Data centers bring high stakes zoning hearings

As the prevalence of artificial intelligence (AI) continues to grow, so have the power needs required by the resource-hungry AI systems that provide the computing power that AI needs to function. The computing power needed for AI to function goes far beyond what even the largest modern computer servers require. To generate the computing power necessary to power AI, specialized and dense hardware, massive memory storage capacity and power generators and cooling infrastructure is needed. The complex and incredibly expensive machinery used to power AI is provided by data centers or “AI factories.” In most cases, data centers require zoning relief approved through public hearings before they can lawfully operate.

There are already roughly two hundred data centers in Illinois. Many more data centers are needed and are currently being proposed in numerous cities around the state. The hearings tied to data center developments have often attracted significant resident push-back and very contentious zoning hearings are common. A few recent hearings in Illinois have led to data centers being voted down.

The stakes are high in these hearings. Data centers are critical and often offer huge economic benefits to a city. However, they also raise significant concerns, including concerns about health and safety. While no two projects are the same, data center developments often offer communities the following benefits:

1. Significant financial investment into the community. Data centers often cost hundreds of millions of dollars to build. This massive capital investment generates large direct and indirect economic benefits to a community. Data centers also often pay many millions of dollars in real estate taxes every year.

• Job creation. Data centers are complex structures and usually take years to build. These projects generate a tremendous amount of work for trade workers.

• Infrastructure improvements. Data center projects often lead to upgrades to a community’s power grid, roads, water systems as well as telecom improvements.

• Economic development and business attraction. Data centers often attract other tech industries to a community as well as the vendors needed to service the data center.

• Community investment. Data centers often contribute financially to community job programs, workforce training initiatives, area STEM programs and to trade schools.

While data centers often tout huge economic offerings to a community, not everyone is sold on their value. Residents often arrive in droves to oppose data center developments. Resident concerns have included the following:

1. Noise pollution. Data centers found near residential homes have often been accused of being extremely loud and of generating noise, often described as a humming sound, 24 hours a day.

• High water usage. The cooling systems used by data centers require massive amounts of water and some residents fear these centers could pressure — and even lower — water tables and/or dry water wells.

• Drain on the community’s electric grid. The data center’s need for constant, significant power, trigger concerns they could raise electric rates, cause blackouts and/or damage the community’s electric grid.

• Air pollution. The typical data center’s heavy generator usage causes exhaust and raise concerns about air pollution and possible negative health impacts on those living nearby.

• Damage to nearby home values. It is often contended that the various questions about pollution and noise, combined with health concerns, will damage the value of homes found near a data center.

In summary, the economic benefits presented to a community by a large data center can be enormous. However, so are the quality-of-life concerns that are often raised by neighbors to proposed data center sites. AI is not going away. As AI grows, so will the need for these data centers. Virtually all communities of size — and the many stakeholders who stand to benefit from these developments — will need to come to a balanced understanding as to how to move these projects along while addressing the many quality-of-life concerns raised by residents during data center hearings to date.        

Client alert authored by Kevin M. Coyne (312 855 5441) Principal

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.