New Hanover County Reviews Data Center Rules Amid AI Demand

County leaders push for greater control over hyperscale facilities

New Hanover County commissioners are examining whether local zoning regulations adequately address the infrastructure demands of large-scale data centers as artificial intelligence and cloud computing drive unprecedented facility growth across North Carolina.

During an informational work session, county leaders expressed concern that current rules allow massive computing campuses to receive administrative approval without public hearings or commissioner review. While no formal vote occurred and the board did not impose a moratorium, commissioners made clear they want direct oversight before major projects advance.

Current rules treat all data centers equally

Since 2020, New Hanover County has classified data centers as industrial use permitted by right in four zoning districts: commercial service, airport commerce, light industrial, and heavy industrial. Under this framework, county staff can approve facilities administratively regardless of scale—whether a small business server room or a sprawling hyperscale campus.

This broad definition has raised alarms among commissioners who question whether one of North Carolina's smallest and most densely populated counties can accommodate the resource-intensive footprint of large facilities. Specific concerns include power grid capacity, water consumption for cooling systems, and equipment noise.

Commissioners seek elected oversight

"I would hate for our hands to be bound and unable to take any sort of action that is appropriate for our community and have to say, 'Sorry, we don't have any authority here. This is entirely a staff-driven process,'" Commissioner Dane Scalise said during the discussion. "I'd like to explore what returning some of a decision like this back to the elected body might look like."

Commissioner LeAnn Pierce emphasized the need for preparedness: "Let's assume that we do have one piece [of land], and if there's an application that's put on the table and we're not prepared for it, that's a problem."

County staff noted that while vacant industrial parcels are limited, developers could assemble acreage by purchasing and demolishing existing structures. The board also referenced neighboring jurisdictions that have paused or restricted data center development while reevaluating policies.

Balancing growth with community needs

Commissioners stressed the importance of protecting community resources without creating obstacles for established manufacturers seeking to expand internal IT infrastructure. County staff cautioned that blanket bans on large data centers would not be legally viable.

The board discussed alternative regulatory approaches, including special-use permits and conditional rezoning, both of which would require public input and give commissioners greater discretion over approvals.

Why it matters

The surge in AI development has created intense competition for data center sites, with facilities demanding enormous amounts of electricity and water. Counties that lack robust zoning controls may find themselves hosting infrastructure that strains local resources without adequate public input. New Hanover's review reflects growing tension between economic development opportunities and community capacity constraints as the AI boom reshapes regional infrastructure planning.

Next steps

County planning staff will research policy alternatives, including updating zoning districts, eliminating by-right approvals for commercial-scale facilities, and drafting performance standards for noise and natural resource protections. Staff will return to commissioners with formal recommendations for action.

These details were first reported by WECT.