New Legal Filing Suggests Birmingham Helped Developers Evade Data Center Moratorium

Legal pressure is mounting against the City of Birmingham and Nebius Group, the Amsterdam-based company developing the 300-megawatt BHM01 hyperscale data center in Oxmoor. A recent amendment filed on May 25 to a class action lawsuit, initiated on May 13 by Oxmoor residents Madelyn Greene and David Butler, alleges a civil conspiracy between the city and developers to acquire and develop the project.

The lawsuit contends that the city improperly issued a permit for the data center, encroaching on the authority of the Zoning Board of Adjustment (ZBA), and that the project should be subject to a city-declared moratorium on new data centers and new regulations. The amendment also seeks to add three companies—Raeden LLC, 201 Milan Birmingham LLC, and Lakeshore Data Center LLC—as defendants, alleging that in a series of quick sales, the value of the land was inflated from $20 million to about $90 million, making Nebius' financial exposure appear more severe. The plaintiffs argue that this land acquisition and accelerated permit filings were a coordinated scheme to circumvent regulations, invoking the “unclean hands” doctrine.

Despite fierce and persistent public opposition, the BHM01 project was grandfathered out of the moratorium because its approval process began before the moratorium was passed on March 3. Demolition for the project is now complete, and construction continues, making reversal more difficult. The City Council has scheduled a public hearing for June 9 to consider new data center regulations, and plaintiffs Greene and Butler have submitted suggestions including increased setback requirements, more environmental data, public notice for plan changes, noise limits, and a guarantee against increased power rates.