The Hastings City Council was set to take action Monday night on two issues that could have long-term implications for the city, including a one-year moratorium on new data centers and authorization for attorneys to move forward with environmental litigation.
The Aug. 17 council agenda called for a public hearing and final consideration of an interim ordinance placing a citywide moratorium on data centers. The council also was scheduled to authorize Pawa Law Group to initiate environmental litigation following a closed-session discussion with attorneys earlier this month.
Data center moratorium
The data center issue has moved relatively quickly through the city's review process.
The council's Planning Committee — Councilmembers Tina Lawrence, Angie Haus and Tom Vihrachoff — discussed data centers July 13 and asked the Hastings Planning Commission to consider whether the city should impose a temporary moratorium while it studies potential changes to its zoning regulations.
The Planning Commission voted 4-0 July 27 to recommend the moratorium. The City Council then held a first reading of the interim ordinance Aug. 3 before bringing it back Monday for a public hearing, second reading and adoption.
The issue isn't prompted by a specific data center proposal identified in the council packet. Rather, city officials want time to determine how the rapidly growing industry should fit into Hastings before an application arrives.
Community Development Director John Hinzman said in his report to the council that the city is concerned about "potentially unknown or adverse impacts" associated with the siting, development or expansion of data centers.
Hastings' existing zoning regulations do not specifically define data centers or list them as a separate land use. That is potentially significant because larger data centers would likely fall under uses allowed in the city's I-1 Industrial Park zoning district, while smaller operations could potentially qualify as office uses in commercial districts. Staff noted that such facilities could therefore be considered permitted uses, giving the city limited ability to impose conditions.
The ordinance establishes a moratorium through Aug. 17, 2027, unless the council rescinds it sooner. During that period, data centers are considered prohibited uses in all city zoning districts. The city would not approve zoning applications, building permits, construction permits, demolition permits or other city permits allowing a data center to be established, re-established or expanded.
The moratorium does not apply broadly to computer systems operated by existing businesses. The ordinance defines a data center as a facility principally used for the storage, management, processing or transmission of digital data and housing computer or network equipment and related systems. Supporting infrastructure can include cooling systems, generators, water storage facilities and utility substations.
Computer facilities that perform similar functions but are merely accessory to another lawful primary use are specifically excluded.
That distinction was one of the issues Planning Commission members discussed during their review. Commissioners also raised questions about the different scales of data centers, rapidly changing technology, lessons learned by communities that already host them and the possibility that today's data center buildings could become obsolete as technology evolves.
City staff identified a broad range of subjects that could be examined during the one-year study. Those include electricity demand, water consumption, land-use compatibility, noise, air-quality effects from emergency generators, traffic, economic benefits, public infrastructure costs and environmental impacts.
The city's Community Development Department, working with other departments, would use the moratorium period to study those impacts and recommend any changes needed to the Hastings City Code.
Council moves toward environmental lawsuit
The council also was scheduled Monday to take its most significant public step yet toward environmental litigation.
City Administrator Dan Wietecha asked the council to authorize Pawa Law Group to initiate environmental litigation on the city's behalf. The council hired the firm April 20 to provide legal services related to potential environmental litigation. Monday's action would move the matter from investigation and legal strategy into authorization to pursue litigation.
The council packet does not identify the prospective defendant, spell out the claims that would be brought or disclose the litigation strategy.
Those details have been discussed privately with the city's attorneys.
The council held a closed workshop Aug. 3 with City Attorney Cynthia Kirchoff and attorneys Matt Pawa and Ben Krass of Pawa Law Group. Mayor Mary Fasbender said at that meeting that confidentiality was necessary to allow council members and attorneys to have a candid discussion of litigation strategy and possible resolution. The council voted unanimously to close the meeting under Minnesota's attorney-client privilege exception to the Open Meeting Law.
The council returned to open session at 6:22 p.m. after nearly an hour behind closed doors.
Monday's agenda included two related actions.
First, Wietecha recommended allowing Pawa Law Group to hire Lockridge Grindal Nauen PLLP as local counsel. The city's April agreement with Pawa contemplated the use of local counsel. According to Wietecha's memorandum, the local firm's fees would come from Pawa Law Group's share of any recovery rather than being separately billed to the city.
The second action would formally authorize Pawa Law Group to initiate the environmental litigation. The city's attorneys are working on a contingency-fee basis, meaning attorney fees would be tied to a recovery rather than conventional hourly billing to the city.
The litigation comes as Hastings continues dealing with major environmental and financial issues surrounding PFAS contamination of its municipal water system. The Aug. 3 council minutes note that construction continues on the Central Water Treatment Plant and that the city is working to secure funding needed to begin the Eastern Water Treatment Plant. At that same meeting, Wietecha reported that the council had met in closed session with environmental litigation counsel.
The Aug. 17 litigation memorandum itself, however, does not specify the contaminant or defendant involved, so the precise scope of the contemplated lawsuit remains confidential.
Water service replacement contract
In another significant infrastructure item, the council was asked to award a $718,775 contract to Fitzgerald Excavating for Phase 1 of the city's Water Service Line Replacement Project.
Seven contractors submitted bids, ranging from Fitzgerald's low bid of $718,775 to $995,600 from A-1 Excavating LLC. Public Works Director Ryan Stempski recommended Fitzgerald after reviewing the company's qualifications and the city's previous experience with the contractor.
Fitzgerald plans to use service-line pulling as its primary installation technique, which the city said should reduce disturbance to private property and the amount of restoration required. Restoration also is expected to occur as construction progresses instead of being left until the end of the project.
The project remains within budget. The city's 2026 Intended Use Plan includes $1 million from a Minnesota Public Facilities Authority grant for the work.
The council's consent agenda also included more than $1 million in another payment to Magney Construction for work on the Central Water Treatment Plant, along with a $17,350 change order for the raw-water-main project. The change calls for four hydrants along the raw water line between Well No. 7 and the treatment plant to be equipped with tamper-resistant operating hardware to guard against vandalism and unauthorized water use.
The council's next regular meeting is scheduled for Tuesday, Sept. 8 at 7 p.m.