NC developer sues Chatham County over legality of new data center moratorium
AI-generated summary reviewed by our newsroom.
- Eco TIP West sued Chatham County over a 12-month data center moratorium.
- Eco TIP says it spent over $11 million on a planned 750-megawatt Moncure data center.
- Chatham commissioners unanimously paused permits citing need to update zoning rules.
The developer behind a proposed data center in Chatham County has sued the local government for implementing a 12-month moratorium on new data centers, arguing officials had caved to “community pressure” in approving the pause earlier this year.
In an April 23 lawsuit, attorneys for the Sanford-based company Eco TIP West said their client had already spent more than $11 million on a planned data center in the unincorporated community of Moncure when Chatham passed its moratorium in February. Eco TIP seeks to build a 750-megawatt data center, the lawsuit stated, which would include cryptocurrency mining. For comparison, the recently withdrawn data center project in the nearby Wake County town of Apex was slated to be only 300 megawatts.
Chatham commissioners this winter unanimously voted to stop issuing permits for data centers and cryptocurrency mines, saying they needed more time to update zoning rules and study the impacts of these energy- and water-intensive facilities. Theirs was the second North Carolina county to pause data centers, and a growing number of communities statewide have since set similar moratoriums, including Apex, Wendell and Orange County.
Demand for data processing and storage facilities has surged nationwide due to artificial intelligence, but the trend has collided with many residents’ desires to keep data centers out. “There’s a freight train coming down towards us, and we need to figure out how to handle it,” one Pittsboro resident told the Chatham County Board of Commissioners during the Feb. 11 special hearing on the one-year moratorium.
Eco TIP is managed by Kirk Bradley, owner and CEO of the real estate firm Lee-Moore Capital Company. Its Moncure land, called TIP West, is part of a broader megasite 30 miles southwest of Raleigh that contains a FedEx facility and the promised VinFast campus. The firm is being represented by the Raleigh law firm Smith Anderson, which filed the lawsuit in Chatham County Superior Court.
It appears to be the first case to challenge a data center moratorium in North Carolina.
One big zoning permit question
The lawsuit attacks Chatham County’s moratorium through multiple claims. First, Eco TIP said state law does not authorize local governments to set development moratoriums on “new zoning regulations,” nor should a moratorium stand if it is destined to lead to longer-term regulations that violate the state’s new limitation on down-zoning.
But even if Chatham County was within its rights to suspend data center permitting, Eco TIP argued it should be excluded from this pause due to the status of its project. North Carolina law says moratoriums don’t apply to projects with outstanding building permits or when “substantial expenditures have already been made in good-faith reliance on a prior valid development approval.”
In its lawsuit, Eco TIP said it has made “substantial expenditures and taken other significant steps” toward developing the data center over at least four years. The company has not completed any vertical construction on the site, but listed spending nearly $7 million on site infrastructure and $2.5 million on a wastewater treatment plant decommissioning.
The plaintiffs seek for Chatham County to pay financial damages and attorneys’ fees in addition to allowing the project to move forward regardless of the moratorium.
On Oct. 29, the Chatham County Planning Department issued Eco TIP a “Zoning Interpretation” that states the developer would have the right under current ordinances to build a data processing facility on the Moncure site. Eco TIP called this a “zoning permit” throughout its lawsuit, a description Chatham County rejects.
“We look forward to defending the County’s decision to impose a temporary moratorium on data centers while the County develops zoning regulations for these intensive land uses,” Chatham County attorney Emily Meeker wrote in a statement Monday to The News & Observer. “This is important to protect the environment and the quality of life of Chatham County residents. The County legally enacted the moratorium and is properly enforcing it.”
