Spring City, Pennsylvania. Technology companies and developers rushing to pour billions of dollars into ever-larger data centers to support artificial intelligence and cloud computing are increasingly losing battles in communities where people don't want to live near or near them.
Communities across the United States are reading and learning from each other's struggles with data center proposals that are rapidly expanding in number and size to meet growing demand as developers expand their capabilities in search of faster power connections.
In many cases, councils are trying to figure out whether data centers with energy and water needs fit within their zoning boundaries. Some allowed refusals or tried to write new regulations. Some have no zoning.
But as more people hear that a data center is coming to their area, once-sleepy council meetings in farming towns and growing suburbs are now packed rooms of angry residents pressuring local officials to reject requests.
“Would you like to have this built in your backyard?” Larry Shank posed the question to leaders last month in East Vincent Township, Pennsylvania. “Because this is literally happening in my backyard.”
A growing number of proposals are failing, raising alarm bells across a constellation of data centers from big tech companies, real estate developers, electric utilities, labor unions and more.
Andy Kvengros, who helps lead the data center practice at commercial real estate giant JLL, counted seven or eight deals he's worked on in recent months in which opponents went door to door, handing out shirts or posting signs in people's yards.
“This is becoming a huge problem,” Kvengros said.
Data Center Watch, a project of 10a Labs, an artificial intelligence security consultancy, said it is seeing a sharp escalation in public, political and regulatory failures in data center development.
From April to June alone, the most recent reporting period, it counted 20 proposals worth $98 billion in 11 states that were blocked or delayed due to local and state-level opposition. This represents two-thirds of the projects he has tracked.
Some environmental and consumer rights groups say they take calls every day and are working to educate communities on how to protect themselves.
“I've been doing this work for 16 years, been involved in I think hundreds of campaigns, and this is by far the largest kind of local resistance I've ever seen here in Indiana,” said Bryce Gustafson of the Indianapolis-based Citizens Action Coalition.
In Indiana alone, Gustafson counts more than a dozen projects that have lost rezoning petitions.
For some people getting mad about sharp rise in electricity billstheir patience is wearing thin for data centers that could bring even greater gains.
Loss of open space, farmland, forest or countryside is a serious problem. As well as damage to quality of life, property value or health due to the inclusion of diesel generators on site or the constant noise of servers. Others fear wells and aquifers could dry up.
Lawsuits are flying in both directions over whether local governments violated their own rules.
Big tech companies Microsoft, Google, Amazon and Facebook, which collectively spend hundreds of billions of dollars on data centers around the world, did not respond to questions from The Associated Press about the impact of the community pushback.
Microsoft, however, acknowledged difficulties. In an October securities filing, the company listed its operating risks as including “community opposition, local moratoriums and excessive local dissent, which could impede or delay infrastructure development.”
Even with high-level support from state and federal governments, resistance is having an impact.
Max Kossoff, vice president of investments for Chicago-based developer The Missner Group, said developers, concerned about losing the zoning fight, are considering selling the property once they have an energy source, a hot commodity that makes the proposal much more viable and valuable.
“You might as well take the chips off the table,” Kossoff said. “The thing is, you can get power for a site, but it's no good because you might not get zoning. You might not get community support.”
Some in the industry are frustrated, saying opponents are spreading falsehoods about data centers, such as polluting water and air, and are difficult to overcome.
Still, data center allies say they encourage developers to engage with the public early in the process, highlight economic benefits, spread goodwill by supporting community initiatives, and discuss efforts to save water and energy and protect taxpayers.
“It's definitely an industry discussion about, 'Hey, how can we better work with the community?'” said Dan Diorio of the Data Center Coalition, a trade association that includes major tech companies and developers.
However, the victory over the local authorities did not lead to victory over the residents.
Developers pulled the project from the October agenda in the Charlotte suburb of Matthews, N.C., after Mayor John Higdon told them the project had been unanimously defeated.
The project would finance half of the city budget, and the developers promised that it would be environmentally friendly. But town meetings were packed, and emails, text messages and phone calls were met with overwhelming opposition: “999 to one,” Higdon said.
If the council had approved it, “every person who voted for it would no longer be in office,” the mayor said. “That's for sure”.
In Hermantown, a suburb of Duluth, Minnesota, construction on a proposed data center campus several times larger than the Mall of America is on hold due to concerns about the adequacy of the city's environmental review.
Residents found each other through social networks and from there learned to organize, protest, knock on doors and convey their ideas.
They say they felt betrayed and deceived when they discovered that state, county, city and utility officials knew about the proposal for a full year before the city — in response to a public records request filed by the Minnesota Environmental Defense Center — released internal emails that confirmed it.
“It's the secrecy. The secrecy just drives people crazy,” said Jonathan Thornton, a realtor who lives across the street from the property.
Documents revealing the scope of the project emerged days before the city's rezoning vote in October. Mortenson, who is developing it for a Fortune 50 company that she did not name, says she is considering changes based on public feedback and that “more engagement with the community is appropriate.”
Rebecca Gramdorf heard about it from a newspaper article in Duluth and immediately worried it would mean the end of her six-acre vegetable farm.
She found other competitors online, ordered 100-yard signs and prepared to compete.
“I don’t think this fight is over at all,” Gramdorf said.
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Follow Marc Levy on X on https://x.com/timelywriter.
