Frequently Asked Questions

A data center is a facility used to store, process, and transmit digital data. It’s essentially a warehouse of computers, servers, and other computer network equipment. 

Inside a data center, digital information is being processed and stored to support common digital services we rely on like online banking and health care as well as activities like apps, streaming services, and online shopping. 

Data centers can be smaller facilities hosting data for a single user, such as a retailer. Some are part of larger corporate office buildings. Other data centers are large facilities for large data processers, including Artificial Intelligence (AI) companies. These larger facilities are often referred to as “hyperscale” data centers. 

A technology campus is a larger type of data center.

Rather than being built as a single building in a typical commercial or industrial area, many data centers have started to be built as part of technology campuses with more than one building connected by power supply, communication links, or other common systems. 

Hyperscale data centers needed for large technology companies and for Artificial Intelligence products are typically designed as technology campuses, with multiple buildings and other supporting infrastructure on one site. 

Initially, Monticello is attractive as a potential location because there is a power plant supported by transmission infrastructure. These features are critical to data centers.

In addition, there is land available for development while remaining close to population centers like the Twin Cities and St. Cloud, so data can be efficiently received, stored, and transmitted.

Data centers can produce employment. However, the number of jobs can fluctuate over time.

Our research indicates they produce a lower number of permanent jobs per acre than other industrial uses, but data centers create employment during construction, which may last for years in the case of large facilities. 

They also create ongoing employment as they consistently upgrade equipment. This employment can have ripple effects throughout the economy – from hotels to schools. Long-term, data centers typically employ fewer people than a typical light industrial use, but they generally employ highly skilled workers. 

However, because not all data centers are the same size, scale or type, the City must plan carefully where they should be located to preserve land for industrial users that generate a higher number of jobs as part of a healthy community economy.

Data centers can use a significant amount of power to operate their computing and cooling systems. The exact amount depends on the size of the data center and the systems it uses. To evaluate the differing needs, local power providers have specific processes for reviewing and permitting the power demand needed to operate a data center. 

In some states, the infrastructure investment needed to power data centers impacted rates for customers. In an effort to prevent this, the State of Minnesota recently adopted legislation requiring the costs to upgrade infrastructure and supply enough power to data centers to be paid for by the data centers themselves, not passed on to customers.

Water usage by data centers is highly variable because each data center facility is different.  The amount of water use depends on their size, location, and individual operation systems.  

In 2025, the State of Minnesota passed a new law that requires data centers that are expected to be large water consumers to go through an early review by the Department of Natural Resources (DNR). The DNR will be looking statewide to ensure water resources are protected from overconsumption.

In addition, the Monticello draft zoning ordinance for data centers requires that any proposed data center must verify an adequate and permitted source of water, identify its rate of use, mitigate impact to any private or public water systems, and pay for any upgrades to the water system and extension of municipal water lines. 

There are also options to require data centers to commit to a rate structure to guarantee adequate and efficient service.  

The City Council’s interest in possible data center development is contingent on protecting existing taxpayers from having to pay for a future project. 

When incorporating references to data center development into the Monticello 2040 Vision + Plan, which is the City’s plan for growth over the next 20 years, the text states that when considering whether to allow data centers in Monticello, “Data center uses shall demonstrate convincingly that its burden on municipal services, infrastructure, or fiscal condition is completely mitigated by the data center project and its developers, and such mitigation is sustainable by its subsequent owners, users, and other related entities.”  

In summary, the land use plan requires that data centers demonstrate that their costs are fully paid by the data center itself. The draft zoning ordinance also requires that any applicant for data center development is required to provide a fiscal benefits statement, which is intended to verify that the project will meet this goal.

Minnesota law does not give the City the authority to place zoning or land use decisions on a ballot. Under state statute, zoning decisions must be handled through established local government processes, and not through referendum elections. 

We recognize that this topic has generated strong opinions, and that’s why we have sought public input throughout the process. Public hearings are a required and meaningful part of land use decision-making, and not just a formality. Feedback from public hearings directly influenced revisions to the draft data center (DCPUD) ordinance. Visit the Data Centers webpage for ways to stay informed and engaged. Public hearing notices are also available on the City website.