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It has been a wild ride in economic development these last few years. In the United States alone, we saw the COVID doldrums of months of nothingness give way to the rush to expand our nation’s warehouse inventory to ensure redundancy in our supply chain.

We saw an uptick in onshoring and nearshoring that helped enable diversity of suppliers. And that growth has now been eclipsed by the explosion of megaprojects over the last two years.

Fueled by the CHIPS and Science Act and the Inflation Reduction Act, and the administration’s push to lead the world in electric-vehicle-related technology, massive multibillion dollar projects with hundreds of accompanying jobs became the new norm for many communities..

Unfortunately, in many cases, the companies and their economic development shepherds sprinted eyes-closed into the quagmire of NIMBYism.
NIMBYism, aka Not in My Backyard syndrome, is not new. It is an age-old issue of neighboring property owners/renters wanting things to stay as they are, often paired with a rational concern about the unknown ramifications of a new industrial neighbor.

Unfortunately, our general connectivity to social media and a growing distrust in institutions (federal, local, or otherwise), has led to an irrational proliferation of misinformation and conspiracy theories about economic development projects with proverbial monsters behind every door. As a result, traditional NIMBYism has morphed into BANANA’s (Build Absolutely Nothing Anywhere Near Anyone) and CAVEs (Citizens Against Virtually Everything), and we now see that a small vocal group of media savvy activists can influence political decision-making.

While these challenges are proliferating for projects of all sizes, the proliferation of data centers, pushed by the word’s insatiable consumption of ever-more-sophisticated digital media, ever-more-expansive cloud storage requirements, and the growth of AI, has drawn the particular ire of many community opponents. Although there should always be room for a healthy debate over the value of a proposed project’s job creation and investment, the prevailing rhetoric is often less about facts and data, and more akin to who can yell the loudest.

Despite the perceived doom and gloom, there are strategies that local officials, economic developers, and their data-center projects can employ to deal respectfully with these community concerns. Although not a panacea, taking a page out of a traditional, grass roots political campaign plan and implementing it locally to educate and inform about the value that data centers can bring can help smooth the community approval process. Moreover, the concept can be distilled into two core principles: 1) implement a concerted, strategic data-driven effort and 2) start yesterday.

Clearly Define the Project
Nothing breeds questions like a changing project scope. Before going public with a project, come to internal agreement on its scope – the size, timeline, potential impacts, and other aspects of the project so the message doesn’t continue to shift thereby causing suspicion.

Highlight the Alternatives
Prepare a comparative pros and cons analysis of data centers vs potential alternative uses for the site and share that information with the public. Review what could also be developed at the site – presuming that development will happen – and go to the community and ask what would be the preferred use. Are jobs a higher priority than capital investment? How do neighbors feel about traffic impacts?

Get to Know the Community
Do your homework on the movers and shakers in the community – who influences whom, which organizations are respected and trusted, and find champions for development.

Gauge True Community Sentiment
Listening to the community is so vital. Often, project developers are so eager to tell their story that they launch immediately into a pitch without seeking input first. Seek out opinions from a variety of stakeholders and work to incorporate reasonable suggestions into the project.

It is summarily important to have a thoroughly developed plan in place to roll out the nuances of the project to the public as soon as possible. Key items in this strategy include the development of a website and social media landing pages that provide answers to common questions, arm elected officials with those same questions and answers so they can more thoroughly respond when asked by constituents, host information sessions that are well publicized and open to the public, and participate, in-person, in all scheduled public hearings related to the project and its development.

The boom in megaprojects and the proliferation of data centers in both urban and rural parts of America has led to a surge in NIMBYism. Valuable, job-creating, tax-generating economic development projects that would otherwise fit perfectly into the fabric of a community, can be delayed or derailed through the efforts of a small but vocal assemblage of misinformed (or misaligned) citizen activists. Economic developers and companies can overcome (or at the very least diminish) negative rhetoric and misinformation by developing and implementing a strategic public engagement plan in the early stages of a project’s life cycle. The larger the scope and impact of the potential project, the greater the need to muster the appropriate resources to ensure that the public is properly informed and engaged.

W. Ford Graham, Senior Vice President, McGuireWoods Consulting

W. Ford Graham is a senior vice president on McGuireWoods Consulting’s national infrastructure and economic development team and a partner with McGuireWoods. Ford has a depth of experience working in the economic development sector, where he has been one of the leading recruiters of international companies to the Southeastern United States. He has facilitated new industry and industrial expansion in over 123 projects, which have resulted in commitments of more than 11,000 new jobs and $3.9 billion in new investment. Ford’s practice focuses on companies opening or expanding operations in the U.S. In addition to economic incentives, Ford assists companies with the full spectrum of legal needs that arise when companies enter new markets. Most recently, Ford was a partner at an international AmLaw 100 law firm, and he previously served as director of international strategy and trade for the South Carolina Department of Commerce. In that role, he directed all aspects of the agency’s international efforts, including South Carolina's four international offices in Delhi, Munich, Shanghai, and Tokyo, uncovering foreign direct investment opportunities, and assisting South Carolina companies with exporting their products to the rest of the world. Before that, he worked as general counsel for a real estate development/investment firm and served as a judicial clerk in the 5th and 14th Judicial Circuits of South Carolina. Ford also served as a United States Peace Corps Volunteer in Guatemala.

Christopher D. Lloyd, Senior Vice President and Director, Infrastructure and Economic Development, McGuireWoods Consulting

Christopher Lloyd leads the McGuireWoods Consulting Infrastructure and Economic Development team where he specializes in site selection and economic development incentives negotiations. Lloyd has also worked closely with clients on numerous public-private partnership projects for transportation and other infrastructure as well as playing a leading role in the development and passage of Virginia's public-private partnership laws. These statutes have since become model legislation for use in other states. As a result of this work, Lloyd has become a frequent speaker on economic development policy issues and public private partnership projects around the country.

• Colocation centers may involve multi-tenant operations and higher density.

• Edge data centers are typically smaller but closer to end users.

• On-premises centers serve single organizations and are often embedded in campuses.

Understanding these distinctions helps ensure land use, zoning, and infrastructure are appropriately matched to the project’s demands.

Assessing Infrastructure Needs

Ask how much power, water, road access, fiber connectivity, and transmission capacity the proposed data center project will require.

• Data centers are energy-intensive, often consuming 30–100+ megawatts (MW)—enough to power tens of thousands of homes. Localities should assess:

  • Whether existing substations and grid infrastructure can accommodate this demand.

  • Whether upgrades to transmission lines or substations are necessary, and who will bear those costs.

  • Opportunities to integrate renewable energy sources into the project or grid.

• Water usage is another key consideration. In particular:

  • Understand the source of water (potable vs. recycled).

  • Assess potential strain on local water supplies.

  • Encourage or require use of nonpotable or reclaimed water, especially for cooling systems.

  • Ask how water usage will be monitored and managed over time.

Evaluating Environmental and Sustainability Practices

Ask developers to clearly outline sustainability strategies related to:

• Cooling systems (air-cooled vs. water-cooled)

• Energy efficiency standards (LEED or other green certifications)

• Integration of renewable energy

• Low-emission backup power generators

• Noise mitigation and environmental monitoring

• Stormwater management and site runoff controls

• Heat reuse or energy recovery systems

These practices can reduce community impact, improve public perception, and support regional climate goals.

Reviewing Land Use and Zoning Strategy

Ensure the project fits within local land use and comprehensive plans. Localities should ask:

• Does the proposed site have access to utilities and infrastructure corridors?

• Is the project compatible with existing zoning? If not, does it require a rezoning or conditional use permit?

• Would a data center–specific zoning overlay or a Planned Innovation, Research, and Technology one be more appropriate?

Encourage:

• Thoughtful site selection that considers proximity to homes, schools, or sensitive land uses.

• Design guidelines for noise, visual impact, and architectural style, such as setbacks, landscaping, façade treatments, and screening.

• Clear standards for ongoing operational compliance, including sound, emissions, water use, and emergency systems.

Planning for Public Outreach and Transparency

Developers should be expected to:

• Engage early and proactively with residents and stakeholders.

• Host public meetings or open houses.

• Provide clear, accessible project information and visuals.

• Commit to ongoing communications during construction and operations.

• Establish a process for addressing community feedback and concerns.

Transparency builds trust and can reduce friction during the approval process.

Considering Long-Term and Community Impact

Ask about the employment profile of the project:

• How many construction jobs will be created, and over what timeframe?

• What is the expected number of permanent employees once operational?

• Are there local hiring or workforce development goals?

Explore community benefit opportunities, such as:

• STEM education partnerships

• Job training programs

• Support for local nonprofits or infrastructure improvements

• Broadband expansion efforts

Additional Resources: