Springfield's 120-day moratorium on data center proposals is being challenged in a lawsuit filed by the developer behind plans for a facility at 2900 S. National Ave. The lawsuit claims the moratorium passed in late June is invalid and has prevented plans from being reviewed through typical informal pre-development processes.
A lawsuit was filed in Greene County Circuit Court against the city on Thursday, Sept. 17, by NSI A1 LLC, managed by Trent Overhue. NSI A1 LLC owns property at 2900 S. National Ave. where Overhue had proposed a "high-performance computing data processing facility" in the basement of one of the buildings.
Through a pre-development review process, city staff stated such a use would not be permitted under the current planned
development zoning, which allows "data processing services" under the use for administrative and Professional Offices, though Overhue disagreed with this interpretation. Days after this review, Springfield City Council first read the special ordinance establishing the administrative pause on data centers.
Lawsuit challenges way data center moratorium was introduced
The 31-page petition filed in court makes several arguments questioning the validity of the moratorium ordinance and asks the courts to weigh in on how the ordinance can be applied to the 2900 S. National project if found to be valid.
The lawsuit argues the moratorium is a zoning action and therefore should have gone through typical zoning process to comply with state law before passage. Because the special ordinance did not go through Springfield Planning & Zoning Commission and did not include a published 15-day notice of public hearing, it claims the matter is void.
The petition filed in court also challenges the moratorium's compliance with the City Charter, which acts as the city's constitution. The lawsuit claims that because theofficially passed piece of legislature includes the words "be it resolved" instead of "be it ordained" and includes a "filed as a resolution" line at the end, it does not follow the enactment procedures required. In all other ways, it was treated as a special ordinance, not a resolution, labeled as such and voted on at two separate meetings. Typically, resolutions are voted on after a first reading.
Even in the case that the courts find the moratorium ordinance is valid, the lawsuit also argues the moratorium does not apply to any ordinary preliminary activities for the project proposed, as they are not part of a formal application process. The lawsuit asks the court to identify the activities outside of the moratorium's scope and an injunction on using the ordinance to obstruct such activities.
The ordinance establishing the moratorium also included a clause giving council discretion to allow the processing of an application of a data center if it determines the application complies with all existing or planned regulations, adequate infrastructure exists and consideration of such an application wouldn't be a detriment to the city. According to the lawsuit, NSI A1 requested "limited relief" under this section on Aug. 17 so the city could accept and evaluate submissions without committing to project approval, but the city has not granted the request. NSI A1 also argues that the inability to have its infrastructure criteria reviewed, with particular foreseeable regulations not yet identified, prevents the developer from fully accessing this process.
According to the petition, the developer filed an electric service application with CU identifying the anticipated demand of approximately 9.9 megawatts for the project but the application was not processed because of the moratorium. The lawsuit also claims that after the moratorium ordinance was passed, the developer was no longer able to pursue pre-development review of his plans, though the city represented that staff could continue to communicate and evaluate items classified outside the data center category. Overhue claims this prevented progress on "ordinary development work" or a meaningful way to seek relief under the exception identified in the ordinance.
Prior to pre-development review, the lawsuit states, Overhue reported that "significant engineering and design work" for the internal load had already begun and is requesting further coordination with City Utilities and the city. The lawsuit also claims the developer has incurred expenses related to the delay in progress.
"Ordinance 28306 [establishing the moratorium] now denies NSI A1 access to the ordinary application process during a short and commercially significant development window," the lawsuit says.
Neither the city nor Chad Mann, the attorney representing NSI A1 LLC, could be reached for comment by publication deadline.
In addition to the challenges to the moratorium itself, the lawsuit also alleges the city has not fulfilled NSI A1's requests under the state's Sunshine Law. According to the petition, the developer sought a plethora of records in late June, including e-mails, texts and calendar records, pertaining to the project, pre-development review, planned development, data center moratorium or "city's related legislative and administrative activity." Some records were provided, while the city quoted a roughly $428 fee for the remainder on July 2. The petition states the developer accepted the quote and asked the city to advise how to make payment, but the city had not responded as of Sept. 11.
Springfield is not the first to be challenged in court for its data center legislation. Overhue, through another LLC, recently also filed a lawsuit against Benton County and its moratorium. He is also involved in the company behind a data center in Webster County.
Springfield's administrative pause is set to expire Nov. 17, though City Manager David Cameron had previously stated an extension was likely. The goal of the moratorium was the allow time for city staff to craft a regulatory framework for data center developments and gather public feedback on such proposals. The city will hold itsthird public engagementsession from 6-8 p.m. Tuesday, Sept. 22, at the Ozark Empire Fairgrounds E-Plex.
Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.
This article originally appeared on Springfield News-Leader: Developer behind Springfield data center plan sues city | Exclusive
