The Milwaukee Common Council unanimously passed a one-year moratorium last week on new data center projects while officials draft new zoning standards. Mayor Cavalier Johnson signed the ordinance the day after the council’s vote.
Data center plans are facing public backlash across the state and the country. Milwaukee joins places like Superior, Madison and Wisconsin Rapids that passed their own data center construction moratoriums.
Milwaukee’s moratorium comes in response to public controversy after a proposed project to redevelop a vacant Walmart on the city’s north side.
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Debate in the city mirrors what’s happening in other communities. Officials say they need time to write rules for projects that affect neighborhoods, utility costs and other issues. But business leaders say a pause may drive economic investment to other places.
There are currently 53 data centers around the state, according to the Data Center Map. And at least 19 of varying sizes are in the Greater Milwaukee area.
But while developers are moving quickly to build data centers, Milwaukee Common Council Ald. Marina Dimitrijevic told WPR’s “Wisconsin Today” that local government operates at a slower pace to weigh how major changes could affect residents.
Before the moratorium, Dimitrijevic said the city had essentially no zoning rules or regulations regarding data center construction.
“Government is not set up to move that fast, which is why we have to pause,” she said. “Zoning code has to account for land use; we have to look at how it would affect neighbors, the noise, the possible pollution; the list goes on and on. And I think there are very few Wisconsinites that want to live right next to one of these (data centers).”
Dimitrijevic said she had concerns about how the boom in data centers would affect the region’s energy grid and utility costs for constituents.
A Pew Research Center survey released in September found 54 percent of Americans believe that data centers would have a negative impact on the environment, up from 39% in January. The survey found half of Americans believe data centers would negatively affect home energy costs.
“No one is asking for this, other than the corporations that are seeking to make money off of us,” Dimitrijevic said.
But for the businesses hoping to build in Milwaukee and stimulate its economy, a moratorium like the one the city just passed could scare away potential investment, said Dale Kooyenga, president and CEO of the Metropolitan Milwaukee Association of Commerce.
MMAC opposed Milwaukee’s moratorium.
Kooyenga said he thought the data center pause could’ve been worse and that businesses still have opportunities to negotiate with the city, but that such a moratorium is essentially putting up a “we’re not open for business” sign on the city’s front door.
“We understand that with any economic development, there’s a back-and-forth discussion, but you should have policies that invite a discussion, and then when you have those discussions, then share with the investor what you need to get to a yes,” Kooyenga said. “We just think (the moratorium) sends the wrong message for a city that really needs more economic development.”
Building a new data center can take thousands of workers in construction jobs, from electricians to carpenters to engineers. But once built, the centers themselves host relatively few job openings, up to several hundred.
Kooyenga said the years of construction jobs shouldn’t be discounted. And he said the jobs the centers host once operational are typically well above the median wage. Kooyenga said such projects raise significant property tax revenue for the area, which local governments could use to bolster schools, fire departments and other public services.
Dimitrijevic said she was more skeptical over the long-term payoff of such projects after the construction is done and the builders have moved on to other projects.
“I think we want the same (as businesses and developers) when we want investment in the city of Milwaukee, but we’ve got to do it in a way that serves the many, not just the few,” she said.
