Read time: 4 minutes
The site selection process for hyperscale data centers is a critical part of the development due diligence. The real estate location is key to the feasibility of the project. Key legal considerations include zoning requirements, applicable land use regulations, and access to power and water. Selecting optimal sites for data centers can also limit costs associated with design and construction, decrease the time necessary to bring the data centers online, and accommodate future growth.
Compatible zoning
Understanding zoning regulations and local politics is critical to obtaining necessary permits for development of data centers. The first step is verifying that the local zoning ordinance contemplates data center uses and related operations or similar uses and permits them on the development site. Data centers are commonly classified as industrial uses but may be permitted in commercial and mixed-use zoning districts. While data center uses may be permitted in the underlying zoning district, it is important to confirm whether the requirements and approval processes change if they are also located in special use overlay districts or environmental overlay districts such as steep slope, flood zone or conservation districts.
Zoning regulations restricting height and placement of buildings and accessory water towers and cooling ponds may indirectly preclude or reduce data center development on the site, even if data center uses are permitted. Additionally, noise ordinances, which may be in the zoning or general ordinance of a municipality, may limit development of the site. If the applicable zoning regulations do not permit data center uses by right on the project site or if the regulations restrict necessary design and operations, the process of obtaining zoning variances or conditional use approvals can be lengthy and uncertain. This is particularly true if the development involves multiple data centers in a campus setting with numerous accessory uses and structures.
Coordinating with local governments to amend zoning regulations to permit data center uses consistent with industry standard operations may be the fastest track to an approved data center. Engaging with local authorities early in the process can help identify any restrictions, ensuring compliance and reducing the risk of costly delays. Additionally, early community engagement is key to limiting potential opposition to the development and ensuring proper integration into the surrounding neighborhood. Data center developers often face municipal requests for exactions as a condition for the project’s, and consideration must be given to the legal basis for such conditions.
- Site selection for hyperscale data centers is critical to controlling costs and increasing efficiency
- Zoning requirements must be carefully reviewed and strategies developed to permit hyperscale data centers
- Key considerations in data center development involve power, water, and sound