Digital Realty has filed plans with the Seattle City Council to build a new data center in the heart of the city, as reported by BizJournal and others, targeting a site at 301 Virginia Street and 1930 3rd Avenue that was once home to a Bed Bath & Beyond retail store.

The filing comes at a particularly fraught moment, as Seattle officials are simultaneously moving to impose a one-year moratorium on new data center developments in the city.

The Proposed Development

The plans call for demolishing the existing retail building and parking garage on the 58,000-square-foot site and replacing them with a six-story data center.

In addition to the core data center function, the facility would also include an R&D lab, office space, and retail space.

Demolition and construction could begin as early as 2027. Digital Realty has been clear about the intended purpose of the facility.

That distinction is notable given the intense scrutiny currently surrounding large-scale, power-hungry AI infrastructure projects that have drawn the attention of city officials across the country.

The site has passed through several identities in recent years. After operating as a Bed Bath & Beyond until around 2018, the building is currently occupied by Cannonball Arts, a contemporary art and music venue operated by the producers of the Bumbershoot festival.

The property is owned by real estate firm Clise Properties, which confirmed Digital Realty's interest in the site while cautioning that any deal remains in its earliest stages.

"Digital Realty has expressed interest in the property, and they are independently conducting due diligence to fully understand the site's viability to meet their future development needs.

This is the beginning of what can be a very long process," a Clise spokesperson said.

Digital Realty's Existing Seattle Footprint

Digital Realty is not new to Seattle. The company already operates the SEA10 carrier hotel at 2001 Sixth Avenue, also known as the Westin Building.

The 34-story structure offers 400,400 square feet of space and 13 megawatts of colocation capacity. The building was originally constructed in 1981 to house the corporate offices of Westin Hotels.

Digital Realty has a long history with the property.

The company was a minority owner for years alongside Clise Properties before taking a majority stake in the building in late 2020. The planned Virginia Street facility would represent Digital Realty's second data center location in the city.

Seattle's Push for a Moratorium

The timing of Digital Realty's filing is complicated by political developments at Seattle City Hall. The city council's land use and sustainability committee voted unanimously this week to recommend a one-year moratorium on new data center developments, along with an accompanying resolution.

A full council vote on both measures is expected the following week.

The moratorium push was initiated earlier this year by Mayor Katie Wilson after four companies, said to include Prologis, Equinix, and Sabey, approached Seattle City Light about plans to build five large-scale data centers in the Seattle area, collectively totaling 389 megawatts of power demand.

Two of those projects have since reportedly been withdrawn. Seattle currently has approximately 30 data center facilities operating within the city.

The scale of the proposed developments that prompted the moratorium discussion reflects a broader national trend of surging data center demand, particularly as the buildout of artificial intelligence infrastructure accelerates across the United States.

Regulatory Uncertainty for Projects Already in Process

Whether Digital Realty's Virginia Street project could proceed if the moratorium is adopted remains an open question. Because Digital Realty has already initiated the planning and filing process, it is unclear whether the project would be grandfathered in or subjected to the same restrictions that would apply to new applications submitted after the moratorium takes effect.

City officials have not publicly addressed how projects already in the pipeline would be handled under the proposed ban.

The situation underscores a tension playing out in cities across the country, where local governments are grappling with how to accommodate surging demand for data center infrastructure while managing concerns about power consumption, land use, and the displacement of other commercial and community uses.

In Seattle's case, the potential loss of an active arts venue adds a cultural dimension to the debate.

For Digital Realty, the Seattle filing represents an effort to expand its network-dense colocation footprint in the Pacific Northwest market, independent of the AI-driven hyperscale expansion that has dominated industry headlines.

Whether city regulators will allow that expansion to move forward will depend on how the moratorium vote unfolds and how officials interpret the rules for projects already in motion.