More towns across New Jersey are drawing a line against large data centers. Residents are raising concerns about massive electricity demand, water use, noise and added pressure on local infrastructure. But now the fight is entering a new phase: developers are responding with lawsuits worth hundreds of millions of dollars.
Data centers are becoming one of the most controversial development issues in New Jersey.
These massive facilities are filled with servers that power cloud services, websites, social media platforms and a growing share of artificial intelligence systems. Their expansion is accelerating across the country, but so is resistance from local communities.
Residents and local officials are especially concerned about the enormous electricity demand, cooling systems, backup generators and other infrastructure these facilities require. Bayonne, for example, cited high power demand, extensive cooling systems, battery storage and emergency power equipment among the reasons data centers should be treated differently from ordinary commercial or warehouse uses.
More Towns Are Saying No
The trend has expanded quickly in recent months.
On Aug. 12, Bayonne unanimously approved an ordinance banning data centers as a permitted use in all zoning districts. Mayor Sharon Nadrowski signed the measure the following day, saying city officials had listened to residents’ concerns.
Similar bans or restrictions have been adopted or considered in other municipalities across the state, particularly in South Jersey, where communities including Cherry Hill, Millville, Medford and Collingswood have recently joined the debate.
But what began as a local zoning debate is now moving into the courtroom.
A $300 Million Lawsuit
The most dramatic example comes from Monroe Township in Gloucester County.
Princeton-based developer Hexa Builders had been pursuing plans for property along Black Horse Pike, including a proposed data center of roughly 1 million square feet. Monroe later adopted a ban on such facilities.
Hexa filed a lawsuit on June 5 against township officials and the Planning Board, seeking as much as $300 million in damages over what it says is the lost value of the project. The case was later moved to federal court in New Jersey.
The company argues that its project was treated differently from other large developments, such as warehouses and industrial facilities that can also consume significant amounts of electricity and water.
But the lawsuit goes further.
Hexa also raises constitutional claims, including arguments under the Fourteenth Amendment, along with an unusual First Amendment argument that data centers support digital communication, social media and other forms of speech.
Monroe Township moved to dismiss the lawsuit in late July. As of early August, the case remained active with no final ruling.
Jersey City has also joined the growing list of municipalities restricting data centers. The city moved to prohibit new standalone data centers from being built on industrial land, removing data centers and so-called “cyber hotels” as permitted uses in its industrial districts.
Who Gets to Decide?
The fight over data centers is no longer just about one building or one town.
On one side are local communities arguing that they have the right to decide what kind of development they want and how much additional strain their infrastructure can handle.
On the other side are developers who invest large sums in land and projects and argue that municipalities should not be able to change the rules midway through the process and block projects that were previously allowed.
As demand for digital infrastructure and artificial intelligence continues to grow, the question is no longer simply whether data centers will be built.
Increasingly, the question is:
Who gets to decide where they can be built — developers, the state, or the people who already live in those communities?
The legal battles now unfolding in New Jersey may help provide part of the answer.
Sources: City of Bayonne, The Philadelphia Inquirer, U.S. District Court records, Data Center Dynamics
By NJ RADAR Team