This week’s Zoning In highlights just how quickly the regulatory landscape around data centers is changing. California enacted a sweeping seven-bill package covering environmental review, energy, water, utility costs and land use, with Mayer Brown providing an excellent analysis of what the new laws mean for the industry.
Virginia also introduced a new Data Center Accountability Framework, while new moratoriums and restrictions advanced in communities across Iowa, Wisconsin, Colorado and Kentucky.
Microsoft goes quiet after church groups ask for 1% of data center costs
A coalition of churches and community organizations in northern Indiana is pressing Microsoft to negotiate a binding “Fair Share Agreement” tied to its planned $1 billion Granger data center. We Make Indiana argues that Microsoft’s one-time nonprofit grants do not match the project’s scale or the tax incentives it receives and is seeking ongoing funding for community priorities, along with commitments covering water, energy, sustainability and decommissioning. The group is now organizing residents and looking to use future tax-incentive negotiations as leverage to bring Microsoft to the table, underscoring growing pressure for community benefits to be negotiated rather than determined solely by developers.
A Kentucky county becomes first in state to permanently ban data center construction
Woodford County has become the first county in Kentucky to permanently ban new data center construction, moving beyond the temporary moratoriums increasingly adopted elsewhere in the state. Officials said the unanimous decision was driven by strong resident opposition and a desire to protect the county’s limited farmland, agriculture and rural character, despite no specific data center currently being proposed there. The move represents a significant escalation in local resistance, with the county choosing to prohibit projects proactively rather than develop regulations governing them.
Mayer Brown attorneys provide comprehensive analysis of California’s sweeping new data center laws. The seven-bill package significantly expands requirements surrounding environmental review, energy and water disclosures, utility costs, ratepayer protections and land use. Among the most consequential provisions, data centers will face mandatory CEQA review, expanded water and energy reporting, and requirements to bear infrastructure costs associated with their operations. Certain projects seeking expedited environmental review must also enter into enforceable community benefits agreements—another indication that community engagement is becoming increasingly embedded in the data center development and permitting process.
Grayson County, VA man pays nearly $2,600 in records request fight over data center project
A Virginia resident paid nearly $2,600 for public records related to the secretive “Project Lightning” after struggling to obtain information about the proposed data center. Records ultimately confirmed the project has been under development since at least last year and is planned for Wildwood Commerce Park, although the company behind it has not been publicly identified. The controversy illustrates how secrecy surrounding early-stage projects can itself become a catalyst for community scrutiny and opposition.
Students and community activists in Champaign County, Illinois, rallied against new AI data centers as officials work on an ordinance governing future development. The county currently has a 12-month moratorium in place through April 2027, while a task force considers zoning restrictions and requirements including a decommissioning bond. Organizers, who have been regularly attending task force meetings, are pushing for stricter protections around water and environmental impacts, demonstrating how organized opposition groups are becoming increasingly involved in shaping local data center regulations.
Pennsylvania Residents Are Turning Down $10,000 Checks to Block an AI Data Center
NorthPoint Development’s offer of $10,000 to eligible Hazle Township households has not quieted opposition to its proposed 1,300-acre Project Hazelnut data center campus. The payments are part of a broader $165 million community benefits package, but residents cited concerns about noise, property values, water and energy use, with some characterizing the direct payments as an attempt to buy support. The controversy reinforces a growing challenge for developers: even substantial financial benefits may not overcome community resistance when residents feel their underlying concerns have not been adequately addressed.
Data centers are reshaping Tennessee communities — here’s what experts want you to know
A panel of Nashville-area researchers said the rapid growth of AI data centers is intensifying community concerns over electricity, water, noise and environmental impacts, with Memphis cited as a cautionary example of development without sufficient public involvement. The researchers said communities are increasingly demanding transparency, stronger environmental standards and accountability before projects move forward, emphasizing that meaningful engagement is becoming essential as data center development expands across Tennessee.
Clearer rules needed to ease data center construction concerns: BDx Data Centers CEO
BDx Data Centers CEO Mayank Srivastava argues that clearer regulations could help address growing community concerns surrounding data center development. He said some opposition stems from misinformation as well as concerns that infrastructure costs are being shifted onto communities, arguing that companies requiring additional resources should bear those costs rather than local residents and ratepayers.
Madison weighs where data centers could be allowed
With Madison’s year-long data center moratorium approaching its January expiration, city officials are developing zoning rules that would restrict larger facilities primarily to industrial areas and establish requirements addressing noise, equipment screening and proximity to other data centers. Officials are also considering dedicated substations for large projects, with draft regulations potentially reaching the City Council in November. If regulations are not completed before the current moratorium expires, the city could extend the pause.
Commission Endorses Milwaukee Data Center Moratorium After Fiery Hearing
Milwaukee’s City Plan Commission endorsed a proposed one-year moratorium on new data centers following extensive public debate over energy and water use, noise, design and neighborhood impacts. Supporters characterized the measure as a temporary pause allowing the city to establish clearer zoning standards, while opponents argued that officials should instead move directly toward predictable regulations. The debate also highlighted concerns that existing industrial zoning could concentrate future development impacts in predominantly Black and Brown neighborhoods.
In Town Hall, Clevelanders Ask Council to Extend Ban on Hyperscale Data Centers
Cleveland residents urged City Council to extend its temporary ban on hyperscale data centers during a public listening session ahead of the moratorium’s October 20 expiration. Concerns centered on electricity demand, Lake Erie water use, noise, tax incentives and the long-term value of large facilities, while city officials stressed that they are still gathering public input. The debate comes as data center opposition spreads across Ohio, with 18 cities reportedly facing data center-related ballot measures this November.
Mesa County Commissioners approve data center moratorium
Mesa County, Colorado, commissioners unanimously approved a one-year moratorium on new data center applications in unincorporated areas following substantial community opposition. Officials cited unanswered questions surrounding water availability and energy supply and said the pause will provide time to research potential impacts and determine whether—and under what conditions—data centers should be permitted. The moratorium took effect September 29.
Weld County, CO group collecting petition signatures to block Global AI data center
Opponents of Global AI’s approved data center near Windsor, Colorado, are seeking enough signatures to force a referendum that could overturn the project’s approval, while a second ballot initiative would require voter approval for future data centers in Weld County. The campaign follows months of opposition focused on water, energy and noise and demonstrates how organized resistance is increasingly moving beyond public hearings to ballot initiatives aimed at giving residents direct authority over data center development.
Data Center Town Hall Draws Nearly 250
Nearly 250 residents attended a Blair County, Pennsylvania, town hall focused on data centers as nearby Taylor Township prepares to consider new development regulations. State lawmakers emphasized the importance of understanding site-specific impacts—including water, power, noise, infrastructure and environmental effects—and determining which developer promises are legally enforceable. Community Benefit Agreements were also highlighted as a tool for securing tangible local benefits, reflecting growing interest among communities in establishing protections and negotiating commitments before projects move forward. Pasted text Pasted text
Putnam County, West Virginia, adopted a resolution calling for hyperscale data centers to bear the full cost of necessary water, sewer and power upgrades while also meeting standards for water protection, noise, lighting and landscaping. The measure followed sustained resident engagement after Google announced plans for a data center in Buffalo and states that projects should be evaluated on more than their financial benefits, with affected communities having input into development and how resulting tax revenues are used.
Supervisors Unanimously Approve 12-Month Data Center Moratorium After Public Hearing
Winneshiek County, Iowa, unanimously approved a 12-month moratorium on data center development while officials conduct a land-use study and consider new zoning regulations. The action followed overwhelming public support for a pause and concerns over electricity, water, noise, emergency response, waste and land use. Officials said existing industrial zoning does not adequately address data centers and that the county needs time to establish appropriate “guardrails, rules and regulations.”
Virginia bans data center NDAs as part of new digital infrastructure framework
Virginia has introduced a sweeping Data Center Accountability Framework that includes a ban on non-disclosure agreements for data center projects, a review of diesel backup generators, accelerated development of noise regulations and a new community engagement and planning toolkit for local governments. The initiative represents a significant push toward greater transparency in the world’s largest data center market and comes as several Virginia counties impose their own restrictions on new development.
Complaints escalate over data center construction in Phoenix
Community tensions surrounding Phoenix’s massive Menlo Digital data center have escalated as nearby residents accuse the city of inadequately enforcing construction-hour and noise restrictions. Residents have documented alleged early-morning construction and raised broader concerns over noise, dust, lighting, water and wastewater, while complaints have now reached county regulators and the Arizona Attorney General’s office. The dispute highlights how community relations challenges can continue—and intensify—well after a project receives approval and enters construction.
Protesters Crash Pro-Data Center Party, Escorted Out by Security
A pro-data center event in Washington, D.C., was repeatedly interrupted by protesters as the national debate surrounding AI infrastructure continues to intensify. The event was organized to push back against growing bipartisan opposition to data centers, while protesters cited concerns including electricity costs and community impacts. Though written from a strongly critical perspective, the article illustrates how the data center debate is increasingly moving beyond individual development proposals and becoming part of a broader national political and cultural conversation.
Residents in Sahuarita, Arizona, are organizing against the proposed 160-acre, eight-building Project Gravel data center, raising concerns about water, energy, health and wildlife impacts. A local church has hosted monthly community meetings since June, with organizers planning an October rally and calling for greater transparency around the project’s ownership, financing and development plans. The organizing effort shows how information gaps early in the development process can quickly fuel broader community opposition.
Madison considers where data centers could be built
Madison, Wisconsin, is considering a zoning framework that would limit data centers to no more than 100,000 square feet, effectively excluding the massive hyperscale campuses drawing opposition elsewhere. Proposed regulations would restrict larger facilities to industrial areas, require noise mitigation and mandate at least 1,000 feet of separation between medium and large data centers. Officials plan to gather community feedback before formally introducing the ordinance in November.
Google data center project in Chesterfield cited for environmental violations
Virginia environmental regulators have issued a notice of violation involving Google’s Project Peanut data center under construction in Chesterfield County, citing multiple alleged infractions involving sediment discharge and impacts to streams and wetlands. The project has already faced community concerns over transparency and economic impacts, and the violations could further increase scrutiny as Google develops three planned facilities in the county. Project officials have until October 29 to respond to the state’s notice.
Frustration over Kentucky data center has found another target — ethics complaints
Opposition to proposed hyperscale data centers in Carroll County, Kentucky, has expanded into formal ethics complaints against local officials, with residents alleging conflicts of interest and a lack of transparency surrounding land deals. The county ethics commission has opened an investigation seeking records and communications related to the project, while concerns over electricity costs and utility ties are adding to tensions. The dispute illustrates how secrecy during the early stages of development can evolve beyond opposition to a specific project into broader scrutiny of local government and the approval process.
Upper Burrell Township, Pennsylvania, is developing a data center ordinance as its six-month moratorium nears expiration, amid strong opposition to TECfusions’ proposed development at a 1,400-acre former Alcoa site. Draft regulations include substantial residential setbacks, on-site power requirements and standards addressing noise, water, fire protection, lighting and screening. Residents have raised concerns about noise, electricity rates and cumulative impacts alongside existing fracking operations, while township officials say they plan to pursue a community benefits agreement after completing the ordinance.
Wes Moore forms bipartisan governors group on AI, citing federal inaction
Maryland Gov. Wes Moore is organizing a bipartisan group of governors to develop an AI policy framework as states take an increasingly active role in regulating AI and data center development. Governors in several states have recently introduced new standards or restrictions, reflecting growing scrutiny of the industry at the state level. The article also highlights how data center development is becoming increasingly intertwined with the broader political debate surrounding AI, infrastructure, transparency and regulation.
