'An Expensive Lesson': Data Center Developers Launch Efforts To Gain Support In Hostile Communities

As a growing number of major data center projects are delayed or derailed by opposition from local residents and elected officials, developers are realizing they need to play politics, and they are beginning to pour more resources into efforts to win hearts and minds.

The data center industry was caught off guard by the growing wave of opposition it faces in data center development hot spots. Proposed data center projects once flew under the radar but now routinely provoke fierce backlash and organized opposition rooted in local environmental and quality-of-life concerns.

Developers have struggled to navigate an increasingly hostile political landscape in key markets like Virginia, Arizona and Oregon, where data centers have become central issues in local elections and proposed projects face growing scrutiny from lawmakers and lawsuits from residents.  

Developers have been slow to react to these shifting political winds.

But as local resistance jeopardizes major projects, the industry’s largest players have begun changing their approach toward the communities where they hope to build. Developers are starting to treat proposed projects like separate political campaigns, devoting personnel and financial resources to engaging local stakeholders and tailoring messaging around projects to build support and mitigate potential opposition. 

In recent months, developers Compass Datacenters and EdgeCore, which are pursuing major, controversial data center projects in Virginia and Arizona, respectively, have created new senior positions focused on community engagement and hired public relations and economic development veterans. 

Industry insiders say developers are realizing that a more proactive approach is necessary to prevent political battles from delaying or derailing the projects needed to meet record demand. 

“It has been an expensive lesson,” said Adam Waitkunas, president of Milldam Public Relations, a longtime data center PR firm that launched a dedicated community relations practice for developers this month.

“Just look at the lawsuits and other tie-ups right now where developers are having to mount opposition campaigns and pay legal bills while the data center’s not getting built and tenants aren’t moving in,” he added. “People are realizing what the cost is, and they’re coming around to the idea that there needs to be a more comprehensive strategy when dealing with these communities.” 

Rising community pushback shouldn't have come as a surprise, experts said. 

The industry’s physical footprint has expanded as traditional data center development areas like Virginia’s Loudoun County have run out of land and power, driving new construction into nearby rural and residential communities in places like Prince William or Fauquier counties that previously had little in the way of large-scale industrial development. Residents have had to grapple with massive data centers replacing farms and forests or rising near bedroom communities. 

At the same time, data centers are getting bigger, a trend that is accelerating due to the computing needed to support artificial intelligence. Rather than individual buildings, development proposals are more likely to be for large campuses consisting of millions of square feet of data centers spread across hundreds of acres and supported by new transmission lines and substations. This scale of development has a far greater impact on surrounding communities that industry insiders said inevitably generates pushback. 

“Data centers used to fly under the radar, with community members not knowing the difference between a data center and a modern warehouse or logistics facility,” said Tom Traugott, senior vice president of strategy at EdgeCore Digital Infrastructure. “Now that large investments are being made in data centers to support AI, these sites will be larger than ever, making the prospect of hiding anonymously unviable.

“To survive, they must build better partnerships and foster collaboration to bring value to their communities.” 

But until now, this kind of proactive community engagement effort, a routine element of large developments in other sectors of commercial real estate, hasn't been part of the data center development playbook.  A developer pursuing any major mixed-use project in a place like Boston or Chicago typically wouldn’t launch the entitlement process without first engaging with local politicians and stakeholders to understand the community, anticipate potential points of conflict, craft a targeted message to build support and establish local allies.

Waitkunas compared the approach to launching a local political campaign. 

“You’re essentially putting together all the components,” he said. “I think it’s a useful blueprint for a lot of these companies.”  

No part of this approach has been routine for data center providers. The result, Waitkunas said, is that the data center industry has largely failed to head off community opposition and avoid the delays and derailed projects that have occurred as a result. Instead, they have been reactive to public skepticism that could have been avoided.

“The biggest mistake has been not engaging at the community level and doing things like holding town halls and conducting surveys before the project is announced. They need to be going in ahead of time to address the fears that community members might have,” Waitkunas said. “Instead, local papers are pulling public records and reporting projects before the developer has even announced it, and the developer’s caught off guard because it’s being reported that they bought land and they're planning however many megawatts or square feet, and folks in the community have seen that and already started to mobilize.” 

But with local hostility emerging as a significant obstacle to delivering desperately needed capacity, the industry’s largest players are finally starting to adjust their strategy, investing in the resources and personnel to execute proactive community engagement campaigns as an integral part of the development process. 

Waitkunas said it was surging demand for exactly this skill set that led his traditionally business-to-business PR firm to launch a community relations practice earlier this month. 

Big Tech hyperscalers were some of the earliest to make significant investments in community relations in places where they plan to build or lease data centers. Microsoft has built a community affairs division focused on data center development that it is continuing to grow. Amazon and Meta have created positions focused on engaging with communities where the company is building data centers, from Northern Virginia to Kuna, Idaho. Google has a division devoted to data center economic development. 

Some of the largest private data center development firms are also ramping up community relations expertise in their executive ranks, creating new senior positions focused on engagement with residents and local officials near development sites. Compass Datacenters brought on longtime PR professional Katy Hancock in October, appointing her vice president for community relations. In November, EdgeCore hired Bill Jabjiniak, the former head of economic development in Mesa, Arizona — the site of EdgeCore's largest project and a data center hotbed that has seen opposition to new development — appointing him senior vice president of community outreach. 

Jabjiniak told Bisnow that his experience on both sides of the community relations ledger, representing both a municipality being inundated by data center proposals and now EdgeCore, has given him a unique perspective on the industry’s shift toward more proactive community engagement ahead of major projects. 

“I was the main point of contact on the other side for these companies, and their biggest mistake was their lack of communication,” Jabjiniak said. “For a long time, the data center industry has hidden behind that cloak of darkness, where companies basically said they were just going to do what they wanted to do.”

EdgeCore’s community engagement strategy has aimed at building relationships with elected officials in development markets, according to Jabjiniak, with the primary goal being to understand the concerns and potential pain points for the local community before a project is proposed, allowing time for those issues to be considered in the design and development plan. 

“If a city council member and his constituents have concerns about noise, it gives us a chance to talk about what noise means during construction, during the operating phase or when we're going to test generators,” Jabjiniak said. “We can tell them we’re not going to test early morning or overnight but rather in the middle of the day when most people are out of their homes, so we disturb the least amount of people. But you don’t know unless you ask the questions.”

This kind of engagement with elected officials and other community leaders prior to submitting development plans not only helps data center firms better understand the local political landscape, but those same officials can be developed as critical local allies who can be valuable voices of support for a project that will carry weight in their communities.

These kinds of relationships can translate into both key votes and crucial local influencers who can help move projects forward when opposition arises, Waitkunas said. 

“No one wants to hear from some out-of-state PR firm that's working with a large data center developer. That's not going to move the needle,” Waitkunas said.  “But if you put a coalition together of local folks who serve as ambassadors for the project and help you get your message out, that’s the winning combination.”