The Minneapolis City Planning Commission, a 10-member body of elected officials that advises the City Council on land use, advanced regulations on Oct. 13 that would rein in the size, noise and geographic reach of data centers within city limits.

The commission’s move aimed to balance demands from many residents to limit data centers with the need for significant tax revenue that would flow to the city from the use of empty downtown buildings. 

The proposed regulations, developed within the city’s department of Community Planning and Economic Development (CPED), would restrict data center development to two zoning districts in downtown, including Nicollet Mall and the North Loop. 

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Initially, CPED proposed allowing them to use up to 175,000 square feet of white space – the interior area that houses servers and other technology. But commissioners approved an amendment reducing that maximum to 50,000 square feet. Another amendment was passed to ensure city staff would be able to evaluate and approve data center proposals on a case-by-case basis.

Under CPED’s recommendations, data centers could not be the sole occupant of a building or operate on its first or second floor. To limit noise pollution, the regulations would require servers to be located at least 20 feet inside a building and 100 feet from the walls of residential properties.

Who would benefit?

Dozens of residents in attendance called for stricter regulations or a complete ban on new data center developments, arguing Minneapolis leaders should focus on expanding infrastructure that directly serves the community. 

Stephen Johnson, who lives within one of the downtown districts designated under the proposed regulations for data center development, urged the commission to create a more robust approval process. 

“My question for the City Council and this planning commission is, ‘Who benefits?’” Johnson said. “Because it certainly isn’t us, your neighbors.” 

Data centers support internet services by collecting, storing and transmitting data through large rooms of computer servers. Minneapolis has eight of them in operation, but cloud-based computing and artificial intelligence are driving their rapid expansion across the county and state, said Jason Wittenberg, a manager in the city’s Community Planning and Economic Development department, during Tuesday’s meeting.

Minneapolis’ zoning code does not specifically define data centers. Without new regulations, the facilities would continue to be classified as “communication exchanges,” he said, allowing them to operate in more than half of the city’s zoning districts without tailored regulations.

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In May, the City Council approved a six month pause on the development of new data centers to give city staff time to study the facilities’ impacts and develop regulations. Barring an extension from the Council, the pause is set to expire on Nov. 21. Some residents, including Council member Aisha Chughtai (Ward 10), called for extending the pause to a year.

Wittenberg, speaking for the CPED, said that about 30% of downtown building space is vacant and that data centers are taxed at a higher rate than residential buildings. In the face of a roughly $30 million budget shortfall in 2027, he said that even if they’re not an ideal land use, data centers could provide a needed economic boost.

“The decline in our downtown tax base is a significant reason why we are in the current budget situation that we’re in,” he said.

‘Please don’t sell it out’

About 40 residents signed up to testify at Tuesday’s meeting. Since the May moratorium, Chughtai said community members have submitted more than 1,600 public comments.

Speakers raised concerns about electricity and water consumption, noise and environmental impacts. Data centers use water to cool their systems and prevent servers from overheating. The amount of water used can vary significantly based on a facility’s size and cooling method. 

While the proposed rules would require developers to disclose anticipated water and electricity use, the city cannot directly regulate consumption. 

Minneapolis, which draws its water from the Mississippi River, has “tremendous capacity” to supply water to data centers, Wittenberg said, adding that the city currently distributes slightly more than half of its available daily capacity of 111 million gallons.

Jane Nalezny, a student in Minneapolis Public Schools, called out the river’s importance to Indigenous communities, wildlife and people throughout the Twin Cities.

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“It’s an amazing accomplishment that we have our water usage below capacity,” she said. “Just because we are able to, does not mean we should be taking more.”

Data centers also require substantial amounts of electricity, prompting concern from downtown residents about strain on the electric grid, which is managed by Xcel Energy. Suzanne Murphy, Xcel Energy’s Minneapolis community relations manager said during Tuesday’s meeting that Xcel Energy can reliably serve the energy needs of data centers in downtown Minneapolis.

Other residents said the city should focus on uses for buildings that promote a vibrant, welcoming downtown, like housing or business development.“Minneapolis has a lot of work yet to do to reimagine our downtown,” said resident Kate Derickson. “But please don’t sell it out to tech infrastructure,” Derickson said.

The recommendations came from the city’s department of Community Planning and Economic Development (CPED), which manages urban planning. The proposals now head to the Minneapolis Business, Housing and Zoning Committee on Nov. 6 and then the Minneapolis City Council. 

Shay Scanlan is a journalism student at the University of Minnesota, an editor at the Minnesota Daily and a reporting intern at MinnPost.

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