City Council Meeting Date: September 15, 2026
To: Mayor and Members of Council
From: Scott Wopata, Community Development Director
Mathias Hughey, Interim City Planner
Title
Discussion of Text Amendments Related to Use-Specific Standards for Data Processing Facilities in the Land Development Code.
Body
Action Requested:
The Northfield City Council is asked to review and provide direction to staff on an ordinance amendment modifying Section 2.9.14(B)(6)(b) of the Land Development Code to establish a 200-foot setback for data processing facilities from existing or planned parks, trails, and other recreational features. Because public comment and Planning Commission recommendations are in conflict with previous policy and direction from City Council, staff are looking for direction related to the proposed text amendment and the alternative options. Specifically, what information will councilors need to feel informed and able to make a decision on the proposed text amendment?
This topic is planned for two meetings. The first is a work session to facilitate focused discussion for Council and provide direction to staff on what information will be needed by Council. The second meeting, likely October 6, 2026, will prioritize public comment and informed decision making.
Summary Report:
Context
This staff report is specifically focused on the proposed text amendment related to a setback that applies to data processing facilities. This is the text amendment that was publicly noticed and planning commission was asked to provide comment. Data processing facilities (“data centers”) more broadly are at the center of national debates and discussions. Staff will present some of this larger context in the attached presentation and discussion, specifically related to potential alternative actions. Indeed, the negative externalities of unregulated data center development have been well documented. Northfield’s Land Development Code and associated use-standards are aimed at addressing and regulating these specific concerns. This is a work session without action.
Background
In late 2024 the City Council adopted Ord. 1071 modifying portions of the Land Development Code specifically related to industrial development standards, cannabis-related uses and regulations, and regulations for Data Processing Facilities - commonly referred to as “data centers.” Included in that ordinance was a setback requirement for data centers of 3,950 feet from “existing or planned parks, trails, and other recreational features.” When this requirement is applied to the City’s adopted Greenway Systems plan, it effectively renders all of the land within the City off-limits to data centers.
Staff have been unable to identify any planning, environmental, safety, engineering, or operational rationale supporting this specific distance. Because the direction and intent of the regulations was not to prohibit data centers, but to allow them where they could meet standards consistent with the City’s vision and values, staff have identified this setback requirement as an unproductive barrier, and inconsistent with policy direction. This self-contradiction in policy is bad practice, creating confusion and undermining both intended policy outcomes and the credibility of the city’s zoning regulations. Staff’s proposed text amendment retains the original policy intent while addressing the specific regulation that undermines that intent.
Ordinance 1071 was adopted following an interim ordinance which temporarily prohibited development in the Northwest Industrial Area while standards specific to data centers, and other uses, were developed. The adopted standards for data centers developed specifically for Northfield incorporating findings of the consultant and staff analysis as well as addressing significant input from the public include requirements that directly address noise, water use, electricity use, the reuse of buildings, electronic component recycling, lighting, buffering and screening, and other negative impacts associated with data centers. A setback is a common requirement designed to indirectly address many of the same concerns. The utility and necessity of a setback is reduced when impacts are regulated directly.
At the August 20, 2026, Planning Commission (PC) meeting, the PC held a public hearing and considered a resolution on a proposed ordinance amendment that would reduce the 3,950-foot setback to 200 feet, a distance that matches the setback required from any residential use.
Planning Commission Recommendation
The PC discussed the setback requirement, but did not provide a recommendation related to the proposed setback amount. Instead, the PC voted 6-0 with 1 member absent to recommend that the permitted use table in the Land Development Code be modified to make data processing facilities a prohibited use in every zoning district. The PC also voted 6-0 to recommend a potential classification of data processing facilities into tiers based on energy consumption, with the intent to permit small- and medium-sized data centers. This new classification could then be considered as part of the Land Development Code update in 2027.
Public Comment
The public comment received on the proposed text amendment was generally related to data center development more broadly rather than specifically to the setback. Concerns raised by the public mostly reflected those received in 2024, and specifically included noise, lack of jobs, impacts to consumer energy prices, impacts to aquifers and water supply, air quality, e-waste, impacts to other natural resources including the Cannon River, requests for information related to any proposed or potential projects including non-disclosure agreements signed by staff or other city officials, financial incentives, short and long-term economic benefits especially where incentives were involved, and the use of data centers for morally-objectionable operations such as AI-generated materials, military operations, or surveillance-based policing.
Many of these concerns are rational and based on well-documented negative externalities of data center development in other communities. Unregulated data center development has been found to use exorbitant amounts of water and energy, deteriorating water quality and increasing local utility rates. Excessive noise, vibration, and other concerns have been shown to be detrimental to quality of life for some communities. Many of these concerns are not exclusive to data centers, however, and the history of industrial uses polluting and negatively impacting surrounding communities and environment is one of the basic premises of zoning regulations. Unregulated industrial development has historically been problematic. While moratoriums on industrial or data center development are one tool, often specific regulations and enforcement are a more effective tool. Historically, these impacts were mitigated by separation, hence “zones” and setbacks. As technology and environmental regulations have improved, some impacts can now be effectively regulated directly. Noise, light, and air quality, for example, can all be objectively measured. Northfield’s current land development code and use standards set a higher bar for data center development than any other industrial use.
Some of the concerns received from public comment are beyond the authority of the Land Development Code, or even the City. Electric and power rates are set at the state level by the Public Utilities Commission, for example. And the end-use of the compute capacity within a data center would likely be beyond the capacity of the City to enforce or monitor. City policy related to non-disclosure agreements (NDA), financial or tax incentives, and ensuring a transparent development process are additional topics of concern. There are not any NDA’s signed, financial or tax incentives have never been considered (ie: Data Center developments are not eligible for TIF or other financial assistance), and the intent of bringing this text amendment forward now is focused on transparency to ensure it isn’t related to any specific project or development.
Staff’s Original Recommendation
Staff recommends amending Section 2.9.14(B)(6)(b) as follows:
Data processing facilities shall be located on land with a minimum acreage of 25 acres in size, at least 3,950 200 feet from an existing or planned park, trail, or other recreation feature, and the use shall be within a structure that is at least 200 feet from any residential dwelling.
A 200-foot setback from parks, trails, and recreational features provides a more reasonable and administrable separation standard. This distance maintains a buffer between data processing facilities and recreational amenities while allowing industrially guided and zoned properties to remain viable for development. The 200-foot standard is also consistent with the existing ordinance requirement that data processing equipment be located at least 200 feet from residential dwellings.
Keeping the 3,950-foot setback would prevent data processing facilities from locating on all industrially zoned properties, even though this use has specifically been permitted. This would limit how industrially zoned land can be used and could reduce future investment and economic development opportunities.
The proposed amendment keeps the overall purpose of the data processing facility standards while correcting a setback that staff could not support. It provides separation from nearby parks and trails while allowing industrial property to remain available for development.
The map in the PowerPoint provides a visual representation of how an industrially zoned property in Northfield would be impacted by various setback requirements from an existing trail. This visual is meant to encourage thoughtful discussion about what an appropriate setback might be for parks, trails and recreational features, but at this time staff is recommending the 200-foot setback for reasons stated in this report.
Recommendation:
Staff recommends approval of the ordinance amendment modifying Section 2.9.14(B)(6)(b) to establish a minimum 200-foot setback between data processing facilities and existing or planned parks, trails, and other recreational features. The amendment corrects a standard for which no documented rationale exists while ensuring continued protection of recreational amenities through reasonable separation and the ordinance’s existing site design, screening, landscaping, and performance standards.
City Plans & Policies Relevance:
The Comprehensive Plan establishes seven guiding values that policy decisions should be checked against, asking how an option furthers at least one if not several of the values while not damaging the others. Those values are Creativity, Economy, Homes, Resilience, Mobility, Equity, and Connect.
The proposed text amendments promote economic development by easing a regulation that has been identified as unreasonably inhibiting industrial growth. The existing use-specific standards were developed to be consistent with the Comprehensive Plan and other applicable plans and policies.
The change specifically aligns with Actions 4-1.1, 4-3.4, and 4-8.6 of the Comprehensive Plan, which pertain to economic development and revision of regulatory burdens to encourage economic development.
Alternative Options:
Staff will review alternative options in more detail as part of the presentation and discussion during the work session. Besides approving an ordinance amending the specific setback, Council could:
1. Implement no change(s), maintaining the current setback
2. Direct staff to draft an interim ordinance (moratorium) temporarily prohibiting data centers while additional revisions are developed
3. Permanently prohibit data centers as a use
Financial Impacts:
NA
Tentative Timelines:
August 5, 2026 - Public Hearing Notice Published in the Northfield News
August 20, 2026 - Public Hearing and Planning Commission Recommendation
September 15, 2026 - Council Work session discussion and staff direction
October 6, 2026 - Planned First Reading at City Council
TBD, 2026 - Second Reading and Approval of Summary Publication
TBD, 2026 - Summary Publication in the Northfield News
TBD, 2026 - Ordinance goes into effect