Data centers are back before Council this week. 5 things worth watching

After placing a temporary pause, or moratorium, on data center development in Fayette County, Lexington's Urban County Council has spent the last few months considering updates to local zoning rules governing their use.

On Tuesday, residents will get the chance to weigh in directly. Council is holding a public hearing at 5:30 p.m. in Lexington's downtown Government Center, 200 East Main Street. Council has described this hearing as an opportunity to hear from residents directly as it continues to craft rules for data centers that fit Lexington's needs. The body could also choose to take action on the issue.

Here's where the proposed rules stand, what Council is considering and what to expect at this week's hearing.

Why is Council reviewing data centers now?

Kentucky is experiencing a surge in hyperscale data center proposals following the rise of artificial intelligence and statewide sales tax breaks approved by lawmakers, as reported by The Kentucky Lantern.

Council has been in the process of updating local zoning laws to account for modern data centers supporting artificial intelligence. That review was part of a look at industrial uses around the Blue Sky Small Area plan, but it's since been separated into an independent regulatory review by Council.

In June, Council unanimously voted to adopt a resolution pausing data center development – halting zone change requests, development plan approvals and the issuing of "any permits, approvals, and authorizations necessary to the operation of data centers, in any zone." That moratorium is effective until October 31, 2026.

Council moved quickly to pass the moratorium after the news that a former Lexmark property on New Circle Road had sold to a data center developer. The Lexington Herald-Leader was the first to report the sale, which took both the Council and Lexington Mayor Linda Gorton by surprise.

At that same meeting in June, Council directed the Planning Commission to develop zoning ordinance text amendments (updates to local zoning laws) and send them back to Council for consideration. During a Planning Commission meeting in July that saw hours of public input, the body recommended tighter restrictions for data centers in Fayette County, as reported by WEKU.

Those recommendations have since returned to Council, where they remain under review.

What do the proposed rules allow and prohibit?

The proposed zoning updates for data centers have evolved and may change again before a final Council vote.

Initial draft changes proposed a complete ban on major data centers – defined as being greater than 50,000 square feet – in any of Lexington's zones.

It limited minor data centers to 50,000 square feet, added several operational requirements, and permitted them only as a conditional use within Lexington's B-4 Wholesale/Warehouse and I-1 Light Industrial zones.

In September, a Council committee got an informational presentation on data centers that also recapped the Planning Commission's revisions to the initial zoning ordinance text amendment (ZOTA). The latest recommendations:

• Further restricted the size of a minor data center from 50,000 square feet to up to 40,000 square feet.
• Added a 25 megawatt energy capacity cap. For comparison, Project Rainier – a 1,200 acre data center campus built by Amazon in Indiana – has an energy demand of 2.2 gigawatts, which is enough to power roughly 1.43 million homes.
• Added more required studies and plans, such as a stormwater management plan, energy efficiency plan, water quality and utilization plan, and a decommissioning plan.
• Modified spacing requirements. These include increased set-backs from 1,000 feet to 1,500 feet, and additional sensitive uses within the spacing requirement.
• Reducing the allowable noise level at the property line of an adjoining residential zone or use to 30 decibels, 24 hours a day. For context, 30 decibels is about as loud as a soft whisper.
• Removed the previous size requirement for server rooms. A server room is defined separately from a data center under the proposed ZOTA and would allow businesses to house computer and network equipment for their own operations under an accessory use.

What have Councilmembers been asking about data centers?

Councilmembers have had several questions about how the Planning Commission and the city's Planning staff arrived at the recommendations they did.

District 1 Councilmember Tyler Morton has pointed out that many of Lexington's B-4 and I-1 zones – where minor data centers would be permitted as a conditional use under the proposed rules – are concentrated in his district. He's questioned the fairness of that and whether equity was considered in that decision.

Vice Mayor Dan Wu, who currently leads the Council and is one of six candidates running in this year's Council At-Large race, said in a recent social media post that he doesn't believe hyperscale data centers belong in Fayette County. However, he added, "Not all data centers are created equal."

"We already have data centers here in Lexington. They hold our banking data. They hold our medical records. They hold your kids' grades. These have existed for years without negative community impacts. We want to make sure that whatever regulations we put in place don't hinder or prevent our local businesses, our institutions, our schools, our hospitals and our banks from keeping our data safe."

At-Large Councilmember James Brown, who is also seeking reelection this year, echoed a similar message in August, when he posted on social media that he opposes hyperscale data centers in Fayette County.

"That position reflects concerns I have heard from residents and the broader community about potential environmental impacts, increased demands on our utility infrastructure, and the potential of higher utility costs," Brown's statement reads in part.

What will happen at Tuesday's hearing?

Council will open the floor to public comment on Lexington's zoning rules and regulations related to data centers.

The meeting will begin at 5:30 p.m. in the Council Chamber of Lexington's Government Center, 200 East Main Street.

If you plan to attend the meeting, you may want to get there early to check in and sign up for public comment. Sign up begins at 5 p.m. and closes at 6 p.m. If you're in line before 6 p.m., you'll be allowed to sign up for public comment.

If you can't make the hearing, there are other ways to share your thoughts, including:

• Visit the Engage Lexington webpage covering data centers and use the open forum there.
• Call or send an email to your Councilmember. Find your Council district here or here.
• Send an email to the full Council at CouncilMembers-Email@lexingtonky.gov.

Can Council make a decision Tuesday, and what happens next?

While the meeting has always been described as a way for Councilmembers to hear from their constituents at a more accessible time of day, the Council is within its power to take action on data centers during this meeting. The meeting will be a special "Committee of the Whole," during which the entire Council meets to discuss important issues.

During the meeting, Council could vote to approve the Planning Commission's recommendations for data centers, make additional changes or decide it needs more time to consider the issue before making a final decision.

According to the city's Charter, any resolutions or ordinances Council considers must receive a first and second reading before they're officially adopted. So, if Council votes to advance the draft zoning ordinance text amendment related to data centers, it would go through Council's typical legislative process. A second reading and final vote from the body would occur at a future Council meeting.