The City has received questions about a data center that is under construction in an existing industrial building in the Dean Lakes Industrial Park.
This project is very different from the large AI or “hyperscale” data centers often discussed in the news. It will use an existing building on property already zoned for industrial uses. Data centers are allowed in this zoning district. There is an existing data center near this site at 4450 Dean Lakes Boulevard.
This project has been reviewed by City staff through the typical zoning and building permitting process and does not require a separate City Council vote.
To help address some of the most common questions and provide accurate information about this project, the City has prepared this fact sheet based on information provided through the building review process and by Shakopee Public Utilities.
Residents may contact the Shakopee Planning and Development Department for information about the City’s review process at planning@ShakopeeMN.gov.
To get a PDF copy of this information as a Fact Sheet, visit ShakopeeMN.gov/datacenter.
If not for housing AI infrastructure, why are data centers needed?
Data centers are part of the basic infrastructure that supports modern daily life. They are the secure buildings where computers process, store, and transmit the information used by businesses, governments, hospitals, financial institutions, retailers, and other organizations.
Every time someone uses a credit or debit card, fills a prescription, checks a bank account, places an online order, or uses a mobile application, that transaction must be processed somewhere. Data centers provide the physical equipment and secure connections that allow those transactions to happen quickly and reliably.
Smaller data centers support routine business operations and cloud-based services and can also provide backup capacity so essential services continue operating in an outage.
The Dean Lakes facility is an example of this smaller type of data center.
Will the facility create excessive noise or environmental impacts?
The facility will use enclosed air cooling and indoor backup generators. It does not include cooling towers, meaning it will not produce visible water vapor plumes and will not discharge cooling water. According to Shakopee Public Utilities, the anticipated noise levels are expected to be comparable to those of other industrial uses already operating in the Dean Lakes Industrial Park.
Could the facility contaminate groundwater or the City's water systems?
The facility will not use evaporative cooling towers or open-loop water systems. It will use a sealed, closed-loop cooling system similar to commercial HVAC systems in hospitals, schools, and office buildings. It will not release cooling water or chemicals into the municipal system. Water use will be limited to restrooms and normal office needs.
Will the facility increase electricity rates or affect the reliability of the power grid?
According to SPU, residential electric rates are not tied to this project. SPU has stated that this facility can be served using the existing electrical system and does not require new substations or transmission lines. If future system upgrades were ever needed to serve this or another large customer, SPU's rate structure requires the large power user to pay the costs of those upgrades rather than residential customers.
Will the facility affect nearby property values?
Property values are influenced by many factors, making it difficult to attribute changes to any single development. This facility will operate within an existing building and is not expected to introduce many of the characteristics associated with large industrial developments, such as outdoor cooling towers, visible water vapor plumes, significant truck traffic, or regular public activity.
Will the facility affect wildlife or the nearby conservation area?
Because the project is contained within an existing, developed site, its environmental footprint is limited to the industrial property. The adjacent conservation area remains protected under existing environmental regulations and is not being developed as part of this project.
Can the project be stopped or denied?
The property is zoned for industrial uses, and data centers are a permitted use under the City's zoning ordinance. Under Minnesota law, when a project complies with applicable zoning and building requirements, it is reviewed through an administrative process rather than a discretionary approval by the City Council. Because this project meets the applicable requirements, the City does not have the authority to deny it based on its use.