Town Council denies application for M-2 zoning for modular data center at 1455 S. Shady St.

Town Council denies application for M-2 zoning for modular data center at 1455 S. Shady St.

News ClipThe Tomahawk·Mountain City, Johnson County, TN·10/23/2026

The Mountain City Town Council denied an application for M-2 zoning for a proposed modular AI factory and data center at 1455 S. Shady St. The project was proposed by James Phipps and Blue Sky AI, while an existing ordinance continues to allow data center applications in the town and Johnson County has no specific regulations for such developments.

zoninggovernment
Gov: Mountain City Town Council, Mountain City Planning Board

The Mountain City Town Council denied an M-2 zoning application for a proposed modular AI factory and data center at 1455 S. Shady St. The project, proposed by James Phipps and Blue Sky AI, drew an overflowing crowd to the Mountain City Planning Board meeting before the council’s decision.

The denial affects the specific application, but does not remove the town ordinance allowing similar applications in the future. Johnson County currently lacks regulations specifically governing these types of developments.