Minneapolis City Council to vote on data center regulations

The Minneapolis City Council is poised to pass zoning regulations Thursday that limit the size of new data centers and restrict them to the city’s downtown.

City leaders agree that, at a minimum, data centers must be regulated. But they disagree on how strict those regulations should be, and some back a full ban.

Supporters of data center development argue it can bring in needed jobs and tax revenue to communities.

“Look around our city. We do not see cranes. We are not building, and our construction trades need work,” said council member Elizabeth Shaffer, who was one of the lead writers of the regulations.

“Do data centers drive a lot of permanent jobs? No. Do they drive more jobs than vacant space? Absolutely,” she said.

Proponents also argue new centers are required to support cloud storage and the computing needs of artificial intelligence.

Data centers emerged as a key issue nationally ahead of the 2026 midterm election as communities protested the massive utility usage, noise pollution and secretive deals that can come with their development. The most controversial centers are supersized facilities located in rural communities and suburbs, but even small projects have prompted public outcry.

The Minneapolis regulations on the table

Minneapolis leaders are trying to put regulations in place before a six-month moratorium on most new data centers expires Nov. 21. The moratorium exempted downtown projects under 350,000 square feet and went into effect without Mayor Jacob Frey’s signature.

The city of Minneapolis received about 1,600 written public comments about potential regulations of data centers. The vast majority opposed data centers and almost half called for an outright ban, according to an MPR News analysis.

However, labor organizations including the Minnesota AFL-CIO and the Minneapolis Building and Construction Trades Council wrote in favor of looser rules, including allowing data centers outside of downtown and dropping or raising the size cap.

The mayor supports specific regulations for data centers and told WCCO in August he believes data centers should not be the sole use of a building.

"It generates tax revenue that helps drive down taxes for everybody else. But, too, it enables the owner to do something awesome that helps the community," Frey said.

City staff proposed allowing new data centers only in downtown, with server space capped at 175,000 square feet. The city’s planning commission recommended stricter rules: a rigid 50,000-square-foot cap and a council vote on each new data center.

A compromise measure was unanimously passed at a council committee meeting Monday — with council member Jamison Whiting absent — to be taken up for a final council vote Thursday.

The ordinance would limit the server space of new centers to 150,000 square feet, which is in between the 175,000 square feet suggested by city staff and the 50,000 square feet recommended by the planning commission.

It would also restrict new centers to existing buildings downtown, require mixed-use of buildings with data centers and require any center with server space over 50,000 square feet to buy into a renewable energy program.

Regulate or ban?

Attempts by progressive members to pass a full ban or require council approval for each new center failed on a 6-6 vote Monday.

“We don’t need more computers in our downtown,” said council member Soren Stevenson. “We need people down here, and so I want to fight for a vision where people are thriving in our city, not for a vision where stockholders are thriving in our city.”

A potential mayoral veto hung over the committee meeting, which included the full council.

Several council members called for Frey to publicly state what proposals he would veto.

“If you’re gonna veto, email us. Let us know. Let the public know your stance,” said council member Jason Chavez.

Instead, the mayor indicated his position through statements from his office to the press and conversations with city staff and council members.

Council member Linnea Palmisano said the mayor authorized her to share his position. “Mayor Frey does not support the planning commission’s amendments. If those are included in the final package, he will veto it,” she said.

“The reality we live in is that any action we take today that's not supported by the mayor will get vetoed,” council member Jamal Osman said Monday.

Osman said he’d heard from city staff and other council members that Frey would veto both a full ban and creating an overlay district, which would have required any new center to earn council approval.

If no new rules pass before the moratorium expires, data centers would fall back under the city’s existing zoning code, which allows them with a permit in 10 of the city’s 15 zoning districts.

Frey’s office confirmed to MPR News that he “supports the regulatory framework” of the compromise ordinance approved Monday.

Some council members said they’d propose additional amendments at Thursday’s meeting, which starts at 9:30 a.m.

The council needs a minimum of seven votes to pass legislation and a minimum of nine votes to override a mayoral veto.

MRP News correspondent Matt Sepic contributed to this reporting.

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