Lawsuit Prompts Minnesota to Review Data Center Project - GovTech

State Agency Oversees Environmental Review in Google Data Center Settlement

For the first time in Minnesota, a state agency will oversee the environmental review of a data center project under a settlement agreement announced Wednesday, halting construction on a massive proposed technology campus in rural Pine Island until regulators complete a rigorous evaluation.

Lawsuits Halt Project Skyway North of Rochester

Work on the 482-acre technology campus known as Project Skyway—which includes an 88-acre site featuring a 250,000-square-foot data center proposed by Google and developer Ryan Companies US—cannot begin until the Minnesota Pollution Control Agency finishes the review. The settlement resolves lawsuits brought against the city of Pine Island and Ryan Companies by the Minnesota Center for Environmental Advocacy. In its legal filings, MCEA argued that city officials used a hasty, streamlined process to approve the industrial project in May 2024 without properly gauging how the facility would impact the surrounding community of roughly 3,500 residents located about 18 miles north of Rochester.

The controversy surrounding Project Skyway reflects a broader statewide debate over digital infrastructure. As massive cloud computing and artificial intelligence hubs demand unprecedented amounts of water and energy, communities across Minnesota have pushed back against secretive planning. According to reporting from the Minnesota Center for Environmental Advocacy, similar patterns played out in North Mankato, where city officials advanced an Alternative Urban Areawide Review for a vaguely defined 4 million-square-foot technology park before public records revealed a hidden data center plan.

Scrutiny Over Transparency and Environmental Demands

Pine Island residents expressed frustration over initial secrecy, including non-disclosure agreements signed by city officials and a lack of clear disclosures from Google regarding exact energy and water requirements.

Supporters of the development maintain that Project Skyway will include environmental protections, including more green space than required by city ordinances.

“We feel it’s really important that the state get involved because there are statewide implications for things like water and our energy grid and our electricity bills.”

Environmental Review Process and Public Comment

Under the terms of the settlement, MCEA agreed to drop its lawsuits, while Google and Ryan Companies agreed to undergo the state’s Environmental Assessment Worksheet process. This evaluation requires developers to provide extensive data on at least 16 different community and environmental concerns, including noise, light pollution, and intensive resource consumption.

The review mandates a 60-day public comment period open to residents across the state. Once the MPCA reviews the mitigation plans, Pine Island must formally accept them before any construction can proceed. While previous agreements between the city and developers remain intact, local resident and “Stop the Pine Island Data Center” group member Aubree Derksen noted that the settlement provides the answers and protections residents initially demanded.