Otsego joins Wright County in pausing data center projects
The Otsego City Council unanimously approved a one-year moratorium on data center projects, joining other Minnesota communities like Wright County and Elk River in pausing development. This allows the city to study potential impacts and develop specific zoning regulations, addressing resident concerns about water, electricity, and noise. The decision comes amidst a trend of increasing data center proposals in smaller cities and strong public pushback, with some cities facing lawsuits after imposing moratoriums.
The Otsego City Council has unanimously approved a one-year moratorium on data center projects, allowing the city time to study the potential benefits and impacts of such developments before adopting permanent regulations. This decision makes Otsego the latest Minnesota community to implement a temporary halt on data center construction, following a similar one-year moratorium enacted by Wright County in May, which applies to townships and areas under county zoning control. Otsego, which currently has no data centers and no pending proposals, aims to proactively establish clear guidelines.
The move is in response to a growing trend of data center proposals emerging in smaller cities across Minnesota, often met with significant public pushback. For instance, Monticello, also in Wright County, adopted a specialized data center zoning ordinance in April and is now reviewing a proposal from Monticello Tech LLC for up to eight buildings totaling 3 million square feet. Elk River, located across the Mississippi River from Otsego in Sherburne County, is also developing its own one-year moratorium after considering a data center proposal.
Otsego City Planner Dan Licht emphasized that the moratorium does not preclude future data center development but provides a crucial window to update the city's zoning ordinance, which currently permits data centers if they meet general requirements but lacks specific regulations for their scale and impacts. Council members and residents raised concerns about electricity demand, water consumption, noise levels, and the enforcement of regulations, highlighting perceived shortcomings in current state and local codes.
Council member Ryan Dunlap noted that cities attempting to impose moratoriums with pending applications have faced lawsuits, referencing a developer who sued the city of Eagan after its data center proposal was rejected following a moratorium. Otsego's proactive approach seeks to avoid such legal challenges by establishing clear rules beforehand. Mayor Jessica Stockamp also expressed disappointment in the Minnesota Legislature for not adequately addressing data center issues, particularly regarding noise regulations. The moratorium can be extended for an additional six months, but officials intend to lift it early if new regulations are adopted sooner.