Community Protection for Data Center Siting and Permitting

Data center development has become one of the most consequential land use and infrastructure issues confronting communities across the United States. Driven by hyperscale cloud providers and rapidly expanding artificial intelligence infrastructure, these projects involve billions of dollars in private capital, significant utility demands and intense public scrutiny. As a result, local governments are increasingly under pressure and expected to make fast, high-stakes decisions that will shape local infrastructure and quality of life for decades.

Our Local Government & Community Data Center Practice Group represents municipalities and citizens at the center of this transformation, providing comprehensive legal advice and strategic counsel. We help communities maintain local control while ensuring elected officials, planers and communities have the tools necessary to make informed decisions that reflect local priorities and protect community interests.

This multidisciplinary team combines deep experience in municipal law, land use planning, environmental regulation, utility law, government relations, complex negotiations, coalition building and stakeholder engagement. We help communities navigate not only the legal and regulatory aspects of data center development, but also the political, intergovernmental and public-facing challenges that frequently accompany these projects. We serve as trusted advisors to communities at every stage of the process, including proactive planning, crisis response, negotiation and agreement, litigation defense and legislative advocacy.

Unique Regulatory Challenges

Data centers present unique regulatory challenges because they do not fit neatly into traditional zoning categories. These facilities combine characteristics of industrial operations, including massive energy consumption, mechanical equipment and cooling systems; commercial enterprises, including corporate tenants and service-based revenue; and critical infrastructure supporting cloud computing, artificial intelligence and essential digital services.

As a result, local governments are often pressured by multi-billion-dollar companies to evaluate projects that are unprecedented in scale, complexity and resource consumption.

In recent years, three primary regulatory approaches have emerged:

• Case-by-case permitting involves conditional or special use permits that allow individualized review of each proposal, including site-specific conditions and community impact assessments.
• Impact mitigation regulations entail ordinances written specifically to address community impacts such as noise, visual impacts, setbacks, screening buffers and resource consumption.
• Zoning reform typically involves comprehensive zoning amendments that treat data centers as a distinct land use category with tailored standards, rather than forcing them into existing industrial or commercial classifications.
• Local moratoriums to put a pause on data centers in certain communities.

Development Agreements

Among the most powerful data center management tools in a municipality’s toolbox is the development agreement, which helps secure community benefits and establish binding commitments from developers. Our attorneys can assist with negotiating and drafting development agreements to address issues beyond what standard zoning permits provide, including:

• Community benefit packages including infrastructure investments, workforce development and revenue sharing
• Resource consumption caps and efficiency standards for water and energy use
• Performance guarantees, monitoring requirements and enforcement mechanisms
• Phasing plans that tie expansion to demonstrated compliance
• Decommissioning plans and financial assurances for end-of-life scenarios

Government Relations and Public Policy

The regulatory landscape for data centers is evolving rapidly at both the state and federal level. Proposed legislation may expand or restrict local authority, create new incentive programs, alter utility regulations or impose state-level requirements.

Our government relations and public policy team closely monitors developments in this rapidly expanding area and works with local governments to ensure local concerns are represented before critical decisions are made. We assist communities in engaging with legislators, regulatory agencies, utility providers and other governmental entities while coordinating advocacy efforts with similarly situated municipalities and community groups facing comparable challenges.

When appropriate, we help communities build coalitions, develop coordinated policy strategies and ensure local voices remain part of conversations that could affect their future long before a project reaches final approval.

Moratoriums and Temporary Pauses

A growing number of municipalities are relying upon moratoriums and temporary pauses to give officials time to study impacts, listen to their citizens, update regulations and develop comprehensive approaches to data center placement. They are not permanent bans. However, important legal requirements govern how moratoriums are enacted and administered.

Moratoriums frequently attract significant public attention. Our attorneys help communities develop legally defensible approaches while assisting local leaders in communicating the purpose, scope and necessity of temporary development pauses to residents, stakeholders, policymakers and the broader community.

We advise on:

• Statutory and constitutional requirements for valid moratorium enactment
• Appropriate duration and scope of temporary development pauses
• Procedural requirements including public notice, hearings and findings of necessity
• Productive use of the moratorium period to conduct studies and draft permanent regulations
• Exit strategies and transition to permanent regulatory frameworks

Water and Utility Contracts

A single 100-megawatt data center may consume approximately 530,000 gallons of water per day for cooling operations. This level of resource consumption raises critical questions about community water supplies, infrastructure capacity and long-term sustainability. Our practice addresses:

• Water supply feasibility studies and capacity analysis
• Utility service agreements with appropriate rate structures and priority allocations
• Infrastructure cost-sharing arrangements for system expansions
• Conservation requirements and alternative cooling technology mandates

Zoning Authority and Land Use Controls

Municipal zoning authority remains the primary tool for regulating data center development. Because no mandatory federal energy or environmental standards apply specifically to private-sector data centers, local planning, zoning and permitting decisions are critical. Our practice helps communities:

• Audit existing zoning ordinances to identify gaps in data center regulation
• Draft data center-specific ordinance provisions addressing lot size, height, setbacks, screening, noise, lighting and resource consumption
• Establish conditional or special use permit requirements that enable meaningful review of individual proposals
• Navigate exclusionary zoning risks to ensure regulations withstand legal challenge
• Develop model ordinance language drawing on emerging best practices from jurisdictions nationwide

Proactive Planning

Communities facing data center development proposals or seeking to update their regulatory frameworks should not wait until a developer files an application. Proactive planning provides the strongest legal footing, the greatest negotiating leverage and the best opportunity to ensure local communities are protected.

Whether a municipality has already received a data center proposal, anticipates development pressure or seeks to modernize outdated regulations, our team offers the legal expertise, government affairs experience and strategic counsel necessary to protect community interests. From ordinance development and contract negotiation to legislative advocacy, stakeholder engagement, coalition building and intergovernmental coordination, we help communities remain informed, organized and prepared when confronting some of the most consequential land use decisions they will face.  

Team