Data Centers, Local Zoning, And Land Development: How To Protect Your Project From Costly Delays

Data center development continues to surge, yet local zoning and land development frameworks have not kept pace. Across the country, projects are encountering delays and added risk due to outdated ordinances, procedural gaps, inconsistent interpretations by local officials, and increasing public opposition. Even well-capitalized projects can be threatened by these issues. These risks can be managed with careful planning, clear documentation, and guidance from lawyers experienced in complex land use and data center development matters. Understanding where projects most often run into trouble is the first step toward preventing setbacks and initial and future delays in delivering data center projects on time and on budget.

Secure Clear and Final Land Use Approvals

Many zoning codes do not explicitly address data centers. When ordinances fail to address data centers expressly, approvals often hinge on how individual zoning officers interpret terms such as industrial, utility, or technology facility. That ambiguity can open the door for appeals, even after substantial capital has been committed. Before proceeding with site work, ensure approvals are not only obtained but are also final and unappealable. Investors and lenders should consider obtaining zoning opinions when available or other supporting legal analysis to confirm the approval and land use status of a given site before development commences.

Verify Proper Public Notice Procedures

Establish a clear record of compliance with all public notice requirements. Even minor procedural missteps, such as missed postings, incomplete filings, or improper notice delivery, can extend or invalidate appeal periods. In some cases, the appeal period might never begin, leaving completed projects vulnerable to challenge months or even years later.

Plan for Multi-Phase and Long-Term Development

Many municipalities recognize permits only for a limited number of years. For phased construction, this can create gaps in approval coverage. Developers should structure agreements and financing to accommodate potential delays or renewal periods so that later phases remain protected while lenders, investors, and tenants should consider appropriate loan and investment timing and sizing levels and development milestones to address the additional risks a multi-phase project may create for a given party.

Anticipate and Eliminate Procedural Risks

Organized opposition can jeopardize entire projects if legal and procedural requirements are not satisfied precisely. Every procedural box must be airtight to protect major development projects from costly delays or challenges, while opportunities to hear, consider, and address potential public concern for a project should be thoughtfully managed based on the particulars of each project.

Risks and Pitfalls to Avoid:

• Relying solely on a zoning officer's letter without proper vesting or notice, which creates appeal exposure.
• Assuming later phases are protected under an initial approval.
• Using low-cost zoning or land use reports that may be incomplete or inaccurate.
• Failing to maintain complete documentation of filings, postings, and agency correspondence to prove compliance, if challenged.

As the data center sector accelerates, proactive due diligence on zoning, permitting, and local community sentiment can mean the difference between a smooth launch and a multimillion-dollar standstill. It is important to proactively address these considerations and obtain legal advice confirming that local approvals are final and unappealable, and to consider implementing a constructive notice appeal period, among other steps. Attorneys on our Data Centers Team bring together relevant real estate, land development, finance, leasing, infrastructure, and energy experience to provide the comprehensive consideration and advice these complex projects very much require. Our Team is available to assess your existing or proposed development plan and the applicable zoning and permitting process in order to provide tailored recommendations specific to your development location to ensure confidence from day one through project completion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.