As artificial intelligence and cloud computing fuel a nationwide boom in data center construction, Hastings officials are considering hitting the pause button before the city becomes the next destination for one of the energy-intensive facilities.
The Hastings Planning Commission recommended a one-year moratorium on new data center development at its July 27 meeting, giving city staff time to study whether local zoning regulations should be updated before such projects are allowed to move forward. The proposal comes at the request of the Hastings City Council's Planning Committee, which began discussing the issue earlier this month.
Community Development Director John Hinzman said the city currently has no zoning ordinance specifically addressing data centers, despite their rapidly growing presence across Minnesota.
Under Hastings' existing zoning code, larger data centers would likely qualify as permitted uses within the I-1 Industrial Park District, while smaller facilities could potentially be classified as office uses in commercial districts. Because they would generally be considered permitted uses, the city would have limited ability to impose project-specific conditions or operational requirements.
That lack of regulatory authority is prompting city officials to seek time to determine whether additional standards are needed.
Under Minnesota law, cities may adopt an interim ordinance, commonly referred to as a moratorium, prohibiting certain types of development for up to one year while studying possible changes to local regulations.
Data centers are secure facilities that house thousands of computer servers, storage systems and networking equipment that power everything from websites and cloud computing to artificial intelligence applications and business software.
While many people never see them, they have become critical pieces of digital infrastructure.
The city's report notes that modern facilities vary dramatically in both size and electrical demand. Smaller enterprise centers may require less than five megawatts of electricity, while hyperscale campuses operated by major technology companies can consume 75 to more than 300 megawatts. Large artificial intelligence campuses can exceed one gigawatt of power, making them among the largest individual electricity users in a region.
Because power demand—not simply building size—drives many of the community impacts, city officials say it is an important factor when evaluating potential projects.
Among the issues identified in Hinzman's report are:
• Electricity demand.
• Water consumption for cooling.
• Compatibility with surrounding land uses.
• Noise generated by cooling equipment.
• Air quality impacts from emergency backup generators.
• Increased traffic.
• Public infrastructure costs.
• Environmental impacts.
• Potential economic benefits.
While data centers often create substantial property tax value and construction employment, they generally employ relatively few permanent workers compared with manufacturing or other industrial developments occupying similar amounts of land.
Although Hastings has not received a proposal for a major data center, city officials are watching neighboring communities that have grappled with the issue.
Lakeville has emerged as one of Minnesota's fastest-growing markets for large-scale data centers, attracting proposals tied to major technology companies because of available industrial land and access to electrical infrastructure.
Those projects have generated debate over whether communities receive enough long-term economic benefit to offset enormous demands on electric utilities, water supplies and public infrastructure. Residents have also questioned the visual appearance of massive windowless buildings, the constant operation of cooling equipment and backup generators, and the amount of developable industrial land devoted to facilities employing comparatively small workforces.
Similar discussions have taken place elsewhere in the Twin Cities metropolitan area as utilities work to meet rapidly increasing electricity demand driven by artificial intelligence and cloud computing. Xcel Energy and other utilities have projected significant growth in power needs over the coming decade, with data centers accounting for much of that increase.
The issue has become significant enough that many Minnesota communities are reviewing zoning ordinances before projects are proposed, rather than reacting after developers submit applications.
A moratorium would not necessarily signal opposition to data centers.
Instead, it would allow Hastings to determine what regulations, if any, should apply before applications can move forward.
Potential topics for future ordinance revisions could include:
• Defining what constitutes a data center.
• Determining where facilities should be allowed.
• Establishing setbacks and landscaping requirements.
• Addressing noise standards.
• Evaluating backup generator operation.
• Considering utility and infrastructure requirements.
• Reviewing water usage and environmental impacts.
• Establishing site design expectations.
Without those standards in place, the city may have little discretion when reviewing proposals because the facilities could qualify as permitted uses under existing zoning regulations.
The Planning Commission's recommendation will head to the Hastings City Council.
During the moratorium period, city staff would research best practices from other Minnesota communities, evaluate potential impacts on Hastings and prepare any recommended zoning amendments for future public hearings.
The proposal reflects a growing trend among Minnesota cities seeking to proactively address one of the fastest-evolving forms of commercial development. As artificial intelligence continues to accelerate demand for computing power, communities across the state are increasingly weighing how to balance the economic opportunities offered by data centers with concerns about infrastructure capacity, energy consumption and long-term land-use planning.
For Hastings, city officials say a temporary pause would simply provide time to answer those questions before the first proposal arrives, rather than after.