Efficiency study recommends Redding as ‘Data Center Hub’

Circle 6 Consulting has completed Redding’s efficiency study, and it’s recommending, among other suggestions, that the city position itself as a “Northern California Data Center Hub.”

Doing so would capture “growing West Coast demand for AI, cloud, and high-density computing infrastructure,” the consulting firm says, and could attract hundreds of millions of dollars in private capital investment. 

That’s no small number for a city that’s been facing significant budget challenges over the last two years. Those challenges are part of what motivated the Redding City Council this past spring to approve spending up to $300,000 at the request of late City Manager William Tarbox to hire consulting firm Circle 6 to analyze the city’s finances and find areas to save costs. 

Staff with Circle 6 are scheduled to present the study’s findings at Tuesday’s city council meeting. Council members are not expected to take any action at the meeting aside from receiving the presentation, according to the agenda. 

Circle 6’s slides explain that if the city council decides to move toward developing a data center, it could be operational within three years and provide beyond $750 million in “potential private capital investment,” depending on the scale of the project. The data center could also generate millions more in annual funding through property tax value, utility revenue and economic activity, the slides say.

Circle 6 suggests that the data center could potentially be built on land in Stillwater Business Park, an industrial park located not far from the Redding airport. The city recently received a $7.9 million grant to make improvements to the park, which includes extending a portion to open road access to additional parcels for future development. 

Implementing a data center in the city, Circle 6 says, would create “an opportunity to diversify the local economy with high-value private investment, long-term tax base growth, and technology-sector visibility.” 

Data centers have sparked intense public scrutiny both locally and nationally over concerns about draining local water resources, raising utility bills and straining electrical grids. This past summer, after the city of Mount Shasta received an inquiry from a group interested in building a data center, there was significant public concern, and city staff and officials received threats over the project.

If the council chooses to develop a data center, it would likely face public pushback and could potentially be met with legal action, a growing route used by residents to combat data centers. 

In recommending a data center project, the consultant’s work extends beyond what it was originally contracted to do, which was described in a March staff report as “increasing efficiency and accountability while decreasing waste.”

What else is included in Circle 6’s presentation? 

The 83-slide jargon-heavy presentation by Circle 6 starts with an overview of the four phases of the study. It quickly makes clear that the firm isn’t recommending across-the-board layoffs as a solution to the city’s financial woes, instead focusing on areas where the city could cut costs and earn new revenue. 

In addition to the data center recommendation, the consulting firm is recommending Redding position itself as a “strategic Northern California fiber aggregation and digital infrastructure hub,” saying the city could leverage infrastructure through Redding Electric Utility as a way to support economic development. Doing so could generate tens of millions of dollars, according to the slides, which don’t clearly define what such a hub would entail. 

Circle 6 is also recommending that Redding establish an Enhanced Infrastructure Financing District for the area around the Oasis Road and I-5 interchange, saying doing so “unlocks the next major growth corridor.” The presentation slides explain that developing this economic project could enable an estimated $1.5 billion in “future buildout assessed value.” 

Another recommendation is for Redding to shift its fire department dispatch from SHASCOM to CAL FIRE/Redding Emergency Command Center because CAL FIRE charges cheaper dispatch rates. The change could save hundreds of thousands of dollars, Circle 6 says.

The study also addressed what it called the “elephant in the room”: fire department overtime. The slides explain that overtime expenses are high relative to base pay, showing that labor costs in fiscal year 2025 were around $10.9 million, with overtime being $4.65 million.

According to the study, savings could also be achieved through changes to the city’s use of fire engines. The fire department currently uses two fire engines from the Office of Emergency Services, which allows OES to direct RFD to deploy the engines without reimbursing the department for equipment use. Circle 6 is recommending that the city return the engines to OES and purchase replacement engines for RFD, which cost around $750,000 each and could be paid for by fire impact fees. RFD deploying its own engines could generate more than $1 million annually, the slides say. 

A controversial first responder fee could also make a comeback. Circle 6 acknowledged that the fee received public pushback before it was rescinded in August of 2025, and is recommending that an alternative fee be proposed that would omit fees for lift assists. The slides explain that a fee of $250 could produce $300,000 annually. 

The firm also gives ideas for cost savings related to pensions and personnel vacancies, among other areas of proposed savings.

Circle 6 staff will present the study’s findings on Sept. 15 at 6 p.m. in the Redding City Council Chambers. The slides for the study can be found here. 

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