City Moratorium Challenged by Data Center Developer

A lawsuit filed by QLevr LLC has put Inver Grove Heights, Minnesota, in a precarious position, threatening the city with tens of millions in damages. This legal action follows the city's decision in June to implement a one-year moratorium on data center construction, enacted after significant public opposition to QLevr LLC's proposed development.

The developer argues that the city lacked a legal basis to reject their proposal, as it met all existing ordinance requirements. QLevr LLC initiated legal proceedings after the moratorium took effect, with the city refuting claims that the moratorium was "capricious."

City attorney Jason Kuboushek highlighted the substantial financial risk, estimating the city could owe up to $20 million if they lose in court, a cost potentially borne by taxpayers, as the city's insurance is capped at $1 million.

Despite the broader moratorium, three city councilors voted to exempt QLevr LLC's project, a decision expected to allow the development to proceed. A final vote on the major site plan is scheduled for September 28, at which point the developer is anticipated to agree to safeguards addressing neighbor concerns about noise and utility impact. The developer has consistently maintained that the data center will be quiet and have a minimal impact.

Councilor Mary T'Kach cast the sole dissenting vote, believing the city might have prevailed in court and emphasizing the need to update local ordinances to account for the rapid changes in data center technology. Councilor Tony Scales suggested T'Kach's vote was strategic, given the foregone conclusion of the carve-out approval by her colleagues.