Pushback Grows as Data Centers Proliferate in Charlotte Metro

On Oct. 6, Clayton Sealey posted a picture from his popular CLT Development account on Twitter showing a nearly 2-acre plot in First Ward that’s home to the historic Court Arcade Building. His caption noted, “Every building in this picture, except the historic arcade building, quietly became a data center in the past few years.”

Now that piece of history will be lost to future generations, demolished to make way for construction of a 12-megawatt, four-story data center on the property. 

“When I realized that the incredible Court Arcade Building, designed by architect William Peets in the mid 1920s, came into the conversation, my interest grew further,” said Sealey, who is also a Charlotte Mecklenburg planning commissioner. 

(Sealey stresses that the opinions expressed in this article and on social media are his own and do not represent the Charlotte Mecklenburg Planning Commission’s.)

A look at the plot’s purchase history and overhead photographs suggest the proposed facility has been in the works for years, and that much of the pending data center is already in place.

In March, Texas-based real estate investment trust Digital Realty paid $16.1 million for two parcels at 725 E. Trade St. and 712 E. 5th St. 

Sealey traced the property records for three additional parcels on the block, which are adjacent to the properties bought by Digital Realty in the spring. They’re at 731 E. Trade St., 113 North Myers St. and 125 North Myers St. Though owned by various LLCs, he found that the paper trails all led to the same entity: Digital Realty. 

The Charlotte Observer confirmed Sealey’s research, reporting that the three parcels at 731 E. Trade St., 113 North Myers St. and 125 North Myers St were bought by Digital Realty for $17.3 million in 2005. Only one parcel on the property doesn’t belong to Digital Realty; the Cogent Communication company has owned the building at 701 E. Trade St. since 2019 when the company purchased it for $15 million. 

“I believe there is also a data center component to [701 E. Trade St.] based on the amount of air conditioning units on top … of the building,” Sealey noted.

“If you look at the three [buildings] that are facing Myers Street, you can see they each have a skyscraper’s worth of air conditioning units on [their roofs],” Sealey continued. “That can tell you just how much cooling power they need.”

Data centers house the computers, CPUs and specialized chips that perform the calculations needed for training and running AI models. The centers require a lot of energy to power machinery and servers, plus large amounts of water to cool those systems.

The International Energy Agency (IEAI) reported in April that an average 100-megawatt data center in the US uses more energy than 75,000 homes combined and consumes more than 2 million liters of water per day.

Despite promises of jobs and increased local revenue from developers, area residents are growing more opposed to the idea of data centers in their communities.

Neighbors in Matthews recently pushed back against Project Accelerate, a proposed data center in the southeastern Mecklenburg County town. Though the public cited worries about tree loss and environmental disruption, concerns about skyrocketing electricity costs dominated the conversation. (Project Accelerate was anticipated to draw up to 600 megawatts.) 

“Electrical prices in the area are pretty much guaranteed to go up, more so than Duke Energy is already going to do to us,” said Matthews resident Brent Metcalfe in a public hearing on the project on Oct. 6.

The concerns of residents like Metcalfe about footing the bill for data centers were warranted.

Senate Bill 266, the Power Bill Reduction Act, passed over Gov. Josh Stein’s veto in July, mandates that large industrial energy users like data centers will pay less toward purchased energy costs while households pay more. A study by EQ Research found that power costs for residential customers will soar from $458 million to $545 million, a 19% increase, after the enactment of SB 266. 

In Matthews, public opposition to Project Accelerate grew so staunch that on Oct. 7 developers withdrew their proposal to rezone 123 acres at 1603 East John St., effectively pulling the plug on the data center project. 

As data centers draw more and more scrutiny from the people that have to live next to them, the proliferation of those facilities in the region is also driving concerns.

Data Center Map, a Danish company that maintains an international data center database, lists more than 40 data centers in the greater Charlotte area operated by six companies, including Flexential, TierPoint, Segra and Digital Realty.

Local realtor calls attention to data center proliferation

“Massive data centers are being built near Charlotte,” reads a Sept.15 Instagram post by @cltbeat. “Residents are fighting back due to noise, environmental damage, and traffic. Is one being built near you?”

Michael Cook, a residential realtor in Charlotte, runs the cltbeat account. He was looking for news items to post that would build his audience, in particular stories that he felt had been under-reported by local news.

In his video on the proliferation of data centers in Charlotte and the surrounding region, Cook highlights Project Accelerate. On Sept. 25, he posted another video that digs deeper into the controversy surrounding the since-canceled data center. It’s proved to be his most popular post to date.

Cook’s Sept. 15 video also looks at a 400-megawatt data center campus in west Charlotte proposed by Digital Realty, the same company developing the data center in Uptown. Digital Realty bought the 156-acre parcel at 12899 Moores Chapel Road in November 2024 and recently petitioned Charlotte City Council to rezone the property to allow for the 3-million-square-foot data center. 

City staff recommended the proposal, as did the Zoning Committee on a 6-0 vote. Council approved the rezoning on May 19.

A five-building data center on a 124-acre site on University City Boulevard in University City has also gotten the go-ahead. Powerhouse Data’s petition to rezone the land for a data center was approved by Charlotte City Council on a 7-2 vote in September. It is slated to start construction in 2026.

In a public hearing on Sept. 15, Statesville City Council unanimously approved the rezoning request for Compass Data Center’s project on a 340-acre site on Stamey Farm Road. Compass Data is moving forward with constructing five server warehouses, an electrical substation and a temporary plant for manufacturing construction materials.

Cook notes in the video that diesel generator emissions, stormwater runoff and industrial noise are among the public’s chief concerns about the Statesville center

He adds that Mooresville Technology Park, a proposed $30-billion campus proposed for a 400-acre parcel between Patterson Farm and Rustic roads in Mooresville, on land owned by NASCAR legend Dale Earnhardt’s widow Teresa. Facing opposition from residents including Earnhardt’s son Kerry, Denver-based developer Tract withdrew its proposal on Aug. 13.

Amazon’s $10-billion data center hub, Energy Way Industrial Park in Rockingham, Richmond County, is also highlighted in Cook’s video. 

“This project won’t be voted on locally, but it shows how aggressively tech companies are targeting North Carolina,” Cook’s video concludes. “These data centers promise jobs and tax revenue, but they come at the cost of land, power, water and peace of mind.”

Cook says he’s run analytics on his video responses to breakdown what concerns people have and has rarely seen climate change mentioned. 

“It’s more about water overuse, skyrocketing electricity [use] and pollution — but pollution leads to climate change, right?” he says. 

Uptown data center a done deal

Digital Realty’s proposed data center in Uptown is nowhere near as large as Amazon’s massive Rockingham facility or Digital Realty’s coming west Charlotte campus. Data Realty’s planned four-story center in First Ward is similar to those two projects, however, in that it can not be stopped in the same way the proposed Matthews and Mooresville data centers were. 

Touting the company’s plans to build its Uptown data center, Digital Realty’s website says, “This center … sits on the region’s top priority power grid, making it a trusted location for major financial and government institutions.”

In an Oct.6 Facebook post, council rep LaWana Mayfield addressed constituents’ concerns about the proposed center, sharing a response she received from city staff regarding Digital Realty’s project.

“Telecommunications and Data Storage Facilities (data centers) were an allowed by-right use in the legacy ordinance and were incorporated into the UDO [Unified Development Ordinance] in the same manner,” the message from city staff reads. “A data center in this location would have been allowed by-right before the UDO.”

In effect, Charlotte’s UDO, adopted by city council in August 2022 and last updated by council on June 16, 2023, allows a data center to be built on Data Realty’s uptown property at and near 725 Trade St.

In zoning and government, “by right” means a property owner is permitted to develop their property as they see fit, as long as it complies with the zoning code’s requirements — in this case the 2023 UDO’s definition and understanding of a data center.

In an email to Queen City Nerve, Mayfield pointed out that the rise of artificial intelligence has changed the meaning of a data center as we knew it. 

“Prior to the UDO, what we … understood a decade ago as a data center is different with the increase of artificial intelligence,” she wrote. “For example, a call center would be considered a data center.”

Sealey noted that Charlotte has had data centers in Uptown since the 1930s, pointing out that the AT&T building in First Ward was once an old telephone switchboard center. Likewise, a former Duke Energy-owned property, purchased by Berlin-based Millennium Venture Capital in 2022, once also housed a data center. 

Those facilities, however, predate the AI data centers with their voracious hunger for power and water.

That said, Sealey said the scale of the proposed Uptown facility suggests that it will draw far less water and electricity than outlying data centers like PowerHouse’s 124-acre site in University City, Digital Realty’s 156-acre campus in west Charlotte and Amazon’s Richmond County sprawl.

“From what I understand, these [data centers] in Fourth Ward in particular provide necessary support to the financial centers in Charlotte,” Sealey offers, “So I’m not exactly against a data center in this form.”

As for any further proposed data centers in Charlotte, Mayfield says she plans to work with city staff to see if the UDO’s language needs to be updated to reflect the reality of data centers today. 

It’s too late, however, to hold a public hearing on the proposed Uptown facility, or for the council to discuss revising the UDO’s language in 2025.