NIMBYism that makes it hard to build in California. Regulations aimed at protecting consumers and the environment make it difficult to get the power that data centers need. Laws also contribute to high rents and building costs.

“There are a lot of regulations, and there is a lot of red tape in the state of California that you have to go through in order to get data centers that are approved,” said JLL real estate agent Darren Eades.

Another example he pointed to is a small release of electrical energy, ie it means that the construction of more than 50 megawatts requires additional documents and a long lead time for approval. Larger data centers these days require 20 times that amount of power.

All of this creates an opportunity for investors to avoid California. As hundreds of billions of dollars are being spent on building data centers, this will lead to jobs in other countries and regions.

“Even as an innovation startup, Silicon Valley is not a hub for delivering AI results and delivering economic results,” said Paryavi.

After a seven-hour hearing, council members cleared a June ballot that allows residents to vote on the ban.

It was a victory for a new group of activists called There is no Monterey Park Information Center, which led a rapid indigenous campaign and worked with the San Gabriel Valley Progressive Action to sign petitions and raise awareness. To complement the Town Hall meetings, activists set up a mahjong room and a Chinese lion dance to attract more Chinese people.

For HMC StratCap the court’s decision marked a major setback. The Australian firm has invested $40 million to acquire a 200,000-square-foot site intended for data centers, as well as a large adjacent site for undisclosed development.

Things fell apart despite assurances that the information center would generate $5 million in annual revenue to fund maintenance of parks, libraries and repairs without raising property taxes.

It must win the election in June or abandon the project. If it has to, it will be forced to sue the city.

“Our preferred approach is not to sue,” HMC’s Marsh said at the hearing. However, we must protect our legal rights.

It now appears that HMC StratCap may be abandoning the project.

A letter from the Australian parent company, dated March 31 and posted on Monterey Park’s official website, says the company has withdrawn its request to build a data center.

The letter referenced new restrictions on data center development in the city and a June vote on the ban.

“These rules are not suitable for data center development,” it said.