One of the largest and most powerful hyperscale data centers in the world is being proposed for the heart of rural Oldham County in Kentucky, but facing stiff opposition from residents who fear its size and various forms of pollution will wreck what makes the area a great place to live.
The company behind the massive, 2 million square-foot complex of high-power consuming digital infrastructure equipment is promising the “economic pillar” will be a financial windfall for the county, but local critics are highly skeptical. They accuse the company of skirting zoning ordinances by designating itself as a “private utility” so it can build heavy industry on agricultural land, bypassing the normal rezoning approval from the county’s elected fiscal court.
Though Republican leaders in Frankfort pushed through new tax breaks in March to lure data centers to Kentucky — including House Speaker David Osborne, whose district would house the project — one of the chief critics of the project in Oldham County is its own GOP state Sen. Lindsey Tichenor.
“It's a way to abuse the system and prey on a community that's not prepared for hyperscale data centers,” Tichenor said. “It is an absolutely horrible location.”
Western Hospitality Partners announced in March it acquired 267 acres of farmland and plans to build a complex of data centers there — eight buildings, each with more than five acres of interior space and standing 75 feet tall.
Data centers house computer servers that store and process data for things like cloud storage, streaming platforms and artificial intelligence. The“hyperscale” ones built in recent years are unique for their massive size and scale, requiring vast amounts of power to run them and water to cool them down.
Western Hospitality Partners says the data center will eventually use 600 megawatts of power — which is slightly smaller than what is billed as the world’s largest data center in Nevada. That amount is roughly 10 times what all of Oldham County currently consumes, or put another way, it is capable of consuming nearly all the electricity produced by Louisville Gas & Electric’s 624 megawatt Cane Run power plant in Louisville.
The company also says it will invest $6 billion in the project, which would make it the single largest economic development project in the history of Kentucky. Its website promoting the data center says it will bring $51 million of annual tax revenue to the county and hundreds of jobs — thousands during the construction phase — while the massive structures will have “almost no impact on the community.”
But these lofty promises have not won over the locals so far. Residents question their accuracy, the methods the large tech company has used to steer its approval through local government, and what company would be the ultimate end user of the data center — which has yet to be revealed.
‘Who wouldn’t want to live out here?’
The proposed site is a few miles north of the tiny downtown of LaGrange. Neighbors have lined the two-lane roads leading to it with yard signs opposing the data center project, reading “Keep Us Quietly Amazing.”
We Are Oldham County is a newly formed group behind the signs. It’s picked up thousands of members and petition signers in the weeks following the data center’s announcement.
The group was formed by Nate Oberg, whose home, and that of his father next door, borders the proposed site. He grew up on his father’s property and moved back to Oldham County a decade ago, buying the adjoining property.
Oberg showed the property to Kentucky Public Radio in early May. He stood on the edge of his father’s land and looked out at the long patch of farm land that stretched ahead as far as the eye could see, lined with trees. Several wild turkeys skirted by, while the sound of birds chirping filled the air.
“We came back here to raise our kids,” Oberg said. “Who wouldn't want to live out here? It’s pretty peaceful.”
The area Oberg was looking at is now the proposed site of the data center — which he said would completely transform its sounds, sights and smells. That includes 24/7 security lighting and fans running, 150 loud generators that can burn close to a million gallons of diesel fuel a day, and what could be up to 10 years of construction, with more than 1,000 workers bringing in materials through the area’s narrow roads.
“The last of the eight buildings would be right in front of us here, about 300 feet,” Oberg said. Pointing out the trees in that area, he noted the massive building would be “almost twice that height.”
“I have no problem with data centers, but a hyperscale data center of this size is heavy industrial activity,” Oberg said. “And it's clearly not compatible in this particular site location — not even remotely close. That needs to be in an industrial park.”
Two hyperscale data centers have been announced in adjoining counties over the past year, but both are on large industrial-zoned properties. Meta is building a 700,000 square-foot facility just across the Ohio River in a southern Indiana industrial park, while PowerHouse is planning what it says will be a 400 megawatt data center in a Shively industrial zone of Jefferson County.
Cliff Ashburner, the attorney for the company, told Kentucky Public Radio a hyperscale data center of this size needs access to high-speed fiber lines, water, a large amount of space and high-voltage power lines. The Oldham County site has access to fiber lines and Harrods Creek that runs along it, but it’s particularly attractive for its size and proximity to LG&E’s high-voltage power lines.
“There are not many other sites — in fact, I don't know of any other sites, right now — that have those two characteristics.” he said.
Ashburner added that while Oldham County has an industrial park, it “really doesn't have the same power infrastructure, as it sits today, and there really aren't that many places that do.”
A ‘private utility’
A week before the project was announced, Ashburner sent a letter to Ryan Fischer, the county’s director of Planning & Design Services, informing that his client intended to apply for a conditional use permit to construct a data center at the property. He wrote that under Oldham County’s zoning ordinance, its use “is best defined as a ‘Private Utility.”
The local zoning ordinance makes no reference to data centers, but defines a private utility as any facility operated by a private business providing the public “a service deemed necessary for the public health, safety and welfare.”
Kentucky statutes do not define data centers as regulated utilities — such as those providing electricity, sewer and water services to the public — but Ashburner says this “private utility” definition most closely aligns with the Western Hospitality Services project.
“I think everyone would agree to some degree, data infrastructure in our community is largely private and is a necessity at this point, in terms of remote learning, remote work,” Ashburner said. “You could even argue that it actually undergirds some of the other public utilities that use web-based services.”
So long as the data center project is deemed a private utility, Ashburner argues there is no need for the property to be rezoned from agriculture and conservation to industrial — a move that must be approved by the elected fiscal court of the county. Instead, it must be approved by the county’s board of adjustment, made up of members appointed by County Judge-Executive David Voegele.
According to an April 24 email obtained by We Are Oldham County through an open records request, Fischer — also appointed by Voegele — agrees with that assessment.
Responding to questions about the property’s zoning and the conditional use permit, Fischer wrote that no zoning change was required and the permit could receive approval by the board of adjustment. He added that “you are correct there is no ‘data center’ listed in the permitted or conditional uses as this term wasn’t even a thing 10 years ago. That’s why we deemed the use a private utility thus requiring a CUP.”
Oberg of We Are Oldham County believes the private utility definition is an absurd loophole, allowing Western Hospitality Partners to go around the rezoning process of elected fiscal court and conduct “a land grab.”
“If you circumvent that process, you cut out the people and their will and their autonomy, the community at large,” Oberg said. “And that's where this pushback is coming from. It's not right.”
Tichenor agrees that the private utility designation should be rejected and the company is abusing the local process, warning that other rural counties in Kentucky “aren’t prepared in their planning and zoning to even combat these types of proposals.”
“I think it's quite a stretch,” Tichenor said. “I think there would be some legal challenges to that definition. Usually, if you're a utility, by our definitions, you're providing a service and it's regulated.”
There already is one formal challenge, as local business owner Robert Houchens filed an appeal in May to the county’s acceptance of the company’s conditional use permit application. Houchens argued it should have been rejected because state law prohibits such a permit unless local ordinances list its specific use, and there is nothing even analogous to a data center.
Amid an uproar of local criticism, Voegele and the fiscal court magistrates passed a moratorium on new data center applications in April. Though the application of Western Hospitality Partners is grandfathered in and still active, Voegele said at the April meeting he didn’t think the project would survive at the announced location, given the opposition.
This week, Voegele told The Oldham Era that he subsequently toured a data center in Virginia with “an unspecified group” that included at least one Oldham fiscal court magistrate and the mayor of LaGrange, meeting with local officials there.
“We certainly didn’t leave as experts on data centers, but we’ve grown significantly and have a much firmer footing than we had when this subject first came up a couple of months ago,” Voegele told the local newspaper.
The company's application will go before the appointed Technical Review Committee next week, which will make recommendations to the Board of Adjustments. That board is then expected to meet in June, and could give the permit its final approval.
Oberg holds out hope that Fischer will reject the application on the grounds laid out by the appeal and halt the project’s progress.
“We're just not sure what they're going to do, and that's a conversation between our group, the community and Ryan in the days and the weeks ahead.”
Tax breaks seek to make Kentucky a data center hub
In addition to the high-voltage power lines of LG&E on the property, another lure for the data center project to Oldham County are new state tax breaks that passed into law in March.
The Kentucky General Assembly passed a bill last year to exempt data centers from sales and use taxes for 50 years on their computer equipment, but only within Jefferson County. The 400 megawatt data center for Shively was unveiled this January.
Late in this year’s session, a bill was amended just before it passed that would extend such data center tax breaks to all counties. This amendment was pushed by Republican Senate President Robert Stivers of Manchester, who said last month the incentives will make Kentucky a hub for artificial intelligence and data centers.
“Within the next few months, you will see more and more announcements about artificial intelligence and data centers,” Stivers said. “I'm very well aware of what is being negotiated in various parts of the state.”
However, Stivers told Kentucky Public Radio he has not spoken to the people behind the Oldham County project.
“Other companies, other entities, other individuals — there have been multiple — have said they didn't want to participate in that,” Stivers said. “And I do not know why.”
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Stivers said he has seen articles showing “quite a bit of consternation at the local level” about the Oldham County project, which is something a developer of any kind has to assess.
The project would take place in the district of Republican House Speaker David Osborne, who has not publicly commented on the data center and did not respond to Kentucky Public Radio.
State Rep. Jason Nemes, a member of House GOP leadership who represents a small portion of southwest Oldham County, said he is not personally for or against the data center project, and he “will let the locals make that decision.”
Companies like Google and Meta specifically lobbied to expand the data center tax break in Kentucky this past session. So did Western Hospitality Partners, though the company has not revealed what company will be the end user of its Oldham facility.
Ashburner said Western Hospitality Partners finds properties that are feasible for data centers and facilitates their zoning and utility agreements, but “how they end up working with the end user is really on a case-by-case basis.”
Tichenor, who represents the Oldham County district in the Senate, said she wasn’t personally lobbied by companies on the data center tax breaks, and wasn’t in the meetings where leadership was lobbied.
“I feel like whoever's behind this one has not necessarily respected the process to come to our community, which, again, raises the concern of who's really behind this,” Tichenor said. We don't know and we won't know unless this thing gets approved.”
Though Democratic Gov. Andy Beshear is usually effusive in his touting any major new economic development announcements — such as the previously-record breaking $5.8 billion investment of Ford’s BlueOval SK electric vehicle battery plant in Glendale — he has not yet publicly commented on the Oldham County data center.
Asked for his opinion on the project and if his administration has had any discussions with the business, a spokesperson for the Cabinet for Economic Development indicated in an email that they reached out to the developers and local officials “following the announcement” to “stay updated” on it.
“As with all proposed data processing projects, we will work to understand the key factors, including proposed job creation, a detailed plan that includes coordination with a local utility provider, and the support of the local community, to determine the appropriate next steps,” according to state cabinet spokesperson Brandon Mattingly.
“We would lose that beauty”
An economic impact analysis of the data center project was completed by Lexington firm Commonwealth Economics in March, presenting financial numbers that are as overwhelming as the project’s size.
The analysis estimates the project would create roughly 4,000 jobs during five years of its construction phase and a “theoretical maximum” of more than $1 billion in direct income. Upon becoming fully operational, it would support 176 direct jobs and $51.4 million in annual local tax revenue — a large majority of that to Oldham County Public Schools.
The report also spent two pages highlighting the positive financial impact that large clusters of data centers have had for other states, including Virginia, Arizona and Georgia.
As for the potential negative impacts on the area, the analysis said the company would “mitigate onsite noise generation” by constructing noise-retention walls around the equipment, “effectively minimizing noise impact on the surrounding area.”
Despite the plan to remarkably increase their consumption, the report also included a line stating that its water and power demands “are not expected to pose issues, as both the local water utility and Kentucky Utilities have confirmed their capacity to meet increased demand.”
Oberg argues the findings of the report are misleading spin, overlooking how property values near the data center will plunge, as “it would be like moving a hog farm in here. Nobody's going to purchase that price for the assessed value.”
In addition to the lights, generator noise and increased traffic, Oberg added that the expansion of data centers in other states like Virginia, Georgia and Oregon has led to dramatic increases in electric utility bills.
“You're ultimately subsidizing the electrical needs of a multi-billion dollar corporation, in addition to the water inputs,” Oberg said.
He added his opinion that Western Hospitality Partners is moving so fast to get the site approved because they can then sign a load letter agreement with LG&E — beating other prospective data centers to the punch on a finite amount of available power.
“LG&E has a finite ability to produce electrical power,” Oberg said. “So once this deal is made on the land, and the deal is made with the power company, they don't have to worry about their competitors, because all the power at that point is spoken for.”
Nationwide, data center energy consumption is expected to double or even triple by 2028, escalating concerns about the increased burning of fossil fuels that contributes to climate change.
Tichenor’s opposition to the data center location is personal to her, as she would be able to see the data center from the back deck of her mother’s house, where she grew up.
“We used to ride horses through that property, like a lot of people in Oldham County,” said Tichenor, who was a high school classmate of Oberg. And it’s unfortunate to think such a beautiful piece of land could be destroyed and we would lose that beauty.”
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
