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North Mankato retains counsel as environmental group sues over AUAR for proposed data center; residents press council

North Mankato City Council · June 1, 2026
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Summary

The City announced it has retained outside counsel to defend the Alternative Urban Areawide Review it used for Project Deacon, a proposed large industrial/data center; residents raised concerns about the AUAR, aquifer impacts and trust in staff during public comment.

The City of North Mankato announced on Aug. 18 that it has retained attorney Paul Donald Reuvers of the law firm Iverson Reuvers, through the League of Minnesota Cities Insurance Trust, to represent the city in Minnesota Center for Environmental Advocacy v. City of North Mankato and Project Deacon, LLC.

In a prepared statement read at the start of the meeting, city officials said the Minnesota Center for Environmental Advocacy has filed suit challenging the city’s use of the Alternative Urban Areawide Review (AUAR) to evaluate potential environmental effects of a proposed four-million-square-foot development known in meeting materials as North Mankato Industrial or Project Deacon. The statement said the AUAR process is authorized by state law and described it as a hybrid of environmental assessment worksheet and environmental impact statement procedures. The city said it maintains the AUAR was used lawfully, that the litigation will proceed with compiling the official record, briefing legal issues, and scheduling a hearing before District Court Judge Paul Gunderson, and that the lawsuit seeks no monetary damages but only to determine whether the AUAR complied with legal requirements.

During public comment, multiple residents questioned the AUAR and the data center proposal. Barb Church asked whether council members had read the AUAR before approval, who signed the document, whether additional nondisclosure agreements exist, and whether the city is lobbying for additional aquifer water. Tom Hagen similarly asked if the council had read the AUAR and said some resident comments had not been addressed. Lucy Lowry told the council she believes staff responses were deceitful and said, “the trust has been broken,” calling for staffing changes. Benton Bakke said he opposes a hyperscale data center because of its heavy water and energy use and urged the council to reject the proposal.

Why it matters: The litigation challenges the administrative process the city used to evaluate a major proposed development; its outcome could affect the project’s timeline and the city’s land-use review procedures. Councilors amended the agenda at the meeting to add the city’s prepared statement and later adjourned into closed session under State Statute 13D.05 to discuss pending litigation with legal counsel.

The city said further updates will be provided as the court process progresses.