Activists, city planners dissatisfied with Minneapolis City Council's vote on data center regulations

The Minneapolis City Council’s recent vote on data center regulations, a compromise reached after intense debate, has left stakeholders on both sides feeling less than satisfied. The ordinance, which still requires approval from Mayor Jacob Frey, attempts to balance the potential economic benefits of data centers with concerns about their environmental impact and the strain on city resources—a delicate dance as a moratorium on new data centers is set to expire on November 21. The council narrowly passed the measure after failing to enact a full ban, highlighting the deep divisions within the city over this emerging technology.

The Vote and Its Context

The Minneapolis City Council approved a data center ordinance Thursday by a vote of 7-6, marking a significant step in the city's evolving approach to regulating these facilities. The ordinance limits data centers to two downtown zones, mandates their location within existing buildings, and requires full council approval for each project. Council members who voted in favor included Elliott Payne (Ward 1), Aisha Chughtai (Ward 10), Robin Wonsley (Ward 2), Soren Stevenson (Ward 8), Jason Chavez (Ward 9), Jamison Whiting (Ward 11) and Aurin Chowdhury (Ward 12). Those voting against were Jamal Osman (Ward 6), Michael Rainville (Ward 3), LaTrisha Vetaw (Ward 4), Pearll Warren (Ward 5), Elizabeth Shaffer (Ward 7) and Linea Palmisano (Ward 13). The vote followed a failed attempt to implement a complete ban on data centers, a move championed by some council members who fear the environmental and infrastructure consequences of their proliferation. The city says downtown currently has eight data centers serving tech companies, and many more serve onsite computing needs of existing businesses around the city. Council members said they heard from Xcel Energy that there is interest in up to eight more data center projects downtown. The current moratorium, designed to allow the city to develop these regulations, will lapse on November 21, leaving the new ordinance in effect.

Key Features of the Ordinance

The approved ordinance includes several key restrictions and requirements. Data centers are limited to two downtown overlay districts. They must be located within existing buildings, prohibiting new construction. Each data center project requires full approval from the City Council. Furthermore, these facilities cannot be the primary use of a building, and are prohibited from occupying the first or second floors of buildings. The ordinance also mandates a comprehensive decommissioning plan in case a data center ceases operations, ensuring responsible closure and environmental remediation. To address energy consumption, data centers exceeding 50,000 square feet will be required to participate in a program with Xcel Energy, contributing to the development of renewable energy through the purchase of renewable energy credits. Council member Aurin Chowdhury explained this provision, emphasizing its role in supporting renewable energy infrastructure.

Size and Energy Requirements

Details

The ordinance sets specific size limits based on energy usage. Data centers can be up to 150,000 square feet in size when utilizing renewable energy sources. However, for those relying on non-renewable energy, the maximum size is capped at 50,000 square feet. This distinction aims to incentivize the adoption of sustainable energy practices within the data center industry.

Economic Arguments

The debate over data centers has been fueled by the city’s significant amount of vacant office space—approximately 9 million square feet—and the potential for adaptive reuse to revitalize downtown areas. Dan McConell of the Minneapolis Building and Construction Trades Council argued that data centers represent a vital opportunity for economic investment and tax revenue generation, stating, “I’m a taxpayer in the city of Minneapolis. I think that we're looking at a double-digit tax increase. And we've seen that for a couple of years. And unless we're involved for investment in our city and create an environment where people want to invest in our city.” He emphasized the need for investment to alleviate rising tax burdens on residents.

Community Reaction

The compromise reached by the City Council has drawn criticism from various corners of the community. Kalani Matus of the Climate Justice Committee expressed skepticism about the ordinance’s effectiveness, citing a history of inadequate enforcement of environmental regulations. “There's a long history of rules and regulations not being followed up on,” Matus said, referencing past disagreements with the Minnesota Pollution Control Agency regarding problem polluters. He voiced concerns that the city will fail to adequately monitor and enforce the new regulations, leading to continued environmental harm.

On the other side of the issue, proponents believe the ordinance falls short of fully capitalizing on the economic opportunities they offer. Council Member Elizabeth Shaffer questioned whether these facilities are a “cure-all” for revenue generation, but acknowledged they represent “a step in the right direction.” Council Member Soren Stevenson, while voting in favor, pledged to continue pushing for stricter regulations, including overlay zoning that would allow for public hearings and case-by-case evaluations of proposed data center developments. He stated, “If a full ban fails again tomorrow, we will bring back a proposal that includes overlay zoning again as well.”

What's Next

The ordinance now moves to Mayor Jacob Frey for approval or veto. Should he approve it, the regulations will officially take effect, shaping the future of data center development in Minneapolis. However, the debate is far from over. Council members have signaled their intent to revisit the issue, particularly regarding overlay zoning and stricter environmental controls. The city staff estimates that there is interest in up to eight more data center projects downtown, a figure that underscores the potential for continued contention and regulatory adjustments. The moratorium expires November 21st, so the Mayor's decision will have an immediate impact.

Marcus's Take

This vote highlights a fundamental tension in our city – the desire for economic growth versus the responsibility to protect our environment and the well-being of our residents. While data centers offer a potential solution to the glut of vacant office space downtown, it’s clear that their energy demands and potential environmental impact cannot be ignored. The compromise reached by the City Council feels like a starting point, not a final solution. The success of this ordinance will hinge on rigorous enforcement and a willingness to adapt as we learn more about the long-term consequences of these facilities. It’s crucial that we prioritize sustainable development – not just for the sake of our environment, but for the sake of future generations who will inherit the choices we make today. The rise of data centers, driven by artificial intelligence and the ever-increasing demand for digital services, is a trend that isn’t going away. We need to ensure that this growth doesn't come at the expense of our city’s character and quality of life – a quality of life that is strengthened when families are stable, communities are strong, and faith provides a moral compass.

Resources

For more information on data center regulations in Minneapolis, residents can visit the City of Minneapolis website. The Xcel Energy website provides information on renewable energy programs. The Minnesota Pollution Control Agency offers resources on environmental regulations.

The Minneapolis Building and Construction Trades Council can be found at Minneapolis Building and Construction Trades Council and the Climate Justice Committee at a location yet to be determined.

Residents interested in participating in future public hearings on data center regulations are encouraged to monitor the City Council’s website and local news outlets for announcements.

The city council meeting can be viewed City Council Meeting and supporting documents can be found Data Center Ordinance Documents.

Closing paragraph: The debate surrounding data centers in Minneapolis is likely to continue as the city grapples with the challenges of balancing economic development, environmental sustainability, and community concerns. The coming months will be critical in determining whether the new ordinance can effectively address these competing priorities and shape a future where technological innovation and responsible governance coexist.