Inver Grove Heights City Council presses pause on reconsidering data center moratorium

The Inver Grove Heights City Council has enacted a one-year moratorium on all pending and future data center applications, a decision that drew cheers from residents. This action, approved by a 3-2 vote, followed a proposal by council members to pause development and study the issue, citing concerns for health, safety, and welfare of residents, and to allow time to determine appropriate guidelines for data centers in the city.

However, a data company identified as Clever, which had submitted an application weeks before the moratorium vote for a 54,000 square foot building on Carmen Avenue, is now threatening legal action against the city. Clever argues that state law prohibits applying the moratorium to projects with already submitted applications. While state law offers protections to applicants, cities may still attempt to enforce moratoriums depending on their specific wording. Clever also claims its proposed data center would use less electricity and water compared to others, but local residents remain skeptical, raising concerns about potential noise from generators and the proximity to apartments and a daycare center.

In addition to the local debate, the report touched on the broader data center landscape in Minnesota. While many communities statewide are deliberating proposals, dozens of data centers are already operational. These facilities can receive significant state sales tax exemptions for equipment, lasting up to 35 years, provided they meet certain size and investment criteria. However, large-scale data centers, once fully operational, are subject to an annual fee ranging from $2 million to $5 million based on peak energy demand, with these funds directed towards utility programs for low-income households. Currently, at least 12 large-scale data centers are either proposed or under construction in the metro area and other parts of Minnesota, which would be subject to these fees.