NORTH MANKATO — The Minnesota Center for Environmental Advocacy has filed a lawsuit against the city of North Mankato, alleging the city violated state environmental laws while moving forward with plans for a massive data center development.
The legal action, filed by MCEA in Minnesota’s 5th Judicial District Court, argues the city failed to adequately disclose or study the true nature of the project, a potential 250- to 500-megawatt hyperscale data center campus, during its environmental review process.
At the center of the lawsuit filed Tuesday is a proposed 4 million-square-foot project known as “North Mankato Industrial.” Publicly, city officials have described the project using general terms such as “technology park” or “office/warehouse.” However, internal city communications cited in the lawsuit show that Community Development Director Mike Fischer and other officials discussed the project privately as a data center, those of which now increasingly store data for artificial intelligence models across the country and are capable of consuming vast amounts of electricity and water.
Email correspondence between Thomas Lambrecht of Great River Energy and Fischer, dated March 11, shows an attached document describing the property as a possible “data center campus.”
The advocacy group argues the city used the state’s Alternative Urban Areawide Review process, or AUAR, in a way that conceals the actual purpose of the development. The AUAR is a planning and environmental review tool intended to evaluate broad development scenarios in a given area. But according to MCEA, when a specific, high-impact project is planned, such as a data center with enormous infrastructure needs, state law requires more detailed disclosures and environmental analysis than what North Mankato provided.
Evan Mulholland, an attorney at MCEA, told The Free Press that residents are frustrated with the lack of transparency between city governments and their citizens.
“They didn’t do the environmental review that’s required by law,” Mulholland said. “They didn’t even identify what the impacts might be, and they definitely didn’t do any in-depth analysis that’s required by law. We know that there’s potentially big impacts on water supply. I know that the aquifer, particularly the North Mankato aquifer, that’s drawn from for residential use, is constrained, and there’s also going to be big impacts on our climate from the power that they’re going to need.”
North Mankato City Administrator Kevin McCann told The Free Press the city had only been served a few hours prior to his comments, and the next steps are to work with legal counsel and the city attorney.
“I’m surprised because the process was open and transparent,” he said. “We were transparent in what’s required for an AUAR and what was proposed in the AUAR is very broad, just because they don’t know what’s being developed. There were two scenarios: One was a technology center and the other was a warehouse, and we have proposals for neither; both are being looked at equally.”
In court documents, MCEA argues the city’s review lacked essential information about the project’s environmental footprint. While the document estimates water usage could reach up to 30 million gallons per day, it includes no modeling of how that might impact the protected Mount Simon-Hinckley Aquifer, a vital groundwater source.
Some North Mankato residents have long questioned the city’s communication around the project. At a May 19 City Council meeting, resident Tom Hagen asked whether the city was still bound by a non-disclosure agreement with a private real estate firm involved in the project and whether officials were actively seeking changes to state water-use laws. In a follow-up email dated May 28, Fischer confirmed the city remained under an NDA with a company that helped fund the AUAR and was indeed lobbying to modify state statute to allow for increased water withdrawals from the Mount Simon-Hinckley Aquifer.
“We are in a unique position where we have large amounts of land for development and large amounts of electricity to accommodate data centers,” Fischer said in an email to Mayor Scott Carlson on Sept. 12, 2024. “We simply need additional water to accommodate them. Note, that these are billion dollar investments.”
Energy demand also was understated, according to the suit, with the AUAR estimating just 80,800 megawatt hours of electricity consumption annually, even though internal records suggest the development could require as much as 3.7 million megawatt hours per year — over 45 times more consumption than stated in the review.
The lawsuit states the AUAR contains little or no analysis of potential air emissions from on-site power generation, noise from cooling systems and generators, or light pollution from a facility that would likely operate 24/7.
Kathryn Hoffman, CEO of MCEA, said this has undermined the public’s ability to engage with and understand the implications of this project.
“Minnesotans have a right to know where the energy will come from to power these massive facilities and how our clean air, drinking water and quality of life will be protected,” Hoffman stated in a press release. “Without answers to these basic questions, Minnesota can’t fully weigh the pros and cons of whether these developments are right for our state. Our laws require more transparency, and Minnesotans deserve it.”
The lawsuit seeks to stop all permitting and project approvals until a legally sufficient environmental review is conducted, and said the court should block any final decisions related to the development until that review is completed.
The North Mankato lawsuit is one of two recent legal actions filed by MCEA targeting the use of the AUAR process for large-scale data centers in Minnesota.
A similar case was filed against the city of Lakeville, raising broader concerns that cities across the state are using AUARs to approve complex and resource-intensive projects without full public engagement.
“Surprisingly, the descriptions of these projects are so unclear that it’s hard to even know what is being proposed, let alone what the impacts might be,” Hoffman said in the release.
“These documents do not promote the type of robust transparency that Minnesotans expect from our government about facilities that are proposed to be built in our communities.”
A court hearing has not yet been scheduled. In the meantime, the future of the North Mankato Industrial project remains uncertain.
“I think the message that we are sending to both data center developers and developers in general is you can’t skip over environmental review,” Mulholland said.
“It’s an important part of our democracy for people to know what’s being proposed and how it is going to impact us before we collectively, through our democratically elected representatives, approve something as big as this.”