High interest by data center developers in this part of North Carolina – and ideas for a small natural-gas-powered cryptocurrency mining project on the Deep River – has opened the floodgates for public debate about data centers in our community, just as the same debate has begun to ramp up nationally. But while there has been lots of information and conjecture flowing online, there has been far less focus on the practical and legal policy options associated with data centers. This week, our civic leaders at the city and county level both responded to the public conversation by adopting new rules and regulations for data centers designed to protect our communities and promote ongoing prosperity. It’s important that we, as a community, understand the processes and considerations that led to these forward-looking decisions.
Before this debate began, Sanford and Lee County’s zoning ordinances did not specifically address data centers as a land use. That’s not uncommon; few jurisdictions in the state or the country have rules specific to data centers, given the relatively small size of the industry up until recently. This doesn’t mean that data centers were banned; rather, it means that, if one did want to set up shop, they would be required to abide by the same restrictions as any other light industrial operation. The existing land use, traffic, lighting, safety, noise, and environmental health ordinances that all other Sanford and Lee County businesses must follow would have applied to data centers; they would be held to the same standards as any other similarly zoned business.
But with the increased discussion and concern over data centers, our civic leaders recognized that the public wanted even higher standards. Therefore, they directed the county’s planning staff to begin drafting a new ruleset specifically for data centers. This includes noise mitigation and testing, strict safety standards, protections for water and power rates, and measures to minimize impact to surrounding areas. These measures make a data center far less disruptive than nearly any other light industrial activity already happening in Lee County. They also ensure that the only data centers allowed are modern, responsible, sustainable operations – disallowing those with less firm commitments to safety and public wellbeing.
However, some residents believed that even these stringent regulations didn’t go far enough. They wanted our local leaders to adopt a moratorium on data centers, preventing any from being built in Sanford or Lee County whatsoever. This left local leaders with three options: do nothing, adopt the new data center ruleset, or impose a moratorium.
Doing nothing was insufficient; with no data center-specific rules in place, any operator could come to Sanford and Lee County under existing light industrial rules, including operators that do not intend to be good corporate citizens and act responsibly. Our local officials would have no grounds to stop such a project; if the land is appropriately zoned for light industrial use, state law requires them to approve it. And further, North Carolina law restricts the ability of counties and municipalities to impose new rules on an industry once it already exists in an area – meaning that, if a data center were to show up with no rules in place, not only could our local leaders do nothing to stop it, but they would be prevented from creating regulations for any future data centers.
A moratorium was, similarly, a bad idea. Under North Carolina law, a jurisdiction can impose a moratorium if and only if there are outstanding policy questions they need more time to answer. They are not simply pause buttons or outright bans on things that people do not like, and using them in that way would put our local governments in jeopardy of being sued, potentially costing millions. To impose a moratorium for any length of time, there must be questions that need to be answered, a reason why it will take that long to answer, and no other options available to local leaders. But as our local planning staff had already conducted significant research to create the updated ruleset for data centers, a claim that there were significant unanswered questions would be dubious at best. And in the end, such a legally questionable moratorium would only accomplish kicking the can down the road.
As such, adopting the updated ruleset for data centers was the best path forward, and the one our local leaders chose. It ensures that Sanford and Lee County are ready for any potential data center projects and only allows modern, responsible operations. At the same time, it doesn’t risk the legal quagmire that a moratorium does. Adopting these rules is a timely, prudent measure that safeguards the health and safety of residents while still showing our community is open for business. SAGA is grateful to our civic leaders for adopting the data center ruleset so that our community can take advantage of the right data center opportunities if they come, and prevent any potentially harmful projects from ever getting off the ground.