Inver Grove Heights City Council votes to pass data center moratorium despite developer threatening lawsuit

INVER GROVE HEIGHTS, Minn. (FOX 9) - The Inver Grove Heights City Council held a rare early-morning meeting on a proposed moratorium on the development of data centers after the discussion was abruptly rescheduled earlier this week. 

After a contentious meeting, the Inver Grove Heights City Council voted 3-2 to pass the data center moratorium, which could expose the city to legal action from the data center developer after it threatened a lawsuit. 

READ MORE: Inver Grove Heights City Council meeting cut short before data center vote, residents furious

Inver Grove Heights data center discussion 

Big picture view:

After attempts by the mayor to table the vote to a later date, the Inver Grove Heights city council voted to pass the moratorium on data center construction in the city, granting a victory to residents who spoke at the meeting. 

An attorney for the city warned that this could expose them to a lawsuit from the data center developer. 

Dig deeper:

The one-year pause halts any new development while the city studies the impacts these facilities would have on things like the environment and the electrical grid. 

But a developer looking to build a facility in Inver Grove Heights threatening legal action if the project is put on hold. 

The pending facility is proposed for industrial property on the north side of the city, just west of the Fleming field, the airport in south st. Paul. 

The city council was scheduled to hold its third reading of a proposed moratorium on any new data center on Monday night before council members abruptly rescheduled at the last minute. 

City officials said they needed time to discuss "new information," a decision that angered some residents, who said they wouldn't be able to attend the rescheduled meeting while they are at work. 

Council meeting grows contentious 

What they're saying:

When the meeting started at 8 a.m. on Friday, a five-minute recess was called after the crowd at the meeting began jeering at the council members. 

The council then heard advice from a legal consultant on the ramifications that a data center moratorium would entail.

Jason Kubitschek with Iverson Rivers Law Firm was retained by the League of Minnesota Cities over the threat of litigation from the data center developer. 

"Now, the letter asserts that, if this project is stopped through your actions, that they will sustain damages in excess of $150 million. It's a very large number. We are pre-litigation, pre-suit. So I can't sit here and say 100% that that is the number of damages. It's what they've alleged, it's what we have to evaluate the file on right now. But we do anticipate if they were successful, there would be a damage award."

During the public comment period, the woman who started the moratorium petition, Carrie Lundberg, spoke about the passion felt within the community on the issue. 

"The community is passionate about the data center issue, and obviously you can tell, very engaged. We gathered over 700 signatures." 

She then continued by explaining the petition is asking for an Environmental Impact Worksheet EAW to examine the impact that a data center would have on the area. 

Let's use this pause to truly understand the impacts," Lundberg said. The EAW and the moratorium are two tools we can use that complement each other and allow us the time to fully understand the situation. Getting the facts first is the responsible way forward."

A man then spoke about how the value of his home would suffer if the data center was built at its proposed location, which he described as his "backyard."

When the crowd clapped, another five-minute recess was called. 

Kubitschek then returned to ask the crowd to hold applause in order to give everyone an opportunity to speak during the open comment period. 

Other residents spoke about their concerns over water supply, environmental impacts and the constant noise generated by the data center facility. 

Jeff Reiner, who said he has lived in Inver Grove Heights for nearly a decade, said to the council, "We're asking you to grow a spine, frankly. Hold the moratorium, establish a formal community process, conduct the environmental review. This community, and you all deserve to make an informed choice."

Another resident said, "I don't wanna be intimidated by the $150 million lawsuit […] companies like data centers and other large companies, they budget for fines. It's part of their thing."

A man who said he works at the senior home near the proposed site, Morgan Guillard, voiced his concerns for the residents.

"Ensuring that residents are comfortable is one of the first things they teach you as a CNA," Guillard said. "So I'm heartbroken thinking of being a senior at the homes next to this data center, listening to or even feeling the constant home from the data center while receiving care."

After getting more legal advice from city attorneys, the council voted 3-2 to pass the moratorium.

By the numbers:

The developers say they are looking to build what they describe as a "small-scale" data center, a roughly 55,000 square foot building.

If complete, the facility will use five megawatts per day, about enough electricity to power as many as 4,800 homes. 

Excel Energy said it will continue to improve its infrastructure to meet demand, noting that the building would run on a dedicated line paid for by the builder.