Over the past year, the demand for new data centers from companies seeking to develop artificial intelligence has skyrocketed.[1] Without getting too technical, a data center is a facility that houses the necessary IT infrastructure for delivering web-based applications (such as artificial intelligence platforms like ChatGPT) and for storing data on servers associated with these applications.[2] Without these data centers, the potential of artificial intelligence will be severely limited.
However, building and operating these data centers requires substantial resources. The average parcel size of a data center land transaction in 2024 was 224 acres—a 144% increase from 2022.[3] Not only that, but data centers also place demands on energy infrastructure as well as local watersheds. By 2030, AI Data Centers could account for 14% of the U.S.’s total power demand.[4] Additionally, some reports indicate that a mid-sized data center require around 300,000 gallons of water a day (as much as the daily use of 1,000 U.S. Households) mostly to keep their facilities from overheating.[5]
In Michigan, legislation was passed this year providing incentives to data centers including use and sales tax exemptions—demonstrating Lansing’s desire to create a favorable business environment for data center development in the state.[6] A tracker of the permitted and proposed data centers in Michigan and other states can also be found here.
Even so, proposed data centers in Michigan that have encountered significant local opposition. In Washtenaw County, several data centers have been proposed recently including a $1.2 billion data center in Ypsilanti Township which would be jointly developed by the University of Michigan and the Los Alamos National Laboratory. Local residents, have raised concerns about this development including impacts to water resources and energy reliability and have urged township officials to block the project.[7] In Howell Township, a Planning Commission recently voted unanimously to deny a conditional re-zoning request for a $1 Billion-dollar 1,077 acre data center.[8] These examples demonstrate that data center developers must take account of local land use and zoning laws before breaking ground on their proposals.
Developers of data centers are pushing back on this opposition though. This month Saline Township settled with a Dallas-based development firm “Related Digital” after the firm sued the township following the denial of its re-zoning request; the data center is now set to move forward under certain conditions.[9]
If you are a party whose property rights may be affected by the development of a data center in your community, the experienced land use attorneys at Dalton & Tomich, PLC would be happy to take your call to discuss the options you have available to you.
[1] The cost of compute: A $ 7 trillion race to scale data centers, McKinsey & Company (April 28th, 2025), https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-cost-of-compute-a-7-trillion-dollar-race-to-scale-data-centers.
[2] Stephanie Susnjara & Ian Smalley, What is a data center? IBM (last visited, October 14th, 2025), https://www.ibm.com/think/topics/data-centers
[3] Data Center Development Cost Guide, 2025, Cushman & Wakefield at 12-13 (2024) https://cushwake.cld.bz/Data-Center-Development-Cost-Guide-2025/12-13/.
[4] Ellen Thomas, Data centers in one nation are driving power demand like nowhere else, Business Insider (October 14th, 2025), https://www.businessinsider.com/data-center-drive-us-power-demand-delay-clean-energy-mckinsey-2025-10.
[5] Michael Copely, Data centers, backbone of the digital economy, face water scarcity and climate risk, NPR (August 30th, 2022), https://www.npr.org/2022/08/30/1119938708/data-centers-backbone-of-the-digital-economy-face-water-scarcity-and-climate-ris.
[6] Enterprise Data Center Sales & Use Tax Exemption, MEDC (last visited, October 14th, 2025) https://www.michiganbusiness.org/services/data-center/.
[7] Brian Allnut, Washtenaw communities fight data center developments: ‘Not soft touches’, Planet Detroit (September 24th, 2025), https://planetdetroit.org/2025/09/washtenaw-data-center-opposition/.
[8] Brian Allnut, $1 Billion data center plan hits roadblock in Howell Township, Planet Detroit (September 25th, 2025), https://planetdetroit.org/2025/09/data-center-rezoning-howell/.
[9] Jennifer Eberbach, Rural township near Saline changes course on AI, computing data center after lawsuit, MLive (last updated Oct. 2nd, 2025), https://www.mlive.com/news/ann-arbor/2025/10/rural-township-near-saline-changes-course-on-ai-computing-data-center-after-lawsuit.html.
