Menomonie datacenter opposition stalls $1.6 billion Meta-linked project as U.S. backlash grows

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Menomonie datacenter opposition

Highlights

Menomonie officials secretly approved a $1.6 billion datacenter project linked to Meta, using NDAs and zoning changes before public disclosure in 2024-2025.
Mounting community backlash over water use, transparency, and process led to the project's suspension in 2025, with current zoning rules now blocking future datacenters.
Nationally, at least $156 billion in U.S. datacenter projects were blocked or delayed in 2025 as over 500 local governments seek bans amidst rising concerns over resource use and incentives.

Secret approvals and local backlash

As first reported by The Guardian, Menomonie officials began working with Balloonist LLC in 2024 under nondisclosure agreements that concealed both the existence of the arrangement and the identity of the tech company behind the proposed development.

Public records and interviews cited in the report show the city council later approved a pre-development agreement in closed session in March 2025, with Balloonist offering to reimburse up to $200,000 for site, environmental and traffic reviews. A separate ordinance change in 2024 added digital data processing and transmission to the city's warehousing definition, effectively clearing a zoning path for a datacenter before many elected officials fully understood the project.

The planned campus carried an estimated $1.6 billion price tag and would have used about 75,000 gallons of water per day. Consultants told council members it could bring up to 1,000 temporary construction jobs, hundreds of contractors and 50 to 75 permanent positions, while promising buffer zones for noise and future investment in water and grid upgrades.

Opposition intensified after residents learned of the proposal in mid-2025. Community members raised concerns over water demand, noise, transparency and the use of shell companies and NDAs, then organized through public meetings, protests and social media to pressure city leaders to reverse course.

Wider political and industry implications

Menomonie's mayor at the time, Randy Knaack, eventually halted the project through a memo stating the datacenter was not a suitable fit for the city, and the council later unanimously passed a January ordinance that reversed the earlier warehousing definition and created a separate zoning category for any future datacenter application.

Knaack later said the city had been outmatched by a developer backed by one of the world's richest companies and acknowledged that NDAs should not have been used for a project of that scale. The development is paused rather than canceled, and Balloonist still owns the land, while new mayor Matthew Crowe has said he declined to meet company representatives this summer to avoid undue influence.

The fight in Menomonie mirrors a broader U.S. backlash against datacenter expansion tied to the AI boom. According to figures cited from Data Center Watch, at least $156 billion of projects were blocked or delayed in 2025, while 45 projects worth an estimated $68 billion were blocked or delayed between April and June this year.

That resistance is now shaping state and national politics. More than 500 counties and municipalities seek to ban or restrict datacenters, the report says, while disputes over jobs, energy use, water consumption and tax breaks are forcing elected officials in both parties to balance union support for construction work against growing community opposition.

In our earlier article on the mounting strains on U.S. AI data center expansion, we explained that many headline-scale projects are being delayed or shelved as funding becomes more expensive and investors grow more cautious. We also noted that power-grid constraints and rising community pushback are increasingly forcing developers to secure energy solutions and reconsider where—and how fast—they can build.

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