Eagan planning commission recommends denial of interim permit for temporary chillers at Irongate data center

The Advisory Planning Commission in Eagan voted 6–0 on April 28 to recommend denial of an interim use permit (IUP) that would have allowed four temporary trailer‑mounted chillers to operate at 3199 Pilot Knob Road, the former Unisys building now owned by Eagan Capital LLC.

City planner Mike Schultz told the commission the IUP request covers four portable, trailer‑mounted, air‑cooled chillers and that staff received roughly a dozen noise complaints between February and April after the equipment began operating. Schultz said the city required a noise study and a temporary 20‑foot scaffolding wall with sound panels was installed; an updated study by ESI Engineering indicated the wall brought measured sound levels into compliance with Minnesota Pollution Control Agency standards. Schultz also said the city issued violation letters and a citation to the property’s agent, which is pending in Dakota County District Court.

“The city has issued violation letters, and recently a citation, to the representing agent of Eagan Capital LLC,” Schultz said during his presentation. He also explained the IUP is limited to temporary outdoor equipment and that any permanent chiller installation would require a separate review.

The applicant’s representative, Michael Margulies of Newton Rez LLC, said the building has operated as a data center since 1987, that rooftop chillers had failed, and that temporary chillers were brought in while new permanent equipment is ordered. “All we’re talking about here tonight is a request for an interim use permit to allow these chillers to be placed and to be operated until the permanent chillers are in line,” Margulies said. He added the developer filed a building permit for eight permanent chillers on April 20 and expects the permanent equipment to be installed within months.

Dozens of residents urged the commission to deny the IUP. Samuel Fields, who identified himself as an IT professional and neighbor, told commissioners the chillers caused persistent noise and that the long‑term plans were unclear. “If I replace an AC unit at home without a permit, I would have up to a $5,000 fine,” Fields said, arguing the city should enforce permitting rules. Multiple neighbors described a constant humming and vibration that they said interfered with sleep and outdoor use.

“The sound is a constant vibration. You hear a constant — it happens all night long,” said Anne Mattis, who said her home is the closest townhome to the chillers. Several residents asked for clearer disclosure about LLC ownership, whether the installation was permitted before the IUP review, and for stronger enforcement and monitoring of nighttime noise.

Commissioners questioned whether the situation represented an unanticipated change of use at the 312,000‑square‑foot building. Staff estimated about 46% of the building’s floor area is currently devoted to data center operations, approaching a 49% accessory‑use threshold in the city’s RD (research and development) zoning. Schultz said Dakota Electric’s current infrastructure limits the site to about 9 megawatts unless substantial upgrades are made, and noted the city’s recent moratorium on larger data centers includes exceptions up to 9 MW.

After discussion, Vice Chair Schwanke moved to recommend approval of the IUP with conditions; that motion failed on a voice vote (recorded in the meeting as 1 in favor, 5 opposed). Member Whitfield then moved to recommend denial, a motion seconded by Member Block. Commissioners said the record showed substantial neighborhood impact, concerns about the timing of installations and public notice, and unresolved land‑use questions. The commission voted unanimously to recommend denial; the decision is advisory and will be considered by the City Council on May 5, 2026.

The commission also noted that the mechanical permit allowing construction of the temporary noise wall had been issued earlier at the city’s discretion so mitigation could be in place while the IUP was decided, and that the mechanical permit would be invalidated if the IUP is denied.

City staff said documents related to the IUP, including the initial and updated noise studies and letters of opposition, are available as exhibits on the City of Eagan planning packet for the Advisory Planning Commission. The city declined to discuss details of pending litigation. The council will receive the commission’s recommendation, the staff cover memo and the packet for final consideration on May 5.