This is what the hyper-scale data center looks like as proposed in the special use permit application:
Project Loon, as proposed (see page 8, Exhibits A through H) would include:
Four 300,000 square foot communication facility buildings, each approximately 50 feet high;
Two 45,000 square foot office buildings;
One 45,000 square foot warehouse building;
Four utility pads of approximately 225,000 square feet total;
Eight equipment yards approximately 1,330,000 square feet total; and approximately 575 parking spaces.
The scale of the proposed data center is larger than the Miller Hill Mall in Duluth, and includes more
acreage than the University of Minnesota Duluth. This is greatly inconsistent with other “commercial” development in the immediate vicinity.
The proposed data center would be one of the largest in the state of Minnesota. The next largest, single-tenant hyper-scale data center property is likely Rosemount’s Meta data center, which is expected to span 715,000 square feet. Apple Valley also approved a new technology park at a former aggregate mining site, which would create five data center buildings spanning a collective 794,200 square feet, as previously reported by Finance & Commerce.
We are concerned the City of Hermantown is not engaging its citizens and the larger community
On May 6, 2025, public notice for a Draft AUAR Scoping Document, describing the project as a light industrial communications facility, was published in the Minnesota Environmental Quality Board’s EQB Monitor. News reports at this time speculated “Project Loon” was a data center, however the City of Hermantown did not disclose this information during the public review periods. Under the Minnesota Environmental Policy Act, the City of Hermantown should have communicated in plain language the actual proposal, a hyper-scale data center, along with detailed discussion of project design and mitigation during the environmental review process.
The Final Revised AUAR was published in early September 2025. Residents became more widely aware of a potential data center project in late September 2025 following news coverage that confirmed the project is a hyper-scale data center. The City Council formally approved the final AUAR on October 6, 2025 with plans to vote on the rezoning for this project at their next City Council meeting October 20, 2025. Confirmation of “Project Loon” as a hyper-scale data center elevated community concerns about transparency, accelerated timeline, and environmental impacts.
We are concerned that the City of Hermantown did not provide meaningful time and engagement before any further decisions are made:
The Hermantown City Council unanimously voted in favor of this rezone October 20, 2025 following over three hours of overwhelmingly opposing public comment. This decision was made with minimal discussion or apparent consideration for the extensive resident concerns presented. The Special Use Permit (SUP) for this project was immediately slated for the Planning and Zoning Commission agenda the very next day, October 21st, and suggests that the City’s plan to rezone was predetermined. It also indicates that the City was not going to provide any meaningful amount of time for citizens to review and offer input on the SUP.
Fortunately, the SUP was withdrawn from the agenda after the City received a petition from the Environmental Quality Board (EQB). This petition, submitted by SHDC, formally requests the completion of an Environmental Assessment Worksheet (EAW) for this project.
We are concerned about whether this is the right place for a data center:
The proposed area for the data center and adjacent properties are rural residential in character. There are Hermantown residents living in houses on the land where the City is proposing to build the hyperscale data center. In comments provided for the AUAR, the Duluth Chapter of the Izaak Walton League states, “[o]f the 403 acres identified in the AUAR study area, 279 acres, or 70% of the proposed development area, is woodland or wetlands. Another 92 acres is identified as grassland/landscaped, bringing the total greenspace to 371 acres or 92% of the study area. The study proposes that 150 acres of mature trees will be cut down, half of the 55 acres of wetlands on the site will be destroyed, and impervious surface area will more than triple to 144 acres . . . In addition, approximately 2.3 million total cubic yards of excavation over 184 acres is envisioned, with runoff from the site flowing towards both West Rocky Run Creek and the Midway River. This is a massive disruption of the topography and landscape.”
There is no documented consideration of alternative sites in the environmental review done to date. While the City states the site has a feasible power connection, it is likely very many sites do. Are there sites that are feasible, yet have less impact on citizens and the environment?
Additional hyperscale data centers could be in the works (but if so, where, and how many, is unknown to the public). We question-how many additional data centers are being planned in the City of Hermantown or the greater region? A state planning study should be done before permitting any hyperscale data center. This is far preferable to the current sprint we are seeing nationwide to approve and build data centers. Multiple hyperscale data centers hold the prospect of fundamentally changing
the character of the region and imposing significant adverse consequences to costs and quality of life for residents.
We are concerned about the City of Hermantown’s assertions on the number of jobs created from the proposed data center:
The City states there would be construction jobs. However, fewer than 100 may work at the facility during operations at full build-out. Many of these operations jobs may be remote, and not located in the Twin Ports area. How many of the construction jobs would actually be local? How many operations jobs would actually be local?
“Data centers have rightly earned a dismal reputation of creating the lowest number of jobs per square foot in their facilities” (Wall Street Journal, February 2025). Property value fluctuation and depopulation of the immediate surrounding area may offset job gains in the local economy.
Additionally, this data center may be supporting the artificial intelligence (AI) efforts of a Fortune 50 corporation. One the many benefits that the AI community touts is its capability of eliminating jobs now held by humans. Does the projected 100 full-time jobs really benefit the region when thousands would be at risk of being laid off?
We are concerned about taxes and public finances:
Hermantown states that this commercial development will help diversify our local and regional tax base beyond the current mix of businesses and residents. New sources of tax revenue can be helpful. Our concern is the price local residents will pay.
There has been very little disclosure by the City as to the full financial picture for how taxes, costs to citizens and the City budget will be affected in the short-term and long-term by this project. Vague claims by the City are fundamentally inadequate (see “What About Taxes” under their Q&A). The only specific figure provided suggests that the City could end up increasing risk by concentrating over 90% of its commercial tax revenue in the project. If the project proponent abandons the project, what will be the consequences to the financial stability of the City budget in such a situation? Will the City be willing to enforce special use permit stipulations if it is financially dependent on the project?
Many more questions need answers, backed by financial analysis. Will sales tax, paid by residents and visitors of Hermantown, fund the project? Will residents or area citizens fund the project in other indirect ways? Will proposed state bonding that appears connected to the project be paid in part by taxpayers? Overall, given tax abatement and other factors, what is the short-term and long-term financial outlook for how the project will affect the municipal budget and area residents? What are the consequences to that financial outlook if the project is abandoned? The City owes area residents and itself a comprehensive financial analysis to answer these questions before any further decisions are made on the project.
We are concerned about the data center’s power usage and impacts on utility bills:
We have not found any disclosure from the City of Hermantown on how much energy the actual proposed data center is estimated to use. The City needs to provide this information to the public. A new hyperscale data center could require hundreds of megawatts of energy capacity. This may require a new power plant. How sure is the City that any direct or indirect needs of the data center (such as a power plant or powerlines) have not and will not increase utility bills, which result in rate payers subsidizing this project?
The power requirements of hyperscale data centers routinely exceed 100 megawatts (MW; one megawatt is equal to 1 million watts). “Roughly 100 MW of electric power is sufficient to support the electricity needs of 80,000 U.S. households.” (Data Centers and their energy consumption: frequently asked questions). Is the energy infrastructure sufficient to support several hyperscale data centers in the state coming online simultaneously? Will regular people subsidize these projects through rate
increases on utility bills? The Public Utility Commission (state) approval is needed to change rates for Minnesota Power customers.
We are concerned about air quality:
We have not found any disclosure from the City of Hermantown on the air pollution that would be generated from running stationary diesel power generators in either the environmental review or the special use permit application materials. There is no disclosure we found on how often the generators would be tested, either. Stationary diesel generators used as backup power for hyper-scale data centers can adversely impact air quality and human health. This lack of transparency needs to be corrected in an Environmental Impact Statement.
We are concerned about noise and light pollution:
The City of Hermantown has not provided adequate information regarding mitigation efforts for noise. A noise study was posted to the City website along with the special use permit information. This study evaluated compliance with Minnesota Rules on noise during the operations phase of the project and recommended mitigations to (mostly) achieve compliance. Notably, the construction phase of the project, projected to take up to 10 years, was not included in the noise study.
Because of the constant nature of data center operation noise, compliance with Minnesota Rules is not adequate to avoid significant adverse long-term impacts to residents. Low-frequency noise, such as that produced by data centers, can damage human health. The following text is from the 2024 Data Centers in Virginia report: “Some residents described physical symptoms such as migraines from the facilities’ constant noise. Others said that they experience health problems caused by disrupted sleep, and some residents described an inability to concentrate on tasks. A common theme was poorer quality of life, with some residents avoiding their decks and yards because the sound is louder outdoors.”
Constant noise can make life miserable for those living within audible range of a data center. The City needs to do additional modeling to estimate the area that would be impacted by low-frequency noise, and the area of audibility of noise overall. Then, the City needs to require specific and adequate project design and mitigation for this issue so the health and quality of life of residents are protected. In addition, mitigation for construction noise should be examined and included in the project. All of this needs careful study in environmental review, specifically an Environmental Impact Statement.
If the impacts cannot be successfully mitigated, this provides further reason to investigate alternative sites for the project.
In addition to noise pollution, light pollution can seriously impact nearby residents. Will the constant artificial lights needed for a 200 acre facility be visible to nearby residents, even within their houses? Light pollution also degrades night sky visibility, impacting the experience of living in a rural community and being able to see the stars and the aurora borealis. The City needs to do an analysis of light pollution and its impact on nearby residents and dark sky conditions.
We are concerned about water resources:
The proposed project area for the data center contains the West Rocky Run, a designated trout stream, which flows to the Midway River, also a designated trout stream. There are 29 additional historic wetland areas included in the project area. While the project proposes some design and mitigations to reduce these impacts in the special use permit application materials, many acres of the sub-watersheds for these waters will be converted to impervious surface along with the elimination of wetlands. This will impact the sub-watershed for these trout streams and the larger Saint Louis River watershed draining to Lake Superior. This again raises the question on whether another site would better avoid and minimize adverse impacts while being feasible for the project.
The City states that the data center will not use water for cooling purposes, and that any water usage for domestic purposes will utilize municipal water/sewer, not groundwater. We ask for full and complete details on proposed water use and impacts of the actual project.
Only a fully completed Environmental Impact Statement will determine how much of an impact the proposed data center will have on Lake Superior.
We are concerned about the special use permit application:
The special use permit application that the City of Hermantown posted to their website includes five required findings that must be made to approve a special use permit at pp. 5-6. The project fails to meet these required findings. For example, the City must find that the project “will not be injurious to the use and enjoyment of the environment, or detrimental to the rightful use and enjoyment of other property in the immediate vicinity of the proposed development.” As described for multiple resource issues above and more, there would be injury to the environment and people living near the project stand to have their quality of life suffer significant adverse impacts that will be detrimental to the use and enjoyment of their properties.
Need more information?
Check out the Minnesota Center for Environmental Advocacy has information on data center issues in Minnesota here.
General information about data center impacts can be found here.