Sioux Falls, South Dakota: 200 Residents Tell City and County Officials to Slow Down on Data Centers

About 200 residents filled a joint meeting of the Sioux Falls City Council and the Lincoln County Commission on Tuesday evening, and most of them came to say the same thing: they do not want a hyperscale data center in or near their city, and they want local rules written before one arrives.

The Argus Leader reported that Sioux Falls city councilors and Lincoln County commissioners still did not have a clear answer for residents on how a data center inside the city would benefit the people who live there. The meeting was the latest step in a local fight over the proposed Gemini Data Center, and it put elected officials from both governments in one room with the residents who will live with whatever they decide.

The Gemini proposal

The Gemini Data Center is a proposed 500 megawatt hyperscale data center on 164 acres at Sioux Falls Technology Park, near Veterans Parkway and East Rice Street. The Argus Leader noted that it has nothing to do with Google's Gemini product. Gemini Data Center SD LLC is tied to Gemini Family Office, based in California. Gemini would own and manage the land, and an end user would construct the data center.

The exact status of the project is unclear. In April, Gemini Capital founder Michael Anvar told the Argus Leader by email that the project was still alive, even after setbacks in the South Dakota Legislature on large tax breaks for data centers. South Dakota Public Broadcasting reported that the Legislature denied a state level sales tax exemption for data centers last year, a point that has shaped the whole local debate: companies have said they may not come without the exemption, while residents are asking why a project that needs public breaks should be rushed through local permits.

What residents asked for

Lincoln County Commissioner Joel Arends, from District 1, summed up the mood after hearing the room. He said it is interesting that in a country where nobody gets along on anything, data center opposition is the exception, and that it does not take a rocket scientist to figure out what the community is telling its officials. People at the meeting told him to impose a moratorium and to prohibit the use of non-disclosure agreements, he said, and they want sensible regulations in place to prevent another Gemini project from arriving before the rules exist. The community, he said, is prioritizing quality of life over the perceived or real benefits of a data center.

That ask is not new. On October 5, a coalition that included South Dakota for Data Center Transparency, Let Sioux Falls Vote, Dakota Rural Action and community residents asked the city for a temporary moratorium on data center building permits until ordinances are in place, South Dakota Public Broadcasting reported. Matt Breyfogle, a founder of South Dakota for Data Center Transparency, warned that a project already moving through the process can argue it plays by the old rules, so protections written next year could miss the one project that started the conversation. The coalition said the Gemini project has already gone through the zoning process and next faces city permitting requirements.

What the city does next

The City Council has formed a Regulatory Oversight Committee to study data center rules and take public input. The Argus Leader reported that the committee includes councilors Sara Pankonin, James Oppenheimer, Ryan Spellerberg and Rich Merkouris, and that it will hold public input meetings at Carnegie Town Hall on November 9, November 30 and January 4, all at 6 p.m. Residents can send ordinance recommendations and supporting material until November 27. The committee is scheduled to present what it learned to the full council at an informational meeting on January 12.