Proposed AI Data Center Moratorium fails at Lincoln County meeting

The Lincoln County Board of Commissioners met on Tuesday, February 24 in the Lincoln County Boardroom. 

Todd Meierhenry representing Augustana University as borrowers council in the transaction, was present for a public hearing regarding a Resolution giving approval to a project with Augustana University Association (the “Corporation”); and giving approval and authorization for the issuance of Economic Development Revenue Bonds, Series 2026 (Augustana University Association Project) of the County of Lincoln, South Dakota, in one or more tax-exempt and/or taxable series, in an aggregate principal amount not to exceed $35,000,000. 

“This is a hearing that is required by the Internal Revenue Code. The federal tax code allows 501c3’s like Augustana University to borrow tax exempt, but one of the conditions for them to do it is they have to go find a public issuer like a city, a county or state authority to do so and one of the requirements is also to have a hearing to allow the public to comment on whether they think Augustana University’s project is appropriate and to go forward,” he said.  

Chairwoman Tiffani Landeen asked for proponents to the public hearing, seeing none, asked for opponents. Linda Montgomery stood to speak. 

“I know I’ve been told that these have been happening forever, these conduit agreements, but my two questions are why not Minnehaha, Augustana is in Sioux Falls, and we hear so much lately, especially with the legislature being in session, about tax exempt money that we’re being this conduit for and I’d just like that explained,” she said.

Motion was made to approve by Jim Schmidt, seconded by Betty Otten, motion carried 4-1 with Doug Putnam being the nay vote.

Drew DeGroot was present for a public hearing regarding the intent to enter into a lease with Amdahl Construction Site I-1, Skyhaven Hangers Site J, Tiger Aero, LLC Site L-2, Gayle Wilts Site M-1, Ron Keenihan Site L-6, James Breit Site Q-9, Novne Aviation/ Jill Wilts Site Q-7,Legacy Aviation P-4 & 5, Shane Leininger Site L-3, Daren Hrabe Site S-4; for a term exceeding 120 days and an amount exceeding $500.00 at the Marv Skie/ Lincoln County Airport. 

“These are additional leases that have been opted into new rates at 40 cents as set forth by the commission,” he said. 

Commissioner Putnam asked if everything was going well with the transition. DeGroot responded that it was. Motion was made to approve by Putnam, seconded by Schmidt, motion carried. 

Chairwoman Landeen and Commissioner Arends requested a public hearing to consider the adoption of a resolution placing a moratorium on the permitting and construction of AI hyperscale data centers pursuant to SDCL 11-2-10. 

“Over the last year or so, multiple communities in 13 states have enacted data center moratoriums. Implementing a temporary pause on an AI data center construction will put it in the broad mainstream of both local and state policy makers nationwide. By law, here in South Dakota, this moratorium will only apply to the unincorporated areas of the county. The moratorium may end sooner based on the length of time it takes to develop the policy and zoning ordinance. The resolution that I’ve shared with the commissioners would place a one-year moratorium on the construction of all AI data centers unless we vote to end it sooner,” Commissioner Joel Arends said.

 Arends expressed to the crowd that he understands the concerns that data centers bring with them, including high electricity costs, environmental concerns, and a lack of transparency on how the projects are brought about.

“There are concerns whether private companies are socializing risk on the back of taxpayers. Multiple pieces of legislation right now in Pierre are pending and it’s important that that legislation has time to work its way through the legislative process,” he said. “Lastly, I just want to say this: it’s very rare in America today that the public is so unified on a bipartisan level. Democrats, Republicans, and everyone in between are so deeply affected by this lifechanging technology. This is the kind of technology that can change society as well as culture in many deep and binding ways,” he continued. 

Chairwoman Landeen asked for proponents of the moratorium, and Bethany Eric of Centerville stood to speak.

“I am a definite proponent and hope that this goes through so we can hold off and take our time. Just six hours ago, a report was brought to NBC in Ohio about the health effects and consequences of particulate matter released by these entities. So, this information is starting to turn about. We’re hearing about it from other entities. Let them make the mistakes, not us,” she said. 

Scott Montgomery, Susie Pratt, John Curry, and Tim Arnold shared Eric’s views, and all feared the environmental impact the data centers could have. 

“There’s way too much environmental impact that we don’t know yet on these data centers. I’m not a big proponent of them, but things have to be done. The other big thing is Lincoln County is now the third most populated county in the state of South Dakota, so I really hope that with this, Lincoln County does start a precedent with this,” Arnold said. 

Amanda Gentry shared her thoughts as well. 

“I’m here tonight on behalf of my husband. Someone has to pay our astronomical property taxes, and my husband’s working late. I’m not here to ask you to do your job, I’m not here to ask you to listen to all the constituents, which is what you were elected to do,” said Gentry.

“I’m here tonight to tell you what I am going to do if any of you vote in any capacity to bring a data center of any kind to Lincoln County. If Sioux Falls wants one so bad, they can put it in Paul TenHaken’s front yard, and his best friend T. Denny Sanford can help him pay for it. It is not the responsibility of fellow Lincoln County residents to pay for Sioux Falls’ boondoggles one way or another. If you vote to advance data centers in Lincoln County in any way, I will make it my personal goal to make sure that every person in this county knows your name, knows your face, and that you personally helped destroy this community and the agrarian society that my ancestors developed. I have already made a website, I have set up a Facebook page, and I am planning targeted ads so soon as tonight. I am in communication with someone to obtain the proper licensure for mass political text, such as the type we all get around election time. I have made political radio ads in the past and I am prepared to do it again and I have been in talks with two radio stations to do that. I will print out flyers with your picture and your public contact information and I will bring them door to door in your neighborhoods, and if you live on an acreage, I will drive around to all the farms around and let them know how you voted and how little you care for our actual community and the dozens of people who have continuously showed up and encouraged you not to do this. I will go door to door in southern Sioux Falls, in Canton, Tea, Lennox, Harrisburg, Fairview, and any other community and let them know down to the person who you are and the way that you voted. I’ll do it again at election time so that nobody forgets the way that you voted. If this seems a little over the top, I will have you know that I have done it before and it is extremely effective. You will feel the political ramifications the likes of which you have never experienced before. Gone are the days when anyone gets to destroy this society and pretend to be a conservative at the end of the day. We don’t want your windmills, we don’t want your pipeline, we don’t want your prison, we don’t want your solar farms, and we won’t have your data centers. My ancestors did not hack a civilization out of the frozen prairie for the boomer generation or anybody else to give it away for a buck,” Gentry continued. 

Chris David, Beth Quail, Jason VandenTop, Michelle Jensen, Bridget Meyers, Amy Harms, Kelly Givesauzen, Sherry McKenny, Linda Montgomery, Darb Zoog, Alan Reinpold,  all shared that a one-year moratorium would be best for the community and urged the commission to agree. Chairwoman Landeen closed public comment for proponents and asked for opponents of the moratorium. 

Commissioner Otten read an email she received from a source who wished to remain anonymous.

“It says thank you for listening to your constituents, not just the loud minority. I will not be at the meeting tonight due to the angst and vitriol seen at past meetings. After all, we’re all supposed to be neighbors wanting the best for each other. In direct contrast to someone in the past who said all Lincoln County residents are opposed to data centers, I and others have no problem with either data centers or kayos. What we do have problems with is putting in place infrastructure paid for by these businesses wanting to move in. Our roads need to be kept in good shape by the businesses using them. Finances from either the townships or the county should never be redirected to care for these roads,” Otten read. 

“Why are we allowing anonymous testimony here? All of us have to give our name and address,” Scott Montgomery said from the public. 

Chairwoman Landeen called the meeting to order, and Commissioner Otten continued reading from the anonymous proponent’s email. 

“Many  trucks traveling these rural roads are licensed by other states, so Lincoln County receives no money from them or any wheel taxes. We urge your consideration to add additional conditional use requirements to any of these businesses putting the onus on them to use their finances to help our roads and infrastructures keeping them intact. Respectfully,” she read. 

Scott Sandal questioned, “What does a moratorium cover? “Are you stopping data centers? Are you stopping AI? Are you stopping an AI data center? What even is that? I’ve been in two data centers, one today in a cave in Kansas City where a data center is, and last week I was in Arizona. You wouldn’t even know they’re there. What a moratorium won’t do for me, if passed, is lower my taxes. It’s not going to find creative economic additional funds to help offset the need of property taxes. It’s not going to stop the data center growth. You’re just not going to. It will make a pause, and my customer base will start to understand how I use the spaces that I have more effectively,” Sandal said. 

Chairwoman Landeen opened up the floor to rebuttal, where John Curry spoke again. 

“What I can say, even from the type of data centers I believe that this gentleman, though he didn’t speak to it is more traditional data centers. I’m aware of what those data centers are, large buildings filled with a lot of storage servers, processing servers, web servers, and so forth, and that’s a whole different species than these hyper-scale AI data centers. We know that from the amount of resources they use, the amount of EMF radiation, which nobody yet in Sioux Falls, at the state, or in our county have addressed. That is very real and about 1,800 show extended exposure to EMF in  very modest amounts can affect every part of our system,” he said. 

Mike Hoffman stood to speak next. 

“I don’t know who to address this to since there was an anonymous speaker, which I don’t believe is in the rules. I think we should address that, but the wheel tax that he addressed about semis using the county roads is not an accurate statement. Each individual that has a semi licensed pay a wheel tax that goes back to the county,” he said. 

Scott Montgomery also stood in favor of no anonymous letters and learning more about the project together. Chairwoman Landeen closed public testimony and opened council discussion. 

Commissioner Putnam asked Deputy State’s Attorney, DeGroot if there was any outside hiring that needed to be done for the moratorium. 

“That would depend on the commission direction. Would we have the bandwidth in-house to study it? Probably not, but that would be a commission directive towards staff on how you would like us to conduct the studies,” DeGroot responded.

“I agree with everybody here, but I would like to have a discussion more on moratoriums before I’d vote on a moratorium,” Putnam said. 

“From my point of view, I came out, I thought about the moratorium, I actually wrote a resolution, and then in talking with our staff and with other community my opinion has evolved on whether a moratorium at this point is justified. I don’t think it is. If you look at our comprehensive plan and our zoning ordinances, we already restrict data centers to a planned development district and those have to occur within planned growth areas or along the I-29 corridor and so right now there is no data center that can move forward in Lincoln County without a full rezoning, public process and a detailed review of a specific plan,” Landeen said stating she would not support a moratorium tonight. 

“What I would support, however, is a referral to the planning and zoning to take a deeper dive on our zoning ordinances and our comp plan to see if we need to come up with some better definitions for things, but I think right now we have what we need in place,” she said. 

Motion was made to institute a one-year moratorium on the construction of data centers by Arends, but the motion died on the floor due to lack of a second. Chairwoman Landeen requested a motion that the Lincoln County Commission refer the matter of data regulation to planning and zoning for review. Motion was made by Otten, seconded by Schmidt, motion passed 3-2, with Putnam and Arends being the nay votes.