Elk River rejects changing rules to allow data centers

The Elk River City Council voted Monday night to reject changes to a city ordinance that would have allowed a new data center.

Elk River Capital and Swervo Development Corp. are proposing to convert an existing 60,000-square-foot industrial building to a data center.

The project would be smaller than hyperscale data centers proposed in other Minnesota communities and promises benefits including jobs and property tax revenue. But many Elk River residents have expressed strong opposition.

Elk River has two existing data centers that don’t conform to the city’s current zoning rules, which don’t allow data centers in any zoning district.

The City Council considered changing its ordinance to allow data centers in industrial zones, with restrictions. Those included limits on size and energy use, and a requirement to use a closed-loop cooling system to reduce water use.

But the council voted against the change after hearing from numerous residents. They voiced concerns about noise, energy use, pollution from backup diesel generators and health effects on neighboring homes and schools.

“This is not an anti-technology conversation. What this is is, ‘We don’t know what we don’t know,’” said resident David McClellan. “There are other communities that are investigating this for us. There’s a lot to learn, but there’s no reason for us to rush into this.”

The council still needs to vote on whether to approve a conditional-use permit for the data center. Without the ordinance amendment, the project isn’t allowed. The council is expected to deny the permit at its Aug. 3 meeting.

Some council members said they’re not against all data centers but want to look at each proposal on a case-by-case basis. Some said Elk River Capital’s location near housing and schools doesn’t fit with the city’s future plans.

“Good community planning sometimes means saying yes,” council member Jennifer Wagner said. “It also means sometimes saying no, or not yet, or we just don’t have it right yet.”

Instead, the council asked city staff to draft a one-year moratorium on new data centers for consideration at an upcoming meeting.

Several other Minnesota cities have already adopted temporary bans on data center construction, including Minneapolis, Rosemount, Inver Grove Heights and Carver.

A data center developer is suing the city of Eagan after leaders adopted a one-year moratorium on new or expanded data centers in February.