A court fight has moved back plans for a $14 billion data center in a small city outside Birmingham.
Three people who live near the site sued Bessemer last week, alleging that the city didn’t provide the proper public notice about rezoning 700 acres of rural land.
“They didn’t follow procedure based on what they promised under Alabama law, to give notice,” said Reginald McDaniel, attorney for the Bessemer landowners.
The Bessemer planning and zoning commission in March voted in favor of rezoning the land from agricultural to industrial use, amid some public pushback from residents in the Rock Mountain Lake and McCalla communities. But the request from the developer, Logistic Land Investments, still needed city council approval to proceed.
But now, after a hearing in Jefferson County Circuit Court on Wednesday, the city must restart the process with new hearings, according to two attorneys involved in the case. The city will have to provide 15 days’ notice to the public so residents can tell the zoning board what they think about the plan, said Shan Paden, an attorney for Bessemer.
After that hearing, if the request is approved, the city will have to provide public notice ahead of a vote by the city council.
Paden told AL.com that the city never violated the law in the first place.
“I would assert to you that we did, that we complied with the notice,” Paden said. “The law says, both the state code and city code, that interested citizens and property owners have a right to an opportunity to be heard. They don’t have the right to ask us to produce documents and all those things.”
The legal fight started with a lawsuit from David Havron, Ronnie Buchanan and Becky Morgan, who all live near the land proposed for the data center.
What we know about the data center
The data center proposed for Bessemer would include 18 buildings, each about 250,000 square feet, off nearly 700 acres of rural land in Rock Mountain Lake Road, the Birmingham Business Journal reported. The developer is proposing the $14 billion project as a 4.5 million-square-foot campus, BBJ reported. It would take roughly seven years to build.
Bessemer Mayor Kenneth Gulley has previously told local media that he has signed a nondisclosure agreement and therefore can’t discuss details of the data center project.
“I took a sworn oath of office to do what was in the best interest of the citizens of the city of Bessemer, and that’s what I am doing,” Gulley told WBRC.
The lawsuit notes the mayor’s nondisclosure agreement with the developer and alleges that the city “refused to release relevant development documents to the public.”
“These withheld materials are believed to include environmental and infrastructure assessments, site plans, and agreements that are necessary to evaluate the public impact of the rezoning,” the lawsuit said.
It is unclear why the mayor signed a nondisclosure agreement. Spokespeople for the city of Bessemer have not responded to multiple requests for comment from AL.com.
AL.com on March 31 filed a request with the city, seeking documents related to the project, including the developer’s rezoning application and any other plans the company had submitted for its project. The city has not provided any records.
Taking the city to court
The City Council was scheduled to vote on rezoning the land last week. But in response to the lawsuit, a judge in Birmingham issued a temporary restraining order. During their meeting last Tuesday, council members postponed the vote, per media reports.
Jefferson County Judge David Hobdy in Bessemer has since been assigned the case and held a hearing this week.
He dissolved the restraining order on Wednesday, but did not throw out the lawsuit altogether. So now the rezoning process starts all over again.
“Plaintiffs did not receive adequate notice of the proposed rezoning,” the lawsuit says. “While some Plaintiffs received written notice, others did not, despite owning property within 500 feet of the subject site.”
The city also published different hearing dates, according to the lawsuit. “This conflict in dates created confusion among residents and undermined the notice’s legal sufficiency,” the lawsuit reads.
The city had asked the judge to dismiss the case, arguing that it has not taken “any adverse action” against the residents. The city also said that considering a zoning ordinance is part of its legal duty, per court records.
In an order on Wednesday, Judge Hobdy ruled that the city’s request to dismiss the lawsuit – as well as the residents’ request for the project’s documents – is on hold until Aug. 7.
“I can’t speak for the actions of the council but I feel confident that they will move forward, I don’t know at what particular pace,” Aaron Killings, one of the attorneys for Bessemer, told AL.com. “This project is important to the state, county and city.”
He said that he plans to meet with the Bessemer City Council soon to discuss how to move forward.
A growing industry
Data centers house computers that process and store data. They resemble very large warehouses or corporate buildings that have rows and rows of huge computers inside, plus heating and cooling equipment to manage power usage.
Rural land with access to power lines and a lot of electricity capacity typically appeals to data center developers. Once they’re constructed, data centers typically employ fewer people than other industries – sometimes ranging between just 20 to 50 new jobs created – but with higher salaries.
Data center development is a growing industry, seeking to keep up with an increase in cloud computing demands. Virginia is a leader in the data center space, with Northern Virginia dubbed as the largest market in the world.
Data centers are newer to Alabama, but the industry is growing here. Between 2016 and 2023, the percentage of data center employment in Alabama doubled, according to census data published in January.
Core Scientific is bringing a $135 million data center to Auburn, with plans to create 20 full-time jobs.
Meta is building an $800 million data center in Montgomery, with 100 jobs, that’s expected to complete by the end of 2026. The parent company of Facebook already opened its first data center campus in Alabama in Huntsville in 2021, which employs about 300 people.
And DC Blox launched plans last fall to build two new large scale data centers, in Montgomery and Huntsville, to add to its first data center in Birmingham from 2019.
Why here?
McDaniel noted that there is other property already zoned for industrial use in western Jefferson County.
“Why are you so intent on putting this in our backyard where we’ve lived for generations?” he said. “There’s no reason for this data center to go into these people’s backyard.”
The lawsuit points out that the property is near “ecologically sensitive land” including two creeks that feed into important waterways and support wildlife, such as the watercress darter, an endangered fish found only in Jefferson County, and federally protected Bald Eagles.
“Plaintiffs have lived on and maintained the surrounding land – some for over 100 years – and stand to suffer permanent loss of quiet enjoyment, diminished property value, and ecological harm if the rezoning proceeds without proper environmental and procedural review,” the residents wrote in their filing for a temporary restraining order.
Killings noted that rezoning is only the first step in the process for future potential development.
“There were a lot of insinuations of transparency and things of that nature. In my opinion, plaintiffs were premature for their demands for environmental and traffic studies,” he said. “The community’s demand that we produce documents about this study or that study, we haven’t reached that point.”
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