Public petition against Hermantown data center pumps brakes on project

HERMANTOWN — Large-scale data centers are on their way to Northern Minnesota, but one in the works for Hermantown has hit a pause after a public petition demanding further environmental review.

The Hermantown City Council unanimously approved what’s called an alternative urban areawide review, or AUAR, for the development of a 403-acre site on Oct. 6. Nearly 70% of the assessed area is identified as wetlands, and it's close to two different trout streams.

Minnesota has seen rapid development of data centers, particularly around the Twin Cities metro, due to state tax exemptions, the state’s cool climate and relatively inexpensive power. As these data centers spread, communities across the country associate data centers with massive drains on the electrical grid, excessive noise and millions of gallons of water used for cooling systems.

Data centers house technology hardware, acting as facilities that run the internet and mobile applications, from powering artificial intelligence to storing family photos in the cloud.

On Monday, Oct. 20, the Hermantown Council voted unanimously to approve a zoning change after a lengthy public comment period over the development. But the following evening, two permits were pulled from the Hermantown Planning and Zoning Commission agenda after receipt of the petition from the state Environmental Quality Board.

Behind the petition

The Environmental Quality Board is made up of members of the public and state department commissioners, and it’s the regulatory body that coordinates the environmental review process.

Catherine Neuschler, the board’s executive director, said the office reviewed the Oct. 17 petition, but the decision on whether to respond to the petition or reject it lies with the Hermantown Council.

“It's up to them whether they order an environmental assessment worksheet. They have to make that determination. But there are rules that say, ‘While that's pending, you can't make decisions on permits, or make other final governmental decisions,’” she said.

The public petition process requires at least 100 signatures as well as supporting documents, which range from the location’s proximity to a 100-year floodplain as well as concerns about noise levels, water usage and energy needs.

Petitioners argue the comment period for what’s called an alternative urban areawide review was insufficient, given the project was described as “light industrial use” rather than a data center, which was never directly specified.

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City of Hermantown

Northern News Now reported two permits for the Hermantown data center’s developer, Harmony Group LLC, were pulled from the agenda during Tuesday night’s meeting of the Hermantown Planning and Zoning Commission, upon the receipt of the petition.

In the permits, the project site spans 400 acres with plans to develop 1.8 million square feet across four communications buildings and other facilities. The project’s owner has still not been disclosed, with public officials recently coming under scrutiny for signing nondisclosure agreements with the unnamed Fortune 50 company.

In a project homepage, Hermantown describes the potential project as one that would “bring significant investment, job creation and economic opportunity to Hermantown and St. Louis County.”

Joe Wicklund, Hermantown’s communications director, said now that the project has officially entered the “traditional public realm” with the planning and zoning process, more information is available for the public to view.

"We really do want folks to take advantage of this opportunity of the pause if they're concerned or they're just curious,” he said. “All of that information now is laid out on that project website: from the noise impacts; to the water usage, which is so much different than people have initially been led to believe; to the energy opportunities that come with our regulated grid in Minnesota.”

Construction of the multi-building data center would take several years, with the possibility of 100 permanent jobs after completion. The project’s webpage asserts the designs for the complex do not include water systems to cool servers.

The project area is directly west of the Minnesota Power Arrowhead Substation, which the Hermantown project page said has made it a desirable location for this type of development.

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City of Hermantown

“We have an opportunity to take a look at this exact project, this exact proposal, and see how very different it is from those previous data center projects,” Wicklund said. “And start to learn more about what makes our region — Minnesota, Hermantown, St. Louis County — so different than areas where there have been challenges.”

Is the process rigorous enough?

During the October meeting of the Environmental Quality Board, Clarissa Ek of Hermantown expressed her concern with the data center moving in next door.

"The AUAR is not comprehensive. We have designated trout streams. We have old forests, 120-year-old oak trees, wildlife, significant environmental impacts,” Ek said.
“The city of Hermantown is trying to push this very fast. I live a quarter of a mile away and I just found out because the Star Tribune did a FOIA [Freedom of Information Act] request and we finally found out it was a data center.”

The state board is hosting two informational sessions on data centers; the first was Oct. 15.

The session covered the multiple environmental reviews and regulatory requirements for data centers, depending on a given facility’s size as well as energy and water needs.

While the state Legislature passed a bill late this session setting environmental and energy regulatory requirements for data centers, some lawmakers said it wasn’t enough for these centers that can use hundreds of millions of gallons of water and as much power as the city of Minneapolis.

“My concern was that, if we were going to have these large-scale data centers, we darn well needed to have some guardrails on them,” said Rep. Patty Acomb, a DFL representative from Minnetonka, on June 9 when it passed “This bill doesn’t totally address this, but it makes some important progress.”

An alternative urban areawide review differs in many ways from the environmental assessment worksheet and the even more rigorous environmental impact statement processes that are typically part of massive infrastructure projects.

Sarah Lerohl, an environmental review staffer with the Environmental Quality Board, described the AUAR as a document that examines a geographic boundary that could have many different projects within it.

"It's used in place of individual project level [environmental assessment worksheets] or [environmental impact statements], but it is limited to only applicable types of projects,” Lerohl said.

The board defines the AUAR as a hybrid of the two review processes, allowing local governments to use the AUAR as a planning tool to assess anticipated development scenarios and their impact on the environment.

While the Hermantown data center is not explicitly mentioned in the city’s AUAR, it is referenced in the citizen comments listing concerns about the need for further environmental review.

During the Environmental Quality Board’s public comment session, Ashlynn Kendzior, a staff attorney for the Minnesota Center for Environmental Advocacy, urged the board to require data centers to fall under a mandatory environmental impact statement category, placing a statewide agency as the responsible government unit.

"This would ensure that the cumulative potential impacts of data centers are taken into consideration, which is something that the individual cities right now simply don't have the capacity to do,” Kendzior said.

The board will accept public comment specifically on its role with the environmental review process — not necessarily on any specific project — through Nov. 6, before its next meeting.