Briefing 04/24/2025
Weekly updates on the political risks American data center projects
This week’s roundup: In Indiana, Kosciusko County officials unanimously rejected a rezoning request for a $10B Prologis-backed data center, citing farmland preservation and strong community pushback. In West Virginia, HB 2014—which strips local control and redirects tax revenue from data centers—has triggered intense backlash, with over 1,800 residents signing a petition urging a veto. And in Austin, TX, city leaders are advancing AI and data center oversight, proposing utility impact studies, clean energy standards, and labor protections.
Kosciusko County, Indiana, Rejects Rezoning for $10B Data Center Near Leesburg
On April 22, the Kosciusko County Commissioners voted 3-0 to reject a rezoning request that would have allowed a $10 billion Prologis-backed data center near Leesburg, IN. The decision followed unanimous opposition from the Area Plan Commission and vocal community backlash at public hearings. The rezoning would have converted 500+ acres of farmland to industrial use.
Despite developer claims about minimal disruption and high tax revenue, commissioners sided with residents who cited farmland preservation, location concerns, and distrust of long-term projections.
Why it matters:
Location Strategy Disrupted: Prologis selected the site due to its proximity to 345kV transmission lines, but political risks emerging from local opposition now leaves one of Indiana’s most power-accessible parcels off the table.
Opposition Influence Growing: The unified rejection despite extensive lobbying reflects how organized rural pushback—like the “Keep Leesburg Rural” campaign—can halt billion-dollar projects, even in development-friendly states.
West Virginia HB 2014 Spurs Local Uproar Over Data Center Expansion
West Virginia’s Legislature passed HB 2014, a data center bill that limits local oversight and redirects the majority of tax revenue from high-impact data centers to state funds. The bill, a signature initiative of Gov. Patrick Morrisey, awaits his final signature. It would create Certified Microgrid and High-Impact Data Center programs, exempt projects from local zoning and permitting authority, and allocate only 30% of tax revenue to host counties.
The bill has sparked widespread backlash from residents,local authorities, and environmentalist groups. Over 1,800 residents have signed a petition urging a veto.
Opposing Groups and Voices:
Tucker County residents, near the site of a proposed Fundamental Data LLC facility.
Local officials: Al Tomson, Mayor of Davis, strongly opposed the bill’s erosion of local authority or Steve Leyh, Director, Tucker County Development Authority.
Environmental groups:
West Virginia Highlands Conservancy – Board member Tyler Cannon warned about short-term thinking and minimal job benefits.
Sierra Club West Virginia Chapter – Chair Jim Kotcon criticized the redacted air permit for the Fundamental Data project and flagged the opacity and pollution risks.
Why it matters:
Local Backlash: The bill initially faced opposition from local officials, but now residents and environmental groups are joining the pushback. Even if this coalition may eventually clash over specific data center projects, they are united in the belief that the law strips communities of their ability to decide where data centers are sited.
Permitting Uncertainty: While HB 2014 is meant to attract data center investment, the strong local resistance signals rising litigation and reputational risks, particularly for first-mover projects like the one proposed by Fundamental Data LLC.
Austin Considers AI and Data Center Oversight Amid Power and Water Concerns
The Austin City Council is set to vote on an expanded AI oversight resolution that addresses both workforce protections and the environmental impact of data center growth. For developers, this marks a pivot toward more politically engaged, locally managed oversight—even in traditionally tech-forward cities.
The proposal—spearheaded by Mayor Pro Tem Vanessa Fuentes—directs the city manager to conduct a joint environmental assessment with Austin Energy and Austin Water to evaluate the long-term energy and water demands of data centers, especially as AI accelerates infrastructure expansion in Central Texas.
Why it matters :
Infrastructure Scrutiny: The resolution orders utility impact studies and clean energy standards for data centers, signaling tighter oversight as Austin’s market surges. With ERCOT projecting a near-doubling of power demand by 2030, local reviews could reshape siting and permitting.
Labor and Transparency Mandates: New guardrails on AI use in city operations add political risk for data center and AI developers, tying worker protections and public transparency to infrastructure growth.
Political Risk Grows in Texas: The Texas Legislature is currently discussing legislation, SB6, that would increase oversight of data centers. The surge in data center projects tied to the Stargate initiative may be prompting lawmakers to propose new regulations in Texas.
Links
Prince William data center forum intermingles local officials, industry reps
https://www.insidenova.com/headlines/prince-william-data-center-forum-intermingles-local-officials-industry-reps/article_9cf741e1-c091-4897-b298-b44f388db0d3.html
Virginia leaders seek middle ground on data centers
https://www.thecentersquare.com/virginia/article_7de5be7a-d705-437e-b7f1-d478ff5db930.html
Net-Zero Data Center Alliance Forms to Pioneer Sustainable Data Infrastructure
https://www.prnewswire.com/news-releases/net-zero-data-center-alliance-forms-to-pioneer-sustainable-data-infrastructure-302435459.html
Entergy Louisiana Supports Meta’s New Data Center with Infrastructure Upgrades in Richland Parish
https://www.entergynewsroom.com/news/entergy-louisiana-supports-meta-s-new-data-center-with-infrastructure-upgrades-in-richland-parish/
Georgia among most generous states for data center incentives https://www.ajc.com/news/business/how-much-tax-revenue-does-georgia-forgo-to-woo-data-centers-its-a-lot/PW5HO7FKZ5CMRJV27VGNJ56OL4/