NDAs are hiding data center deals, drawing ire from locals — and attention from lawmakers
Local residents in Boyce, Louisiana, are expressing strong opposition and distrust after negotiations for a 300-acre data center by Applied Digital Corp. were hidden behind nondisclosure agreements (NDAs). The project, named Delta Forge 1, is now under construction despite public outcry over a lack of transparency and concerns about environmental, water, and power impacts. This situation has drawn attention from lawmakers nationwide, with several states proposing bans on such NDAs and Pennsylvania already enacting a ban for agencies it oversees.
In Boyce, a small town in Rapides Parish, Louisiana, a new 300-acre data center project by Dallas-based Applied Digital Corp., dubbed Delta Forge 1, is facing significant public opposition due to negotiations being concealed by nondisclosure agreements (NDAs). Residents, including local beekeeper Foster Hensel and former sheriff's deputy Shannon McManus, expressed concerns about potential impacts on utility bills, local environment, and water and power resources, lamenting the lack of information until construction had already begun.
The NDAs, signed by multiple state senators, the Rapides Parish assessor, and members of the England Economic and Industrial Development District (EEIDD), kept details of the $3.6 billion, 300-megawatt project under wraps, using code names "Project Lightning" and "Project Pixel." Despite a third-party environmental study claiming negligible impact, officials refused to release its findings publicly, fueling distrust during a contentious town hall meeting in June.
Officials like EEIDD Executive Director Ralph Hennessy and Louisiana Economic Development Secretary Susan Bourgeois defended NDAs as fundamental for economic development and protecting corporate secrets, arguing they are not illegal and facilitate negotiations. Applied Digital CEO Wes Cummins acknowledged the negative public perception of NDAs but stated their necessity, primarily due to securities law requirements for publicly traded companies, to protect against insider trading concerns.
However, the article contrasts this with a $10 billion data center project in nearby West Feliciana Parish, where Parish President Kenny Havard opted for transparency, publicly posting all project information without using NDAs. This approach, he noted, demonstrated that major projects can proceed without keeping citizens in the dark. The widespread use of NDAs in data center deals has drawn the attention of lawmakers, with bills to ban them introduced in Michigan, Oklahoma, Kentucky, and Ohio, and Pennsylvania Governor Josh Shapiro recently banning their use by agencies under his purview.