LELAND — Amidst the artificial intelligence boom over the last few years, some local municipalities are taking a preemptive stance toward facilities powering the industry.
The Leland Planning Board unanimously recommended a staff-initiated text amendment Tuesday night that would place strict guardrails on data center development within town limits. The proposal seeks to balance the significant growth of the industry with the protection of local resources and residential quality of life.
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While data centers are currently allowed under Leland’s existing town rules, they are not specifically defined. The lack of a formal definition often allows the projects to move ahead by-right, without public input and with town staff working with developers behind the scenes on their plans to ensure all permitting is secured.
The proposed rule change taken up by the planning board would instead move data centers into a conditional zoning category and restrict their location exclusively to the town’s Innovation Park, located near the intersection of U.S. Highway 74 and Interstate 140. The Innovation Park was chosen as it already houses major manufacturing operations and has access to major transportation corridors and supporting infrastructure.
Under conditional zoning, a developer seeking to build a data center would be required to submit a detailed site-specific plan, hold two mandatory community meetings, and face a final, public vote by council.
Sensing the growth of the industry and the potential for a data center to be built in town limits, Leland staff initiated the rule change to formalize how these facilities integrate into the town’s landscape. According to staff, no data center or data storage facility has been proposed within town boundaries. However concerns over its effect on the environment and residents within its vicinity drove one planning board member in favor.
“I read the stories about Matthews, North Carolina, and by saying you could put it here conditionally, it doesn’t stop someone from saying, ‘I want to do a data center somewhere else’,” board member Robert Lazaro said. “I want to thank the staff for being proactive.”
Lazaro previously lived in Northern Virginia — home to the world’s highest density of data centers, where rapid growth has transformed once-rural and light industrial areas with large-scale data centers, drawing resident opposition over noise and resource consumption. He pushed for the strictest technical requirements.
“I’ve lived through it,” he said. “It’s coming, and so I’m happy that we’re prepared.”
Ben Watts, planner for the town, presented how data centers, driven by a national need for AI and cloud computing, can impact a community through high-energy consumption, specialized liquid-based cooling requirements, and constant generator noise.
A data center is a physical facility housing the computing power needed to run websites, cloud services, apps, and AI tools. While traditional data centers were designed for tasks like web-hosting and storing emails, the recent surge in AI has forced a shift toward facilities with more computing power. These venues are packed with thousands of computer servers, data storage drives, and specialized hardware — specifically graphics processing units — which perform the trillions of calculations required for tools like ChatGPT and image generators to function.
AI use has accelerated rapidly in the last few years, moving from a niche technology to pushing the global economy forward. A 2025 report from the UN Conference on Trade and Development projects the broader AI market will grow from $189 billion in 2023 to $4.8 trillion by 2033, meaning more physical data centers will be needed to facilitate that growth.
Proponents of data centers contend they bring economic benefits for a municipality in the form of property tax revenue and construction jobs for building the center. However, permanent employment at a data center is usually limited. Post construction, the facility often needs only a small staff to operate and maintain servers, according to economic analysis from the Brookings Institution — a nonpartisan public policy think tank — highlighting most jobs tied to data center development are short-term rather than long-term.
Though data centers can generate economic activity, their resource consumption has become concerning for residents across the state and the country.
In North Carolina, a 189-acre data center is currently proposed in the town of Apex, which has sparked intense resident opposition, over both noise and water consumption. Despite the projected $10 million in tax revenue it’s expected to bring to Apex, the project has not yet received final approval from its town council and is in the review process. Elsewhere, as Lazaro noted, a proposed data center development in Matthews was ultimately withdrawn last October after residents expressed widespread concerns over the project’s noise, water and power impacts following public pushback during the rezoning process.
The main controversy around the centers stems from water consumption. According to the Lawrence Berkeley National Laboratory, large data centers can consume between 1.5 million and 5 million gallons of water per day for cooling server systems — enough to support a town of 50,000 people. Individual 100-word AI prompts are estimated to use roughly one bottle of water (519 milliliters).
Also the 24/7 industrial hum from backup generators have concerned many about disturbances, particularly in rural communities like Apex. Noise pollution would come in the form of industrial cooling fans and generators that can reach upward of 96 decibels at the source — roughly the loudness of a motorcycle or heavy lawn equipment operating nearby — and could remain audible hundreds of feet away.
The Leland Planning Board approved restrictions that specifically target the noise and resource demands inherent to data center development and use.
To address noise concerns, facilities must not exceed a sound level of 60 decibels at the property line, a volume Watts compared to the loudness of a “typical conversation.” Furthermore, the town would mandate data centers meet at least 60% of their energy needs through on-site renewable resources or renewable power purchase agreements. In other words, at least 60% of the center’s electricity would come from clean, renewable sources, either produced on the property or purchased from renewable energy providers.
To protect water resources, the policy requires “closed-loop” cooling systems, which recirculate water or refrigerants internally rather than continuously drawing from and discharging into the municipal system. In a traditional “open-loop” system, water acts like a disposable coolant. A data center pulls in millions of gallons of water, runs it through the system to absorb heat from the center’s servers, and then evaporates that water into the atmosphere to cool down. This process results in permanent water loss for a community.
“In some areas, you might find they allow data centers to cool with raw water,” Watts told the board. “Raw water comes in, it goes out to essentially the municipal sewer system or other areas. A closed loop water or refrigerant system is just that it’s a closed loop. Yes, you do have to fill it once, and you might have regular flushings to ensure the health of the system, but it does reduce greatly the amount of water that’s being used to cool these data centers.”
A closed-loop system can reduce a facility’s water footprint by over 90% and is similar to a car radiator. A fixed amount of water is sealed within a network of pipes and continuously recirculated around hot servers. Instead of evaporating water to get rid of the heat, the system cools the water back down using fans and heat exchangers so it can be used again. Closed-loop systems are more expensive for developers to build, but ensure the data center doesn’t compete with residents for the local water supply during peak months.
The text amendment passed by the planning board also mandates data centers to face annual reporting requirements, allowing the town to verify whether the center is maintaining its noise and energy limits each year after initial construction is complete.
During Tuesday’s meeting, board members said scale and growth of the industry makes preparation a necessity. Lazaro successfully introduced several amendments to the proposal, including a requirement for a water capacity analysis before construction to prove a project won’t drain the local supply and a “heat export ready” design. The latter requires facilities to be built so the massive amount of waste heat — excess heat produced as a byproduct of running servers — they generate can be captured and repurposed for other uses, such as heating public buildings or pools. He mentioned the swimming pool at the 2024 Summer Olympics in Paris was heated by waste heat from a data center.
Leland is part of a growing regional trend toward regulation. In January 2026, the Town of Shallotte also approved a text amendment to proactively define and regulate data centers. Much like Leland, Shallotte moved to allow their use via conditional rezoning only within their heavy industrial districts. Shallotte’s policy focuses more on traditional industrial aesthetics and buffers, whereas Leland’s proposal includes more technical mandates, like renewable energy quotas and system requirements.
Separate from municipalities, Brunswick County set the baseline in 2023 when it added data centers to its Unified Development Ordinance. According to county communications director Meagan Kascsak, the county’s move was intended to provide clarity for developers by defining exactly where and how these facilities can be built within the county. No data centers have been proposed to the county since the rules were adopted.
Unlike Leland’s proposed policy, which moves data centers to a conditional process, the county rules allow them by-right in General Industrial (I-G) zones. As long as a developer meets the standard land use and setback requirements in the I-G district, they can receive administrative approval without a public hearing. Requirements include maintaining a 50-foot front setback and installing intensive vegetative buffering when adjacent to residential areas.
Leland staff noted its new data center definition was loosely based on Brunswick County’s to ensure “congruency” among neighbors. However, the board acknowledged Leland’s proposed regulations for data center facilities — such as the closed-loop system requirements and 60% renewable energy mandate — are notably higher than county standards.
The text amendment now moves to the Leland Town Council, who are scheduled to hold a public hearing and make a final decision on the amendment during its March 19 meeting.
Have tips or suggestions for Charlie Fossen? Email charlie@localdailymedia.com
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