Eastern NC town just blocked a $6 billion data center. It might get it anyway.
In a five-hour hearing that started Monday and stretched past midnight, the Tarboro Town Council rejected a permit for regional developer Energy Storage Solutions to build a multibillion-dollar data center in the Eastern North Carolina community.
But despite a 6-1 vote and vociferous local pushback to the project, some town leaders aren’t confident they can ultimately stop it from being built. The reason, which touches on complexities of local zoning laws, could inform future grassroots efforts to block data centers statewide.
“The process is not the typical process of town council,” Tarboro Mayor Tate Mayo said the next day in a phone interview. “We were not able to act in a legislative manner.”
With around 11,000 residents, Tarboro is the seat of Edgecombe County and about an hour’s drive east of Raleigh. In April, Energy Storage Solutions applied for a special-use permit to construct a $6.4 billion hyperscale data center on 52 acres zoned for heavy industrial use. Special-use permits, or SUPs, allow municipalities to approve land uses that may comply with local zoning ordinances if the projects meet certain criteria.
Based in Rocky Mount, Energy Storage Solutions said its Tarboro facility would employ 500 people and contribute $11 million annually in property taxes to the town. “We’re sitting on top of more than $50 billion worth of projects of this sort that we already had site control,” company president Daniel Shaffer told The News & Observer. “It’s across South Carolina, North Carolina, Virginia.”
Artificial intelligence and cloud computing have sparked a data center land grab statewide. Current proposals have been met by local opposition, though, including in the town of Apex, where residents are rallying against a possible data center near the Shearon Harris Nuclear Power Plant.
Critics point to data centers’ appearance, noise and impact on household energy bills — while questioning how many jobs these sparsely filled facilities create. “The serene environment, character, and community cohesion we cherish in Tarboro could be dramatically altered by the presence of such a massive facility,” read part of an online petition urging the local town council not to approve Energy Storage Solutions’ plans.
However, the Tarboro Town Council couldn’t consider constituent feedback when deciding on the fate of its data center project. Nor were elected officials supposed to vote based on their personal convictions. Overall, the council couldn’t act like a regular town council at all.
Data center developer: ‘We are going to go into court’
To balance property rights with community interests, state law requires local governments to rule on special-use permits through what is known as a quasi-judicial process.
In these hearings, town councils act more like a court and less as a political legislative body. Local governments can vote down special-use permits for four general reasons: if they endanger public health, disregard local building standards, substantially devalue neighboring property, or conflict with the “harmony” of surrounding environments.
Officials are to rely on factual testimony and expert opinion, not overall public sentiment, when ruling. And like judges in court, they are not supposed to informally discuss the case with constituents ahead of time.
“You can’t have public input,” Tarboro Town Manager Troy Lewis said. “You can’t do all those things. You have to base your decision on evidence presented at the meeting.”
Some municipalities grant the power to conduct quasi-judicial hearings to appointed planning boards, thereby separating elected officials from the non-political process. For example, Apex has board of adjustment conduct these hearings. But in places like Tarboro, the town council acts as in a legislative role most of the time — and a quasi-judicial role some of the time.
As mayor, Tate Mayo said he couldn’t talk about the controversial data center proposal with residents, including his wife, in the weeks between the first evidentiary hearing in August and the final vote. On Monday, Mayo recused himself from the hearing after saying public opposition to the data center project had influenced his views on the project.
“It is impossible to represent a town, to be elected by town, and to not take that into consideration,” he told The News & Observer. “I did my absolute best to remain impartial and unbiased for that entire period that the hearing was tabled. There was no way around it.”
Daniel Shaffer, the data center developer, says he will sue Tarboro over its decision to block his application. “We have all kinds of contracts and commitments in place that we’re not able to go forward with,” he told The N&O on Tuesday. “So, we are going to go into court.”
This case could next move to Edgecombe Superior Court, which will decide whether the Tarboro Town Council rejected the permit based on evidence and proper procedure. Shaffer argued Mayo’s public recusal statement was one of several violations town officials made.
“We’re not saying that these people are terrible people,” Shaffer said. “They just haven’t been through the process.”
Mayo acknowledged Tarboro’s permit rejection could be overturned due to possible errors in the quasi-judicial process. “There’s no way that legislative bodies like ours can (conduct) that, because that’s not what we’re intended to do,” he said.
More attempts for new NC data centers
Elsewhere in North Carolina, developers have sought to build new data centers by requesting land rezonings — not special-use permits. Rezonings are not subject to quasi-judicial hearings, and local governments can weigh public input when deciding.
In August, a Colorado developer pulled its $30 billion proposed data center in Mooresville after town officials indicated they wouldn’t back the rezoning request. Next week, the Statesville City Council will vote on a rezoning application for a five-building center across 340 acres that has also draw local opposition.
Last week, a real estate firm named Natelli Investment filed an application for the town of Apex to rezone 190 acres near the unincorporated community of New Hill from low-density residential to light industrial.
“Data Storage Facilities are modest users of public facilities,” Michael Natelli, executive vice president, said in a news release. “Not only do they generate far less traffic than residential communities, but they create high-wage technology jobs and strengthen the technology eco-system in their region.”
North Carolina is already home to many data centers, including massive hyperscale facilities supporting major companies like Apple, Google, Amazon and Meta. Computing inside these facilities creates heat, and data centers must cool their servers using considerable water and energy.
Shaffer said he will talk with local officials to “educate them” on the fiscal benefits of data centers before bringing proposals. But he believes more of these projects will come to North Carolina regardless of resident objections. And where rezoning fails, he sees another tool in special-use permits.
“These data centers will be built,” he said. “They may take a little longer, and special-use (permits) will be one mechanism to get there.”
This story was originally published September 11, 2025 at 6:30 AM with the headline "Eastern NC town just blocked a $6 billion data center. It might get it anyway.."
