Minneapolis Downtown Council welcomes exemption for downtown in data center moratorium
The Minneapolis City Council voted to enact a five-month moratorium on new data centers across most of the city, with an exception for downtown areas. The Minneapolis Downtown Council, represented by CEO Adam Duininck, welcomed this downtown carve-out, viewing data centers as a potential solution for vacant commercial spaces and declining property values. The temporary pause aims to allow the city to gather information and establish clearer regulations for future data center development.
The Minneapolis City Council voted 7 to 5 to impose a five-month moratorium on new data centers for most of the city, effective until November. Introduced by Council Member Aurin Chowdhury, the ordinance aims to provide the city with time to gather information, engage the public, and establish clear rules for data center development.
The moratorium includes an exemption for downtown data centers measuring 350,000 square feet or less. Adam Duininck, President and CEO of the Minneapolis Downtown Council, expressed general opposition to moratoriums but commended the Council for finding a middle ground with the downtown carve-out. He highlighted data centers as a potential tool to address declining property values and the shrinking tax base in downtown, citing the successful sale of the Sleep Number building, which saw its value increase significantly after an upgrade for data center use.
Concerns about environmental impact, water usage, and noise have been raised regarding data centers. Duininck differentiated smaller-scale data centers (10-20 megawatts) suitable for downtown from hyperscale projects requiring extensive new infrastructure. He argued that downtown data centers could be a net benefit to the electrical system, utilizing available megawatts and potentially slowing rate increases for other ratepayers. Furthermore, he suggested that proximity and latency benefits for AI and other technologies could drive economic development and tax base improvements.
Looking ahead, Duininck emphasized the importance of discussing the appropriate siting of projects and increasing transparency regarding water and electricity usage. While acknowledging the public pressure on the council to enact a moratorium, he reiterated his belief that an ordinance change or a different legislative approach might have been more effective in establishing necessary guardrails and regulations.