New York debates municipal NDAs with data center developers amid moratorium
New York is currently under a one-year data center moratorium enacted by Governor Kathy Hochul, with state agencies researching and advocating for greater transparency. A key debate centers on whether municipalities should be allowed to sign non-disclosure agreements with data center developers, which critics argue limits public input. Legislation to address this issue has passed the State Senate but not the Assembly.
New York is currently observing a statewide one-year moratorium on data center development, initiated by Governor Kathy Hochul's Executive Order. This pause is intended to allow state agencies to conduct research and report on the industry's impacts, with a significant emphasis on promoting transparency in future project proposals.
A central point of contention is the practice of municipalities entering into Non-Disclosure Agreements (NDAs) with data center developers. Critics, including NYS Senator Kristen Gonzalez (D-Queens), argue that these NDAs allow major tech companies to negotiate development deals behind closed doors, effectively excluding public input until agreements are nearly finalized. Senator Gonzalez continues to advocate for her "Responsible Data Center Development Act," which aims to increase transparency.
Deanna Noël, deputy director for Public Citizen's Climate Program and author of "The Secret Data Center Buildout," highlights that such NDAs are common in high-profile data center campus developments across the country. She asserts that the rapid construction of energy-intensive facilities without public discourse is alarming and states need to implement stricter regulations regarding these agreements. In New York, relevant legislation has passed the Senate in recent years but has not advanced through the Assembly.