Appeals court: Faribault erred in data center decision

The Minnesota Court of Appeals has ruled that the city of Faribault didn’t have enough information about a proposed hyperscale data center when it decided the project didn’t require a more thorough environmental review.

Archer Datacenters owns property in Faribault and plans to develop it with up to 500,000 square feet of data center buildings on an 84 acre site.

Last August, the Faribault City Council approved an environmental assessment worksheet for the project. City officials decided that a more exhaustive environmental impact statement, or EIS, wasn’t needed.

The nonprofit Minnesota Center for Environmental Advocacy filed an appeal challenging that decision. MCEA argued the city didn’t have enough information about potential noise pollution, air pollution from backup generators and greenhouse gas emissions from electricity use.

And it argued the city didn’t consider the cumulative effects of other projects that draw on water and energy resources in the area, including other data centers and industries.

The appeals court agreed, saying the city failed to take a “hard look” at the environmental impacts before making its decision.

One example the court cited: The final environmental review lowered the project’s estimated greenhouse gas emissions by 98 percent from the draft version without explaining why.

The court ordered the city to either order an environmental impact statement, or postpone the decision for up to 30 days to get the needed information it lacks.

The Minnesota Center for Environmental Advocacy called the decision “a win for Faribault and all Minnesotans concerned about the impacts of hyperscale developments in our state.”

“I think it’s a big day for residents across Minnesota who have had so many questions about data centers that have been popping up really rapidly and with really huge development proposals across the state,” said Luke Norquist, a legal fellow at the center.

The process for reviewing proposed data centers hasn’t answered big questions people have about their impact on Minnesota residents or the state’s climate goals, Norquist said.

“This decision today confirms that these studies have not been looking closely at those questions at all, and more work needs to be done,” he said

Andrew Wolf, an attorney for the Iverson Reuvers law firm who represented Faribault in the appeal, said the city is “disappointed” with the decision.

“The city takes its environmental review obligations seriously and believes it acted appropriately and in good faith based on the information available at the time,” he said.

Wolf said the city is reviewing the opinion and “evaluating options for obtaining any additional information needed for a decision.”

In a statement, the city said it is “dedicated to ensuring that all development within our community is undertaken responsibly and with careful consideration of potential environmental impacts.”

Jordan Milman, a spokesperson for Archer Datacenters, said in an email that undertaking an environmental review in the Faribault project’s early stages was “part of our ongoing effort to be as transparent as possible.”

Given that the design was preliminary, the review included some estimates and ranges, Milman said.

“While we do not believe an EIS will be warranted, we respect the Minnesota Court of Appeals’ decision that more definitive information is necessary for the city to ultimately make a decision on the matter,” Milman wrote. The final design will include more specific calculations, he said.

The Faribault appeal was one of several lawsuits the Minnesota Center for Environmental Advocacy filed to challenge environmental reviews of proposed data centers.

Last month, a judge in Goodhue County ordered the developer of a hyperscale data center in Pine Island to temporarily halt construction until MCEA’s lawsuit over the project’s environmental review can be heard.