Pennsylvania Data Center Development Boom Pits State Leaders Against Municipalities

As Big Tech companies pour hundreds of billions into data centers to support artificial intelligence, new battle lines are forming in one of the states being targeted most for this development: Pennsylvania. 

President Donald Trump in July joined state leaders and industry executives in Pittsburgh to tout $36B in data center investments and another $56M for related energy projects in the state. 

“You’re going to see some real action here. So get ready,” the president said at the time.

More than 14 gigawatts of data center projects have been proposed in Pennsylvania over the last year, according to a Bisnow analysis. The state today has well below 1 gigawatt of data center inventory, according to Avison Young. 

These massive new projects would support AI for tech firms like Amazon, Google and CoreWeave, and they are backed by Wall Street giants like BlackRock, Blackstone and Brookfield.   

The investment has garnered bipartisan support at the state level. Democratic Gov. Josh Shapiro and Republican U.S. Sen. Dave McCormick both appeared at Trump’s event and support proposals to streamline data center construction across Pennsylvania.

But they are running into opposition at the local level. Some data center opponents are pushing municipalities to pass new zoning regulations that might curtail the industry, while local officials worry the state is removing their ability to decide how their land is used. 

The wave of legislation proposed this summer includes a state Senate bill that would implement universal data center zoning standards across the commonwealth.

Proponents say it would expedite projects slated to bring tax revenue and jobs to deindustrialized parts of the state. Opponents believe it would restrict local control over land use and allow the booming data center industry to reshape communities without their consent.

“Pennsylvania is notorious for taking forever to approve projects,” said Republican State Sen. Greg Rothman, who proposed Senate Bill 939 in July. “We have 3,000 municipalities, 67 counties. They all have different zoning and different regulations … It makes it very difficult to attract developers.”

His legislation includes language that would put data center projects on the same footing as other industrial uses when it comes to local zoning measures. Rothman sees it as an extension of Shapiro’s Permit Fast Track Program, which includes several data center projects.

Rothman’s bill, which has bipartisan sponsorship, hasn’t come up for a vote yet but is already courting controversy for what critics see as an attempt to minimize local control.

“We have major concerns and oppose that language,” said Pennsylvania State Association of Township Supervisors Director of Policy & Research Holly Fishel.

She argued that data centers could have a bigger impact on communities than many other industrial uses due to their noise and light output and 24/7 activity, and municipalities should be able to regulate them separately as a result.

Even one of the bill’s co-sponsors has concerns about its impact on local control. Pennsylvania Sen. Marty Flynn, a Democrat, has proposed an amendment that would preserve municipal authority on this front. He won’t vote for it otherwise.

“If a local area doesn't want to look at that, I don’t think they should have to,” Flynn said of data centers.

Some Republicans agree. Sens. Rosemary Brown and Dave Argall are floating a proposal that would require data center developers to meet with municipal decision-makers before submitting their application.

Rothman said this was unnecessary since it is already a common practice, and Fishel agreed. Municipal-level zoning guidelines are often requested by developers seeking clarity as they craft their proposals, she said.

“The developers want them to provide for it. They may propose their own suggestions,” Fishel said. “You’re probably rarely going to see exactly what developers want.”

She said that is how Amazon ended up planning a data center next to the Susquehanna nuclear facility in Salem Township, Luzerne County, which is ultimately expected to reach a capacity of 960 megawatts.

The municipality about 40 miles southwest of Scranton was one of the first in Pennsylvania to pass a data center ordinance, which Fishel said gave the tech giant the certainty it needed to move in.

Access to the nuclear plant was also a factor. The existence of nuclear power and Pennsylvania’s status as the nation’s second-largest natural gas producer are a big part of what has drawn data center developers to the state, said Avison Young Market Intelligence Analyst Howard Huang.

Two natural gas plants overlooking a trio of small towns north of Scranton have been enticing for data center developers, but officials in those towns have sought to restrict development.

Jessup passed new zoning regulations for the industry this summer, while neighboring Archbald and Blakely are considering similar measures.

The hefty wave of proposals in the three communities, including one that could bring several 130-foot-tall buildings to Jessup, led two Pennsylvania Senate Republicans to hold a public hearing about the trend in Archbald last month.

The new legislation in Jessup limits data center builds to the industrial district east of Casey Highway near the Lackawanna Energy Center natural gas plant, said Council Member Curt Camoni. The goal was mainly to keep data centers away from residential neighborhoods.

“I don’t want it next to my house, so I can’t ask any of my neighbors to have it next to theirs,” Camoni said.

The borough passed data center legislation in 2020 that allowed the developments in mixed-use areas, but Camoni said this was before the industry started developing the hulking complexes now overtaking massive swaths of land nationwide.

“If you look at the campuses that people are looking to build, there’s no doubt in my mind that this is an industrial facility and should be located as such,” he said.

The ordinance was passed unanimously last month, but it wasn’t soon enough to rule out the possibility of a 130-foot data center west of Casey Highway along Breaker Street.

Camoni said shortly after deliberations on the new ordinance began, the developer, which shares an address with Conshohocken-based Catalyst Commercial Development, submitted plans for the complex. This was just in time for the project to be grandfathered in under the previous zoning.

Catalyst didn’t respond to Bisnow’s request for comment.

The proposal is part of a broader trend sweeping Northeast Pennsylvania.

“A lot of what you’re seeing now are landowners who frankly hope they’re holding a winning lottery ticket,” Camoni said.

But there are lots of landowners who think they have won the jackpot, so developers may not need to look far if their plans for one site don’t pan out.

“If a county is less receptive to data centers moving in, you just choose a new county,” said TECfusions Director of Marketing Melissa Farney.

Her company is working on a 1,400-acre data center project in the Pittsburgh exurb of Upper Burrell Township that could ultimately reach 3 gigawatts.

Farney believes municipalities that try to stymie the industry will eventually learn a hard lesson.

“You just choose not to buy land there to build your site, and then the investment goes elsewhere,” she said.

“This market dynamic will happen organically, if counties get very restrictive, and then they see all of the taxes that a data center developer pays to the county next door, and their school system improves over there, and suddenly all of the parents want to move one county down the road to get the better school — this does play out in the long run.”

Dan Rabb contributed to this story.