Minneapolis City Council Votes to Restrict New Downtown Data Centers

Minneapolis City Council members voted 7-6 on Thursday to restrict new data centers to existing downtown buildings while requiring larger operations to purchase renewable power, KSTP reported.

Under the approved rules, a new data center can occupy up to 50,000 square feet for servers, or up to 150,000 square feet if the operator signs up to buy renewable power for all of the electricity it uses, according to the ordinance.

Yesterday, Council Members brought forward a ban on data centers in Minneapolis. We also fought to strengthen the ordinance, including an amendment to protect residents’ voices in deciding whether data centers belong in their communities. Both amendments failed by just ONE vote. pic.twitter.com/pt8RpAGECE

— Post by @robin4mpls on X

The legislation also mandates that any new facility must locate inside a building standing as of January 1, 2027, featuring at least one other main use. Servers cannot occupy the first or second floors, and installations must maintain a distance of at least 100 feet from any home on a nearby property.

Debating Downtown Space and Economic Growth

Supporters of the restrictions argued that downtown real estate should prioritize human activity over server racks.

“We don’t need more computers in our downtown,” Council Member Soren Stevenson said, according to MPR News. “We need people down here, and so I want to fight for a vision where people are thriving in our city, not for a vision where stockholders are thriving in our city.”

Other council members highlighted the need for commercial tenants in a struggling downtown office market.

“Do data centers drive a lot of permanent jobs? No. Do they drive more jobs than vacant space? Absolutely,” Council Member Elizabeth Shaffer said, according to MPR News.

American Energy Leadership Institute President Chris Johnson criticized the move in a statement to the Daily Caller News Foundation.

Minneapolis City Council votes on data centers — KARE 11

“Democrats spent the election promising affordability and are already finding new ways to make their communities poorer,” Johnson said. “The AI boom represents an enormous opportunity to attract private investment, expand the tax base, and finance new power generation. Minneapolis Democrats seem determined to make sure somebody else gets all of that.”

Grid Impacts and Regional Moratoriums

Xcel Energy said that it has served data centers in downtown Minneapolis and elsewhere on its distribution system for more than 15 years, noting that new loads can help spread fixed system costs across a broader number of customers.

Darren Nelson, a policy fellow at the Minnesota-based Center of the American Experiment, argued that the city is attempting to force data centers into empty office and commercial buildings.

Minneapolis City Council to vote on data center plan — KARE 11

Minneapolis is not alone in hitting the brakes on digital infrastructure. Oakland’s City Council voted unanimously on Tuesday to extend its own pause on new data centers until October 2027, joining cities like Richmond and San Francisco in pausing or restricting such developments.

The Minneapolis City Council plans to meet again on November 20 to take up a possible veto, while the city’s current six-month moratorium on data centers is set to expire on November 21.