Eagan adopts one-year moratorium to study large data centers

The Eagan City Council on Feb. 17 voted to adopt a one-year interim ordinance that places a moratorium on the expansion or new development of large data centers while city staff and consultants study their local impacts.

The ordinance, approved by voice vote after a public hearing, applies to proposed data centers using more than 20 megawatts of electricity or located within 500 feet of property guided for residential use. Staff and the city attorney included redlined language that city staff said preserves the ability of existing approved projects to proceed, with a draft allowance that improvements to existing or approved data centers are permitted provided those improvements do not increase power use beyond 9 megawatts as described in the packet.

Why it matters: City officials said the moratorium will give Eagan time to study how modern data centers—whose size has risen with growth in artificial intelligence—affect surrounding neighborhoods through noise, water use and energy demand, and whether changes to the city code are warranted.

Community concerns and public testimony: Several residents urged stricter limits. Leo Caravello told the council that data centers “hog and pollute our water” and raised concerns about PFAS in cooling wastewater; he urged lowering the threshold to 5 megawatts, expanding the buffer to 1 mile from residential property, and reducing the allowed improvement cap to 3 megawatts. Caravello’s numerical claims (for example, a reference to “5,000,000 gallons”) were presented as public testimony and were not verified during the hearing.

An attorney representing Appadan, the owner of a recently approved data center in Eagan, said his client appreciated staff work and asked the council to be careful about using power-usage limits as a proxy for zoning. "We don't believe that the city or any city in the state of Minnesota have the ability to regulate the amount of power into a building under the zoning code," said Jacob Steen, who asked that the redlined language preserve approved projects' buildouts.

City staff and council response: Community Development Director Jill Hutmacher and other staff explained that the city currently often treats data centers as warehouses but that many jurisdictions are moving to define them as a distinct use; the moratorium will allow the city to evaluate whether and how to regulate that use locally. Mayor said the council's objective is to gather research on issues such as local administration of power and water concerns and to return later with considered ordinance options rather than immediately rewriting standards.

What was decided: The council closed the public hearing and adopted the interim ordinance by voice vote. The moratorium, as described in the draft, is set to terminate on 2027-02-17 or earlier if the council acts sooner. Staff will conduct the study and report back with recommendations on reasonable local restrictions, if any.

Next steps: Staff and any retained consultants will review data-center impacts and present findings to the council during the moratorium period so council members can consider any ordinance changes before the moratorium expires.