Minneapolis moves to tightly regulate data centers

Minneapolis is poised to replace its temporary ban on new data centers with some of the tightest local rules in the country, as the City Council prepares for a key vote Thursday on where and how the energy-hungry facilities can operate once the moratorium expires Nov. 21.^[1]

Under the proposal, new data centers would be allowed only in existing downtown and North Loop buildings, capped at 150,000 square feet, and required to publicly disclose their energy and water use, a nod to concerns about climate impacts and utility strain.^[1] Operators would also have to keep their loudest equipment at least 20 feet from exterior walls to reduce noise leaking into streets and neighboring properties, while city staff say downtown already hosts eight data centers and utilities have expressed interest in up to eight more.^[1]

The city put a moratorium on new data center projects earlier this year amid worries that a rush of large server farms, driven partly by artificial intelligence and cloud computing demand, could lock in decades of heavy electricity use and conflict with Minneapolis climate goals.^[1] At the same time, roughly 30% of downtown office space now sits vacant after the pandemic-era shift to remote and hybrid work, and several council members have argued that letting some older office towers convert to tightly regulated data centers is preferable to leaving them empty.^[1]

Supporters of the new rules say confining additional data centers to the downtown core takes advantage of existing power and fiber infrastructure while limiting land-use conflicts in residential neighborhoods.^[1] They point to the square-footage cap and reporting requirements as tools to prevent a handful of massive, opaque facilities from quietly becoming some of the city's largest energy and water users.

Skeptics on and off the council, however, warn that even mid-sized urban data centers can demand enormous, around-the-clock electricity loads and may push up costs or force utilities to delay retiring fossil-fuel plants if growth is not carefully managed. Business advocates worry that strict geographic limits and space caps could push investment to suburban or out-of-state sites, even as Minneapolis tries to reinvent a hollowed-out downtown. The Thursday vote will determine whether the city doubles down on a dense, highly managed path for digital infrastructure or reopens the door to broader data center development as the moratorium lifts later this month.

1. FOX 9