Fayette County, Kentucky, proposes strict zoning to limit data center development
Fayette County, Kentucky, is proposing a highly restrictive zoning amendment that would define and limit data centers, effectively banning hyperscale facilities countywide and establishing a 1,000-foot buffer near agricultural land. This comes as other Kentucky counties grapple with a surge of data center proposals, leading to local opposition, legal challenges, and concerns about electricity demand across the state. The proposed policy aims to proactively manage data center growth rather than reactively as seen elsewhere in Kentucky.
Fayette County, Kentucky, is drafting one of the state's most restrictive data center policies, aiming to proactively manage development rather than reacting to existing proposals. The proposed Zoning Ordinance Text Amendment, part of the Blue Sky Small Area Plan, would define "data center" in Lexington's code, allowing "minor" facilities (under 50,000 sq ft) by conditional use permit, but prohibiting "major" data centers (larger than 50,000 sq ft) anywhere in the county.
The draft also includes a 1,000-foot buffer requirement for data centers near Agricultural Rural land outside the Urban Service Boundary, a measure influenced by concerns over noise impact on the county's equestrian operations. This move contrasts sharply with other Kentucky counties, where communities are caught off guard by large data center projects, often involving nondisclosure agreements and leading to public outcry and legal battles.
Examples include Boyd County, where residents protested a proposed 550-acre TeraWulf data campus with 1-gigawatt electricity demand; Mason County, facing a lawsuit from residents over rezoned land for data centers; and Simpson County, sued by a developer. Cave City has enacted a temporary ban, while a project in Oldham County was scrapped. The Kentucky Public Service Commission has been informed by Louisville Gas and Electric and Kentucky Utilities about 11 potential data centers representing nearly 3.5 gigawatts of demand, with total prospective demand potentially reaching 12 gigawatts. Despite statewide sales-tax incentives for data centers enacted by Frankfort, Fayette County is moving to restrict their size and location.
The Fayette County zoning amendment is currently in draft form and will undergo further hearings, with a potential council vote in late 2026. While not yet law, the proposal signals a clear intent from Lexington to control data center expansion before any hyperscale facilities are formally proposed.