City Planning Commission - Regular Meeting

In this video, I will discuss the efforts of Minneapolis in updating zoning regulations to deal with the impact of new data centers or expansion in our city. My name is Jason Wittenberg. I am a planning manager in Minneapolis. I work together with elected officials, city staff, and other stakeholders when the city develops recommendations for new zoning regulations that will be considered by the City Planning Commission, City Council, and City Council at the end of this year. Data centers are becoming a big topic right now. Large-scale private investment in AI encourages a large part of the growth of data center development. Many communities, including Minneapolis, are in the process of updating their zoning regulations to deal with the potential impact of this use. I will highlight information about the data center as well as discuss the initial recommendations and schedules proposed to consider the city regarding new regulations. In March this year, the City Council held a moratorium on data centers. This implements some of the data center's proposals while the city examines the problem and develops the following regulations. When adopting the six-month implementation, the City Council allows certain data centers to continue to apply for agreement in the city center area, especially those with a total of less than 350,000 square feet. The implementation of the data center in Minneapolis is scheduled to end on November 21 this year. In Minneapolis, like many other communities, city zoning regulations do not actually use the term data center. The next facility will be defined as a data center classified in Minneapolis Regulations as a communication exchange. This places them in the same category as telecommunications facilities such as telephone and internet exchange stations. This is not the right category and this use has been allowed quite widely in 10 of the 15 zoning districts in the city. In other words, this use has been allowed in most cities, and this is one of the reasons why the moratorium was implemented. When the moratorium was introduced in the city, the city council also took formal steps needed to develop new regulations affecting the data center, including introducing five zoning codes that we anticipate will be affected by the new data center regulations. So what is a data center? Data centers basically make the internet function by collecting, processing, storing, and collecting data. They have a server space where they can process data, as well as have space for things such as power distribution and network management, cooling systems, and offices. It can be understood that there are many concerns about the potential impact of wide-ranging AI and concerns about the impact of AI certainly contribute to concerns about data centers as well. There is a reasonable concern about the amount of electricity and water used to light and cool the modern data center. You may have read about the Raksasa data center that is located in the outskirts of the city or cities in Minnesota and other countries. Because Minneapolis does not have a wide open space to accommodate the use of that scale, the data center in Minneapolis is slightly different from those places. A large part of the interest of the private sector towards new data centers in Minneapolis, especially involving the use of existing buildings. Some of these new data proposals in Minneapolis are presented in buildings that have been used historically for data processing needs. And the size and needs of these facilities, although still significant, are relatively small compared to large-scale facilities that are produced and built in larger areas. In 2025, the Legislative Body of the State of Minnesota adopted several changes that affect data centers throughout Minnesota. These changes include tax changes, environmental standards, state-level permission coordination, customer protection requirements to ensure that data centers pay for electricity infrastructure, as well as tax requirements for construction workers. This city has identified eight data centers that serve third-party customers in Minneapolis. All located in the city center area. Some have not been established for a long time, while others have been around for a very long time. Company data centers that only serve the needs of internal business computation and institutions on the same property are spread more widely throughout the city. There are several factors that make the city center of Minneapolis an interesting place for the development of data centers. The electricity network has capacity in the city center of Minneapolis and there are many redundancies built into the city center's electricity network. There is very good access to high-speed optical network. There is a large number of end-user information and proximity, meaning information is sent faster. And there are several buildings that can be adapted for this use. It is important to note that many buildings are not suitable or not easy to adapt for the use of data centers. The rooms that are easier to adapt tend to have high skies, large structural capacity to withstand the weight of equipment, and very suitable utility infrastructure. There is a reason why data centers may not be suitable for the center of Minneapolis. Our priority is the buildings filled by residents and businesses that provide a lot of work space. The city center of Minneapolis is the center of our regional transit system. The system is aimed at moving people and spaces that basically only store equipment that is not in line with the concept of a transit-based area. However, in our post-pandemic environment, the city center still has a vacancy rate of about 30% and some of the spaces are not available for other uses such as housing. The data center can help with the city tax basis, reduce the loss of value that we experience in the city center, and remove some of the burden from the payment of housing taxes. You may have read about the sale of this new city center building that covers the expanded data center. The building is sold for about 8 times the last tax rate, and that's good for the city tax basis. The construction and infrastructure environment that is planned to support energy and water users on a large scale in the city center. The development of data centers requires high-wage labor. Utility waste costs $1 million a year to the city's public funds. Large-scale electricity consumption is a major contribution to this fund, and the practice of the city has always been to dedicate part of this income to climate initiatives. The income from large-scale commercial water consumption subsidizes water costs for household users. And there are practical and regulatory limitations that will result in a scale that minimizes environmental impact and impact outside the location. What are some examples of these practical limitations? In fact, if the regulation allows 30-storey buildings to be completely converted into data centers, there will be an extraordinary challenge regarding the conversion of high-level buildings completely into data centers. So, as mentioned before, we are talking about a data center with a smaller scale than many that we read, which means the impact on the environment will be smaller as a comparison. If Minneapolis will continue to allow the establishment and expansion of a data center in our city, there are challenges and real concerns that must be overcome. The demand for electricity for its use requires coordinated coordination with Xcel Energy to ensure that the electricity network can continue to serve all people reliably. There is concern whether the demand for electricity will affect the continuous transition towards renewable energy. And regarding the use of water, the city must ensure that the needs of the data center do not affect the ability to continue to serve other customers now and in the future. Generators are often used for many needs, but they are rarely the power scale that must be provided by the generator for the data center. This generator must be tested routinely, which results in intermittent noise and air pollution. Data centers often have designs such as warehouses that can fight against city goals related to our urban structure. And the equipment in the data center, the server itself, creates noise that must be eliminated. We want to prevent violations of the city's noise rules before that happens. To discuss more about the water use issue, the city's water needs come from the Mississippi River. The city has the capacity to distribute about 100 million gallons of water per day. The city's water consumption generally tends to drop for several decades, partly due to increased efficiency. Usually, Minneapolis distributes about 5 million gallons of water per day with a higher peak during the hot season. Of the 40 largest water users in Minneapolis, the usage ranges from about 800,000 gallons to 5.4 million gallons per month with an average of about 1.47 million. Taking one of the largest data centers in Minneapolis as an example, this data center has become one of the 40 largest water users in the city on average. The use is around 3 million gallons per month, but it has also reached a use of up to around 5 million gallons per month. Although the city pushes for wise water use, there is an extraordinary capacity to provide water in the future. Let's take a look at some of the things that can and cannot be regulated by cities in Minnesota. We can determine which zone districts allow a user. We can have certain discretionary inspection requirements such as a requirement for user permission. We can limit the size and scale of the user inside the foot. We can limit noise, as well as the location of the generator and mechanical equipment. We can determine the correct location design and compatibility with users around it. The things that we cannot regulate are the size based on the amount of electricity used by air-emission facilities, mechanical systems, buildings such as refrigerators, or types of backup power systems. We cannot impose regulations on energy standards that exceed the standards of the country. And we cannot impose fees that exceed the administration and regulation fees of our regulations regarding these uses. Now, let's discuss the city's initial recommendations. We recommend that data centers require permission to use conditions. This means that each data center must, through the City Planning Commission, ensure public information and the opportunity for the community to give feedback and state support or approval of the proposal. However, it is important to note that conditions are generally allowed. The city can set a reasonable target to mitigate the impact, but rejecting the permission of the user under the condition will face strict supervision from the court, which will consider whether the city has rejected the permission correctly. We recommend that the user size regulation is focused specifically on what is called a high-wide space, namely the area that is dedicated for IT equipment, including the server, network devices, and power distribution units. This type of standard will regulate the size of data center components that use a lot of electricity and cause noise. And that will ensure that we do not punish the data center for providing more office spaces, for example. Remember that when the City Council adopted the data center moratorium, they provided exceptions for facilities in the city center that have a total space of up to 350,000 square feet, including things like offices. Remember that the empty space in the data center is often about half the size of the facility. The limit of 100,000 to 25,000 feet per square for the empty space will coincide with the direction of the previous City Council regarding this use. The data center will be allowed to be used conditionally in two district zones of the city center as shown on the slide map, namely District DT1 and DT2. The recommended standard will require that the newly established data center must be located in the existing building. Small additions will be allowed, such as closing the equipment. We will require information on water consumption, electricity, and generators, as well as sound resolution plans. We will require proof that the data center is coordinated with Xcel Energy. And we will provide clarification that where the city obliges the active function on the ground floor, the equipment does not meet the requirements. To protect from the impact of noise, the new rules will ensure that the server room is located in the building, at least 20 feet from the outside wall of the building, and at least 100 feet from the union unit anywhere near the property. Data center equipment should not be placed on the first or second floor. Data center should not be the only use of city center buildings. To prevent all buildings, the function is changed to data center. All equipment must be placed on the roof or closed in the building. And as a qualification, we will ensure that businesses and Minneapolis institutions can continue to meet their own data processing needs in their own location. If the computer only meets business needs in the same property, it will not be considered a data center for this standard purpose. Clearly, the city does have noise regulation in Article 369 of the Regional Regulations. Our goal is to ensure that if a data center is built, we do not create a situation that causes noise violation. The City Health Department is currently arranging regulations for stationary generators. These regional regulations may be adopted at the same time as zoning regulations for data centers. The standards will determine when the generator can be used, such as during testing, during power outage, or during outdoor operation. There is a possibility that there will be additional zoning regulations that will regulate the proximity to residential areas around it. You may have heard of other communities where public officials signed a secret agreement that prevents people from knowing the details of proposals in their area. We want to emphasize that Minneapolis will not sign a secret agreement related to other data centers or projects that are involved in our regulation process. So far, this project focuses on data centers. This city is also arranging standards for the electricity grid, the generator that I mentioned earlier, the utility box, and the battery energy storage system. Our goal is to arrange the rules for use that will be included in the same amendment as the one that regulates the data center. As the standard for other uses is developed, we want to make sure that the initial recommendations for the data center are available for the comment period for 60 days. Standard uses for other uses that I mentioned will be arranged and will also be considered as part of the public opinion. The following is the schedule for considering this new regulation. The public comment period is currently in progress. You have the ability to send input through the project website. Recommendations may develop as a response to input from the community, elected officials, and other stakeholders. Our goal is for the City Planning Commission to consider recommendations in the public opinion hearing on October 13. This will be an opportunity for the community to give feedback in the public opinion hearing. Then the Planning Commission will provide advisory recommendations to the City Council. City staff recommendations and the City Planning Commission will then be considered by the City Council through the Business, Housing, and Zoning Committee on November 5. The meeting is of course open to the public, but once again, the opportunity for the community to provide evidence regarding the regulations is at the meeting of the City Planning Commission. Next, the City Council will fully take action on November 12. The Mayor will consider the actions of the City Council, and we estimate that the publication and date of the act of the regulation is November 21, that is, when the moratorium of the Data Center ends. I hope you find this video informative. Thank you for your interest in this topic.