Developers navigate more difficult data center building environment

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By TIFFANY TAN

Special to The Daily Reporter

A multinational corporation has abandoned plans to build a $12 billion data center in DeForest after village officials denied its petition to annex land in a neighboring town. Community members opposed the megaproject, worried it would cause environmental destruction, higher electricity prices and elevated property values.

Just last week, Cassville residents voted to block data centers from their town after learning that an anonymous developer was interested in building a $1 billion facility locally. Residents feared data centers would pollute natural resources and upend the small-town life.

Similar rural and suburban communities around the country are pushing back against the entry of data center campuses, hundreds of acres with buildings that house IT infrastructure used to run major internet services.

Data centers have been built for decades but didn’t attract scrutiny because they resembled other office buildings. With the greater computing demands of cloud storage and artificial intelligence, more industrial-size data centers are now being proposed around the country. And their sheer scale alone is drawing public attention.

Under the current climate, data center developers should be prepared for an uphill climb in getting these facilities set up, according to speakers at a recent webinar that discussed issues in getting public approval for high-profile data center projects.

“The difficulty level is increasing, and that is coupled with the path forward being uncertain,” said Charles Renner, partner at the law firm Husch Blackwell, which presented the April 22 webinar.

He said developers need to understand that transparency is a key feature of projects that require government approval, since they involve such issues as annexation, zoning and added pressure on local utilities.

This expanded vetting takes time, which Renner said causes “tension” among information technology professionals used to an industry that moves rapidly and constantly disrupts the norm.

Sometimes, he said, municipalities will suspend certain development projects, if officials decide to create new regulations. Local elections, especially when data centers are a campaign issue, can also impact pending projects.

Husch Blackwell expects fewer data centers will be constructed down the road, but the resistance will level off as community members better understand the impact of these facilities.

Some towns will choose data centers to drive their economic growth, seeing the jobs that the facilities have generated from their construction to operation, said Tricia Braun, executive director of the Wisconsin Data Center Coalition. Using locally made materials to build data centers has fueled local employment, she added.

Braun said data centers, with their huge electricity demands, have also helped host towns improve their power grid infrastructure.

Opponents of data center campuses criticize the massive amounts of water the facilities consume to keep computer servers cool and the noise that the cooling systems generate. New data centers, Braun said, have used various insulation strategies to muffle noise as well as closed-loop water systems that conserve water.

“A closed-loop system will likely use less water than your local high school,” she said, “exponentially less than your golf course in town.”

It’s crucial, the speakers said, for developers to begin engaging with residents early in the planning process and answer their many questions.

“It’s very important to address that as a priority,” Renner said.