Oxmoor Valley residents expand lawsuit over Nebius AI factory, target $90M Milan Parkway land flip
Oxmoor Valley residents have expanded their lawsuit against Nebius AI's data center project in Birmingham, Alabama, alleging a fraudulent $90 million land-flipping scheme. The amended complaint details accusations that intermediate companies inflated the land cost through rapid resales and challenges the project's compliance with city zoning laws. Residents are seeking an injunction to halt construction and potentially form a class action for damages.
Residents of Oxmoor Valley in Birmingham, Alabama, have significantly expanded their class-action lawsuit aimed at halting the construction of a large Nebius AI data center. The amended complaint, filed May 25 in Jefferson County Circuit Court by plaintiffs Madelyn Greene and David Butler, now alleges a complex land-flipping scheme where intermediate companies rapidly resold the Milan Parkway site, inflating its cost on paper from approximately $20 million paid to third-party sellers (Regions Bank and U.S. Steel) to $90 million in roughly 24 hours. The lawsuit names three new "developer defendants": Raeden RE, LLC, 201 Milan Birmingham, LLC, and Lakeshore Data Center, LLC, accusing them of capturing substantial "intra-cascade markup" that was presented as Nebius's investment.
The complaint details the minute-by-minute transactions, alleging Lakeshore Data Center, LLC, for example, gained $9.8 million in 16 minutes from one parcel. It also draws a tighter connection between Hoar Construction, the contractor for the site, and Lakeshore Data Center, LLC, noting shared addresses and Robert O. Burton serving as CEO of Hoar and manager of Lakeshore Data Center. Furthermore, the lawsuit reiterates its core claim that the city of Birmingham violated its own zoning laws by permitting the 300-megawatt "AI factory" and its related power infrastructure, arguing that the demolition of a previous building eliminated any "grandfathered" rights and that the current project doesn't comply with MXD zoning rules without a formal amendment process and public hearings.
The residents are seeking a court order to halt construction, declare the project unlawful, and roll back permits. They also aim to move forward as a class action to seek compensation for lost property value and nuisance claims related to potential noise, light, and dust. While the Birmingham Zoning Board of Adjustment previously rejected special-exception requests for the project's electrical infrastructure, the city council later enacted a six-month moratorium on new data centers over 20 megawatts, though officials claim the Nebius project is exempt. Nebius has stated the project could generate significant economic impact and promises noise-reduction technology and minimal environmental impact.