Data center developer accuses Gibraltar city officials of unlawfully imposing 1-year moratorium
A data center developer is suing the city of Gibraltar, Michigan, alleging that city officials unlawfully imposed a one-year moratorium on their project at a former steel mill site. The lawsuit claims the project was permitted under existing zoning ordinances and that the moratorium was adopted specifically to halt review of their application. The developers are seeking a court order to approve the project.
Raeden Acquisitions and CAL Realty LLC have filed a lawsuit against the city of Gibraltar, Michigan, accusing city officials of unlawfully imposing a one-year moratorium on their proposed data center project. The developer, Raeden Acquisitions, in partnership with property owner CAL Realty LLC, seeks a court order to greenlight the project at the former McLouth steel mill site.
The lawsuit, filed on August 17 in the U.S. District Court for the Eastern District of Michigan, claims that the proposed data center was permissible under the city's M-2 (medium industrial) zoning ordinance, which also allows M-1 (light industrial) uses such as research and development facilities. Despite the developer submitting an application in February 2026, the city council unanimously approved a moratorium a week later in March, prohibiting the establishment of data centers for 12 months pending further study and enactment of new regulations. This action followed residents' concerns about environmental impacts, particularly on water quality.
The companies argue that the moratorium, passed by resolution, unlawfully amends the city's zoning ordinance, which can only be changed through a different process. They claim the moratorium was intentionally implemented to suspend or defeat the review of their pending application, despite submitting an updated site plan addressing the city's initial inquiries. The city later informed Raeden Acquisitions that its application would not be processed until the moratorium concludes.
The Michigan Zoning Enabling Act, cited in the lawsuit, states that local ordinances cannot totally prohibit a land use within a local government unit unless it's deemed unlawful. The developers contend their data center qualifies as a 'technical center' and is within the rights to be constructed. The legal action highlights broader tensions over data center development in Southeast Michigan, referencing similar projects facing pushback in Saline and Ypsilanti Townships.