Data center company sues Eagan over development pause

Eagan Capital has filed a lawsuit against the City of Eagan, Minnesota, arguing that the one-year data center moratorium enacted by the City Council in February 2024 exceeds the city's authority. Attorney Howard Roston of Fredrikson and Byron, representing Eagan Capital, contends that electricity demand regulation falls under the Minnesota Public Utilities Commission and seeks to block the moratorium's enforcement, which currently restricts data center expansions above 9 megawatts and new developments over 20 megawatts or within 500 feet of residential homes.

This legal action follows the Eagan City Council's unanimous denial of Eagan Capital's six-month interim use permit in May. The permit application came after city staff discovered unpermitted trailered chiller units in operation at Eagan Capital's 32-acre former Unisys site. Council members, including Paul Bakken, expressed concerns that the permit was a "backdoor way" to effect land-use changes without proper zoning adjustments. City staff also noted that the site's use for data centers potentially violated Eagan's zoning code, which requires at least 51 percent of the total floor area to be office space.

Meanwhile, the City of Inver Grove Heights has also moved to enact its own one-year data center moratorium, blocking new data center development. This decision was influenced by strong resident opposition to a proposed 54,070-square-foot data center by Qlevr LLC, slated for the former Travel Tags site. Residents submitted a petition with over 700 signatures to the Minnesota Environmental Quality Board, calling for a pause to study the environmental impacts, including noise pollution, similar to concerns raised about other hyperscale data centers in the state. The Inver Grove Heights city staff are now tasked with reviewing the citizen petition and studying potential environmental impacts.