A four-building data center project in Dickson City suffered a setback Wednesday.
The borough's Zoning Hearing Board unanimously denied an appeal to its data center zoning ordinance by Dickson City Development LLC. The developer wants to build the data centers on Bell Mountain off Business Route 6 in an area of the borough zoned for homes and businesses.
Now, the issue is in the hands of the Lackawanna County Court of Common Pleas, borough Solicitor Bill Jones said.
Attorney Michael Mey, who represents the developer, declined comment following the hearing, which lasted over two hours.
The new law
In February, after three public hearings, Dickson City Council passed an ordinance that allows for data centers on 70 acres in its light manufacturing (M1) zone, and as a special exception.
Mey, who is representing other data center developers in the region, argued that the zoning ordinance was "invalid" for many reasons, including it does not fit the requirements for or location of the data centers that his client wants to build.
Dickson City Developer LLC, which has ties to Kriger Construction President Jim Marzolino, applied for four separate zoning permits to build along Business Route 6.
Jones and the borough’s planner, Tom Shepstone, argued that Dickson City's manufacturing district near the Lackawanna River and its border with Throop is the correct place for data centers in the borough.
"What we're trying to do is we're trying to preserve the character of certain zones for what they've been previously designated for, and that's what zoning is about," Shepstone said. "We would like commercial to be commercial.”
Shepstone was the only witness during the hearing. Mey's cross examination focused on the land available in the M1 district, access to high voltage power lines and if anything is technically manufactured at a data center.
Municipalities in Pennsylvania must allow for all land uses. That's done through zoning laws, which regulate how property can be used. Land owners can appeal those ordinances.
Most communities in Lackawanna County and beyond did not have zoning laws for data centers until around a year ago. Because of that, developers are challenging and sometimes providing language for zoning ordinances across the state.
The argument
Mey appealed 65 items in the zoning ordinance. Shepstone went through his responses to most of those issues, which included fire department requirements, decommissioning, and both the strictness of the ordinance and lack of set requirements.
Mey also focused on the manufacturing district’s access to high-voltage power lines. He said there are no high capacity electrical substations in or around the district.
He questioned Shepstone about how the power lines would get from Business Route 6 to the manufacturing district, suggesting that they would have to be run through residential neighborhoods.
“We are providing a location for your project, it's your job to design it. Now, if you find that you can't do that then you may have a valid claim, but at this point we don't know that you can't do that,” Shepstone said.
The area of Business Route 6 is not the only location of high voltage power lines in Lackawanna County. The lines run throughout the valley, including on the east side of the Casey Highway.
PPL Electric Utilities is also planning an expansion of power lines and electrical infrastructure across Lackawanna County to power data centers.
Mey also questioned if the manufacturing district has enough acreage to build not only a data center but an electrical substation yard to power the energy-intensive industry.
Jones at one point objected to the line of questioning since Dickson City Development LLC has yet to tell the borough how much power their data centers would need.
“Our objection, and one of the reasons they were denied as a permit, is we don't have any of that information. So now he's got to speculate as to what their load is. They won't tell us, but we have to speculate,” he said.
Mey is also appealing that decision.
Is anything manufactured at a data center?
A portion of the hearing focused on whether a data center should belong in a manufacturing district.
The borough’s 2003 zoning ordinance had a line for “data processing and record storage” in both its commercial and manufacturing districts. Dickson City Development applied for the zoning permit for the commercial district in January based on that language.
Shepstone said, in his opinion, that "line" has nothing to do with data centers. Since the ordinance provided no definition of those uses, he concludes that it meant data processing, like for a healthcare company processing claims.
“That is not manufacturing data, it is not doing AI, it is not thinking like human intelligence. It is not generating a new product. It's simply doing bureaucratic work,” he said.
Mey objected to Shepstone’s opinion and Jones’ questioning.
“What Mr. Shepstone is attempting to do is insert only his opinion as a post-hoc type of attempt to pigeonhole the definitions contained in the prior ordinance in such a matter to make them inconsistent with data centers,” he said.
Jones said that the current data center usage did not exist more than 20 years ago.
Shepstone believes that data centers are “digital manufacturing.”
“I've noted in my report several reasons why this would be a manufacturing use, starting with the water use, the electrical use, the sound concerns, the fact that it's making a product, and the nature of the product,” Shepstone said.
Mey asked Shepstone what product comes “out of the door” at a data center.
“It's digitally conveyed,” he said. “It's oftentimes a report, it's oftentimes a research result. It's oftentimes an image that is created.”
Mey continued to contend that data centers did not fall under manufacturing.
The hearing board went into an over 20 minute deliberation before voting to deny the appeal.
Dickson City Development LLC is also appealing the borough zoning officer’s decision to deny a zoning use permit for its planned data centers.
The first hearing on the issue was held on April 29. It was continued until Wednesday, May 27, at 5 p.m. at the Dickson City Borough Municipal Building, 901 Enterprise St., Dickson City.
