How one decision in a small town could change the future of data centers.
Delaware may be the second smallest state in America, but a debate over a proposed $9.7 billion data center project by Starwood Digital Ventures in The First State is about to have pretty big implications nationwide.
Speaking at the Developing Delaware Conference hosted by the Delaware State Chamber of Commerce on October 9, Anthony Balestrieri, managing director and CEO of Starwood Digital Ventures at Starwood Capital Group, laid out his company’s detailed plans for this massive digital infrastructure campus in Delaware City — a town of 1,885 people along the Delaware River in New Castle County, a Philadelphia suburb that is Delaware’s northernmost county and its oldest, having been established in 1673.
Anthony Balestrieri
CEO, Starwood Digital Ventures
Upon buildout, the 580-acre, 1.2 GW campus would have 11 buildings and total 6 million sq. ft., making it one of the largest data center sites along the Eastern Seaboard. “We call it Project Washington,” Balestrieri said on stage at Delaware Technical Community College in Dover. “We’ll build the first 10 buildings over eight years. Each data center job created here generates six additional jobs to support the project. Four buildings in phase one will total 432 megawatts. Six buildings in phase two will add another 432 megawatts.”
Balestrieri noted that during and after construction, the project will entail $9.7 billion of economic output, create 3,500 new construction jobs and result in 700 permanent full-time positions paying over $100,000 a year on average. Altogether, the complex will pay out $2.5 billion in construction wages, create an annual payroll of $100 million onsite, contribute $75 million a year to New Castle Schools and county government, and add at least $17 million each year to the county’s general fund.
Balestrieri said the need for more data centers is created by the habits of Americans.
“Each person accesses over 1,000 data centers a day just by using a smartphone,” he said. “Our project is an environmentally responsible way to meet increasing demand for digital infrastructure. Our campus will be powered 100% by renewable energy. The campus sets aside 40% of the land for open space, and there will be no disturbance of water resources. In fact, each building will use the same amount of water as a same-sized office building.”
Despite the company’s pledges, critics are lining up to oppose the project and working to scuttle it, voicing their concerns about potential impacts to air, water, energy resources and the coastal environment. Officials in New Castle County and the Delaware Legislature are holding meetings to consider new regulations for data centers. New Castle County Councilman Dave Carter proposed an ordinance that would require such projects to be built in heavy industry zones if they are approved following special project review.
If approved, the Starwood project could begin construction in the third quarter of 2026 and become operational in the second quarter of 2028.
$6.7 trillion will be deployed in
data center infrastructure worldwide
from 2025 through 2030.
Source: McKinsey & Company
Pulling the Plug Picks Up Steam
This is not an anomaly in America. From Charlottesville, Virginia, to St. Louis and St. Charles, Missouri, opponents of data centers are growing in numbers and mounting organized opposition to the rising wave of AI hyperscale server farms nationwide. Illinois’ House speaker announced recently that his chamber will take up legislation restricting data center growth, and in Georgia, the tally is now up to five counties that have enacted data center moratoriums.
According to independent research group Data Center Watch (DCW), $64 billion in U.S. data center projects have been blocked or delayed by a growing movement of local, bipartisan opposition. DCW counts 142 activist organizations mobilized across 24 states to systematically oppose and block new data centers. Virginia is by far the national leader with 42 anti-data center activist groups.
Despite these setbacks, CBRE reports that data center growth remains on pace to achieve record-setting levels of new absorption this year. According to the firm’s mid-year market report, primary market supply rose by 17.6% in the first half of 2025, with 74.3% of capacity under construction already pre-leased, mainly to cloud and AI providers. Vacancy rates for data center facilities have dropped to a record low of 1.6%.
What has markedly changed this year, however, is the sheer volume of opposition being mounted against these projects. Increasingly, developers are abandoning plans even before they face a public vote by locally elected officials. In Louisa County, Virginia, Amazon Web Services abandoned its plans to develop a third data center campus on July 23 after receiving critical feedback from the community. The planned data center project would have covered 7.2 million sq. ft. and cost billions of dollars.
In North Carolina, the Tarboro Town Council rejected a $6.4 billion, 500-job data center project on September 9 after local residents raised concerns about energy consumption, noise levels and clean-tech viability. Meanwhile, a new Texas law that took effect in June allows ERCOT — the Electric Reliability Council of Texas — to cut power to large data centers during grid emergencies. The legislation is designed to prevent the kind of sweeping blackouts that paralyzed the state during the 2021 winter blizzard that claimed hundreds of lives.
Greg LeRoy, founder and executive director of Good Jobs First, says he now advises locally elected officials to reject all AI hyperscale data center plans that come before them. He says he opposes them for the following reasons:
“The industry’s secrecy.”
“The egregious upward pressure on people’s electricity bills.”
“The runaway state revenue losses.”
“Harm to school funding.”
“Local corruption.”
“Environmental justice abuses.”
“Harm to local water supplies.”
“Connections to ICE and surveillance capitalism.”
A scan of media coverage of data center protests nationwide shows that most data center critics are using these same exact talking points when they show up at local hearings.
Where Does the Industry Go from Here?
Is there a viable path forward to building massive AI campuses anymore in North America? Data center proponents say there is, but it won’t be easy.
“Battery storage is a key component in terms of the ability to mitigate against dramatic swings in different types of generation for large users,” says Gordon Dolven, research director for Americas Data Centers for CBRE. “Power means more to our industry now than ever before. It is an all-hands-on-deck approach to power generation that is needed. As we continue to move through this constrained period, we will see more solutions crop up.”
Andy Cvengros, executive managing director and co-lead of JLL’s U.S. Data Center Markets team, says, a lot of misnomers are going on around data centers and the industry has done “a terrible job” educating people. That said, “People don’t want their power rates to increase. And with electricity rates doubling in some areas, that is a very valid concern.”
Cvengros asks, “What is worse — a warehouse that brings in a ton of trucks, or a data center? You don’t need to add schools, hospitals and other services when you bring in a new data center — and I don’t see the demand for data centers slowing down. If anything, it is getting bigger and more centralized.” The key, he says, is to get zoning approval quickly. “Zoning approval is getting equally important as power,” he notes. “Once you have it, you de-risk the project a lot.”
Certain locations are doing more than others to smooth out the process for data center developers, says Cvengros. “Indiana, Philadelphia, Pittsburgh, South Dallas and Louisiana are greenlighting them. Pennsylvania even set up an AI Strike Force.” In addition, the governors of Alaska and West Virginia have advocated for the creation of AI data center hubs in their states due to their plethora of natural energy reserves. The Canadian province of Alberta is doing the same.
Some people don’t want change to happen, says Cvengros, which means it takes more white-glove service to do business there. “Give the residents a chance to ask questions and then show them how you will improve their community. Coming into a city under non-disclosure and making the whole project a big surprise is not the way to go.”
Pat Lynch, executive managing director for CBRE’s Data Center Solutions, says dealing with opponents is just a fact of life. “Projects of this size will have some opposition. The best success comes when the client works collaboratively with the community and the local utility.”
Lynch cites the example of QScale, a Canadian data center developer that is planning a $3 billion campus in Toronto while it builds out a smaller one in Levis, Quebec. “They have been very successful,” says Lynch. “They are taking the waste heat from the data center and using it to support greenhouse farming. That is a really cool idea. Projects like this are being proposed in Germany too.”
The more sustainable and environmentally friendly these campuses become, says Lynch, the more they will win the hearts and minds of people who live near them.
