'Playing Catch-Up': Rising Backlash Forces Data Center Developers To Rethink Community Strategy

The number of data center projects canceled as a result of community pushback nearly tripled in 2025, and the pace only accelerated as the year went on.

As hundreds of billions of dollars are directed toward building new data center projects, industry advocates are raising alarm bells that investors and developers need stronger communications strategies, or they risk continued — and increasingly costly — backlash.

“The data center industry is still playing catch-up in that respect,” said Adam Waitkunas, co-founder of Milldam Public Relations. “The industry is really behind in having a dedicated strategy to alleviate this, and a lot of them are learning that, with lawsuits and different ballot initiatives, they’re ill-prepared.”

Last year, 25 data center projects were called off after communities protested, with 21 of those coming in the second half of the year, according to climate and energy publication Heatmap. Just six projects met that fate in 2024, although the annual increase can be attributed in part to the growth in the number of projects proposed.

As of January, 99 of the 770 planned data centers across the country are being contested by some combination of activists and residents. Roughly 40% of projects that face sustained local opposition get canceled, according to Heatmap. 

In the last week, a Virginia Appeals Court judge upheld an August ruling against the massive Blackstone-backed Prince William Digital Gateway project, and HMC StratCap withdrew plans for a development in Monterey Park, California, after local pushback.

Meanwhile, companies from REITs to Big Tech are busy announcing a seemingly endless stream of new data centers from coast to coast. The data center construction pipeline in the U.S. reached $1.7T as of February, according to RCLCO estimates.

The data center industry is used to being under the radar and was caught off guard by what has become bipartisan backlash and a new center of NIMBY pushback, Waitkunas said.

“Whether they come in from the power side, the energy side or from the real estate development side, many folks think they don't need a strategy or a plan,” iMiller Public Relations founder and CEO Ilissa Miller said. “We know what we're doing. That's the biggest death knell, folks that don’t understand that it’s political these days.”

Industry experts suggest viewing these efforts to land community approvals as something akin to a political campaign, with a vigorous ground game starting a year or more before votes for entitlements and rezoning, including detailed analysis of local media, social networks and community leaders. 

The issue has become a potent rallying cry, especially for Democrats in the lead-up to the midterms, with many successful candidates making the issue a centerpiece of their campaigns, including in the race for the Georgia Public Service Commission, one of the largest examples of Democratic overperformance.

Opponents have had success arguing about hyperlocal quality-of-life issues, assembling large coalitions in the process.

Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez have come out in favor of banning new data center developments, and advocacy groups — an estimated 125 spread across 24 states — have launched campaigns against data center expansion.

In response, the services these firms offer include media relations, press releases, ghostwriting, thought leadership, white papers and organizing town halls.

Some even create sentiment tracker dashboards that show and rate media hits and local feedback to measure positive and negative sentiments. Milldam launched a service on April 2 to help craft community benefit agreements that better appeal to local residents.

In some cases, these efforts lead to legislative change.

Miller worked on a development in Maryland for the firm Quantum Loophole, which partnered with TPG to push a master-planned data center on a 2,100-acre site it bought in 2021. 

During the approvals and early development process, community groups raised concerns about damage to local watersheds and overtaxing the local grid. Maryland law also restricted backup generators, which led one tenant to back out of the project. 

Miller and her firm then launched a strategy of reaching out to educate local government, media outlets, and business and community organizations, an effort she now calls a “groundswell program.” 

Eventually, she started pushing a talking point: If the state allowed hospitals to have generators, why not data centers, another piece of critical infrastructure? The campaign eventually helped a 2024 bill pass in the state legislature allowing for backup generators at data centers. Quantum Loophole would later leave the development due to legal disputes, but a data center project facing significant opposition was eventually pushed forward. 

While they won’t talk about or name the bulk of their clients, firms like Miller’s represent all manner of developer. 

“Our clients want to engage the community and establish a social license to operate to prove they are the good neighbor they promised to be,” said Dean Perrine, chief experience officer for JSA, a data center public relations firm. “By partnering with a community engagement team, developers move beyond corporate claims and focus on making their impact tangible, transparent and sincere for local residents.”

These campaigns have become more challenging as communities have become more protective of resources, including water and land, and warier of strains on the power grid that can impact electric rates. 

Whereas many of these projects would sail through local approvals just a few years ago due to the property tax revenue they provided, Waitkunas said, now community groups and residents are getting officeholders to think twice about approvals. Many have been recalled for supporting these developments or have backed moratoriums to block their construction. 

Miller said she hires locals to make sure she gets a good understanding of the community.

“That's why this community engagement is very important, to get a pulse of the rank-and-file citizens and develop coalitions in town, and also find sympathetic voices to essentially be ambassadors on the ground,” she said. 

The key challenge is what Perrine referred to as educating the public and bridging the understanding gap. He said it is important for JSA’s staff to “understand a community’s unique DNA and priorities,” plus the local causes or nonprofits that would be beneficial to support. 

As community resistance makes site selection harder, Milldam launched a data center risk and readiness service that evaluates local political sentiment and opposition. The goal is to give developers early intelligence so they can avoid areas where entrenched pushback could create costly delays.

This process includes scanning and analyzing social media, researching reactions to prior developments, and leveraging groups on the ground like local utilities or chambers of commerce. Weekly papers and their editors also still carry sway in rural swaths of the country.

What the industry needs is a third-party group providing national media and messaging strategy for the industry, along with more effort toward transparency and better outreach to communities, Waitkunas said. 

“You're not going to win over everyone,” he said. “You're always going to have the skeptics. But if you can neutralize some of those arguments, that goes a long way, because you don't have angry folks coming up because they feel misled.”