AUSTIN, Minn. — About 100 people showed up to get the basics on
— the new development topic that’s sweeping the region.
Hosted by the Southern Minnesota Initiative Foundation (SMIF), the educational event on Wednesday, Jan. 14, 2026, at the Jay C. Hormel Nature Center in Austin was designed to help community leaders and residents understand what data centers are, and how they might fit into a community.
“The education component is critical,” said Benya Kraus, president and CEO of SMIF.
That applies not only to residents of communities considering a data center development, she said, but the community leaders who are working with developers to bring a data center — a light-industrial business that comes with large requirements in water and power usage — to their town.
Jon Radermacher, city administrator for Cannon Falls, agreed.
Brian Todd / Post Bulletin
Radermacher, whose city has already approved a preliminary plat and development agreement for a technology park that is set to be the future site of a hyperscale data center, was one of the six panelists who presented information on data centers to the attendees. He was also a panelist at a December event, and attended another data center forum held in Mankato.
At Wednesday’s forum, Radermacher said people wanted to know more about the regulatory environment around data centers, and how to conduct an alternative urban areawide review (AUAR), which is a type of environmental review that can be used to set the parameters of a data center development.
Radermacher said because of the demand to build data centers right now, cities are in the driver’s seat when it comes to development agreements.
“I think there’s another belief that there’s always these incentives (tax-increment financing or tax abatement to benefit the developer), and you don’t have to do that,” he said.
When Cannon Falls was first approached by developer Tract to build a data center in the town, what the developer wanted from the city, verses what the city was prepared to give were miles apart. The final development agreement, he said, was much closer to the city’s original postition.
“I would say to any other communities that are doing this, know that is the case,” Radermacher said. “You have much more power to negotiate.”
Bill Schimmel said he believes it’s only a matter of time before a developer comes proposing a data center for the city of Stewartville, where he serves as city administrator. He believes this because the Minnesota Department of Employment and Economic Development has said as much.
That, he said, is why he and Mayor Jimmie-John King made the trek to Austin on Wednesday.
While there could be hurdles if and when the city is approached, Schimmel said — land use being a main issue, since land used for a data center might otherwise be used for other development purposes — he also sees the benefits. Mainly he liked what he heard about how data centers can add to a city’s tax base.
“The tax base, if that stabilizes your budgeting process for years to come, that helps other businesses, it helps the residential folks,” Schimmel said.
Elise Harrington, a professor and researcher from the University of Minnesota’s School of Public Affairs, said Loudoun County, Virginia, home to several data centers, claims 39% of its taxes comes from just 3% of the county’s land.
She echoed Radermacher in saying cities should not give up too much when negotiating development deals.
Trisha Sieh, a civil engineer and vice president at Kimley-Horn, and engineering and design firm, said she’s worked on data center projects for 14 years. The demand to build them — especially the larger hyperscale data centers — has never been greater. Data centers, she said, are used in everything from running your smart phone and streaming your entertainment to national security, robotic surgery and driving autonomous vehicles.
“Data centers are the nodes of the modern digital highway,” Sieh said.
Brian Todd / Post Bulletin
One of the problems she sees with people opposed to data centers today is that they are using old, outdated information when they argue against them. Today’s data centers use less power, less water, and cleaner, quieter backup power generators, she said.
Not everyone was singing the praises of data centers and the rush to develop them. Kathryn Hoffman with the Minnesota Center for Environmental Advocacy, said her organization has filed several lawsuits trying to have more stringent environmental review for data centers.
The problem, Hoffman said, is there’s no single agency that oversees the permitting of data center projects. So, a person who wants to understand more about issues such as backup generators, air quality, water usage and water quality, and power demands might need to visit with three or four state agencies. And not all of those agencies will hold public comment periods for a particular data center project.
Hoffman said instead of conducting an AUAR to set the parameters of a data center project, it would better serve the public if the state required an EIS — and environmental impact statement — for data centers.
“What’s happening is it creates a very challenging process for transparency,” Hoffman said. “It’s hard for the public to get involved on the myriad of issues.”
