Data Centers Are Coming: Is Your Community Ready?
Across Michigan, data center developers are quietly scouting sites in rural and semi-rural communities. They are looking for cheap land, access to power infrastructure, and local governments that have not yet adopted regulations for this type of use. If your community has not started working on a data center ordinance, now is the time.
Many municipalities have adopted moratoriums to buy time while regulations are developed. Others have considered and decided not to adopt a moratorium. Still others have not had developer inquiries yet and may feel less urgency. But regardless of where your community falls, the best time to write the rules is before an application lands on your desk. Reacting to a pending application is harder, more expensive, and more politically charged than planning ahead.
Why data centers require their own regulations
Data centers do not fit neatly into existing zoning categories. They are not traditional industrial uses. They consume enormous amounts of electricity and potentially water. They generate noise, heat, and light on a scale that most zoning ordinances were never designed to address. They can strain local infrastructure, change the character of surrounding areas, and raise legitimate public safety concerns. A general "industrial use" classification will not give your planning commission or board the tools it needs to protect the community while still allowing responsible development.
What a data center ordinance should address
Based on our work with communities across the state, a well-drafted data center ordinance should, at a minimum, address the following:
- Definitions (including cryptocurrency mining facilities, AI data centers, and traditional data centers)
- Zoning district placement and special land use approval process
- Enhanced application requirements beyond a standard special land use application
- Escrow funding for professional review costs
- Setbacks from residential districts and residential uses
- Noise limits
- Water usage, cooling systems, and groundwater protection
- Fire protection planning, suppression systems, and fire department training
- Emissions standards and backup generation
- Lighting, screening, and fencing
- Structure and equipment standards (including modular and prefabricated buildings)
- Underground power transmission
- Power and electrical capacity confirmation
- Insurance requirements
- Financial security for decommissioning and site restoration
- Ongoing compliance, inspections, and annual reporting
- Complaint resolution procedures
- Hazardous waste management
- Transportation planning for construction and operation
- Environmental compliance
- Transferability of approvals
- Enforcement and remedies
Each of these subjects carries nuances specific to data center operations that your existing zoning ordinance almost certainly does not cover.
What if you need more time?
If your community needs time to develop these regulations, a moratorium is a legitimate and well-established tool. Our office has recently assisted many Michigan municipalities with short moratoriums. This approach gives your community an immediate pause on data center development while the longer-term zoning amendment works its way through the planning commission process.
We can help
Our municipal law team has been actively working on data center moratoriums and substantive ordinances for communities across the state. There is no "one size fits all" ordinance. We work with your local officials, planner, and local counsel (if your community is not already a Foster Swift client) to craft an ordinance that reflects your community's needs and priorities. We can attend meetings in person or virtually to guide your planning commission and board through the process.
Please reach out to schedule a call.
Laura J. Genovich, Shareholder, Foster Swift Collins & Smith PC lgenovich@fosterswift.com | 616.726.2238
