By the Founders, Department of Technology | San Diego, California | November 13, 2026
Most data center deals are shaped long before residents hear a word. Here is a step-by-step walk through how a typical one comes together, who decides at each stage, where the public is shut out, and what an accountable technology leader would change.
No two deals are identical, and we do not claim every project follows this path. Some officials negotiate openly, and some developers welcome scrutiny. But the pattern below appears again and again in public records and investigations, and understanding it is the first step to changing it.
Step 1: A site is chosen, and it is not about you
Data center developers pick locations for electricity access, water rights and fiber connectivity, not for population or local jobs, according to a Quartz analysis of the industry’s land-acquisition playbook. Your community may be on a list for reasons no one has told you.
Who decides: the developer. Where the public is left out: everywhere; no one has been told. What would change: a technology leader would know the utility’s pipeline and whether your community is on it (see our first-year guide).
Step 2: Land is quietly secured
The next move is usually to lock up land. The most common tools are, according to that same analysis, shell LLCs, nondisclosure agreements, land options that tie up parcels before public review, and intermediary buyers acting for unnamed principals. The practice is old. In 2019, the Washington Post reported that Google had used shell companies in negotiations with at least five cities, and in Iowa created one LLC for the land sale and another for the development deal.
There is a legitimate reason for some of this. Once a famous buyer is identified, land prices can jump sharply; the article cites Disney in Florida, where prices rose more than 1,000 percent. Sellers deserve a fair price, and developers deserve a fair negotiation. The question is how long secrecy should last and who else is kept out.
Step 3: Officials sign NDAs, and projects get code names
Local officials are then asked to sign confidentiality agreements. An NBC News review of more than 30 data center proposals across 14 states found that in most cases local officials signed NDAs and dealt with what appeared to be shell companies. In Louisiana, public records requests turned up 54 NDAs signed by elected officials since early 2024, and the agreements covered projects under code names like “Project Lightning.” In Minnesota, a project near Hermantown, code-named “Project Loon,” was identified as a data center only after the Star Tribune obtained public records, by which point the city had already changed land use plans and carried out preliminary environmental review.
Who decides: a handful of local and state economic development officials. Where the public is left out: the officials who sign cannot discuss it, even with their own colleagues or constituents. What would change: a policy that the jurisdiction does not sign NDAs on development matters, with trade secrets protected by narrower means.
Step 4: The utility is asked for power
In parallel, the developer asks the utility for a connection. AEP Ohio, for example, charges a one-time fee of $10,000 to $100,000 for each load study and requires it to be paid within 45 days or the customer forfeits its place. These queues can be full of placeholders. AEP Ohio was facing 30 gigawatts of potential new load before its data center tariff, and one analysis found that its pipeline fell from roughly 30 GW to 13 GW after the tariff took effect.
Who decides: the utility, under rules set by the state commission. Where the public is left out: the pipeline is rarely published, so local officials may not know which requests are real. What would change: public reporting of large-load requests by jurisdiction, and a local seat in the commission proceeding.
Step 5: Incentives are negotiated
The developer then seeks tax relief. In the Midlothian, Texas, case the Post described, Google reportedly used a shell company to negotiate a $10 million tax incentive with local officials. At the state level, thirty-eight states offer incentives, and in Ohio the break cost state and local governments about $2 billion last year, according to Policy Matters Ohio, far more than forecast. Those figures come from the incentive programs themselves, not from one negotiation, but they show the scale of what is decided in small rooms.
Who decides: state and local economic development officials. Where the public is left out: the cost-benefit analysis, if one exists, is often not public. What would change: published cost-benefit analyses before approval, and clawbacks if promises are missed.
Step 6: Land use is approved
Only now does the public typically see a rezoning request or a site plan. If data centers are allowed by right, there may be no hearing at all. By this stage, the land is secured, the utility has been approached and the incentives are drafted, so the room to say no is small. In Hermantown, by one account, officials turned away questions from nearby residents about whether the project was a data center.
Who decides: the planning commission and the county board or council. Where the public is left out: the decision arrives late and often looks finished. What would change: special-use permits instead of by-right approval, and a requirement for a public hearing with full disclosure before anything is signed.
Step 7: The power contract is signed
The utility and the developer sign a service agreement. In states with large-load tariffs, these carry minimum bills, long terms and collateral. Dominion’s Virginia tariff, for example, calls for 14-year minimum contracts and $1.5 million per megawatt of collateral. Elsewhere, the terms are weaker or negotiated one at a time. Who bears the risk if the facility closes or never fills is a question of contract design, and most residents never see the contract.
Step 8: Construction, jobs and revenue
Then the buildings go up. The jobs promised are mostly short-term. A Reno facility’s business records estimated 73 permanent jobs against more than 4,000 temporary construction jobs. An Illinois study projected that $57 billion of new data center investment would create 121,000 jobs, but only 2,800 would be direct, permanent positions, or about $20 million of investment per permanent job. Brookings researchers found effects of roughly 100 to 200 jobs at a typical affected county, along with a modest increase in home prices of 2 to 5 percent, and noted the effects vary by facility type.
On the other side of the ledger, the tax revenue can be large. Loudoun County, Virginia, reports that data centers produce 38 percent of its general fund revenue on about 4 percent of its commercial land.
The pattern
Laid end to end, the steps show a consistent shape: the biggest decisions happen early, in private and without a public voice, and the public hearing arrives after the key commitments have been made. That is not necessarily bad faith. Many officials believe they are protecting a competitive negotiation, and many developers are responsive once the project is public. But a system that depends on goodwill at every step will not protect residents when goodwill runs out.
The case against our case
- Officials say NDAs are necessary. Louisiana’s economic development secretary told NPR that NDAs are “fundamental for economic development”, allowing the state to compete. Her point deserves weight. On the other hand, a parish president in the same state said economic development does not require NDAs, chose not to use them, and still saw a $10 billion data center built.
- Early secrecy can protect sellers. As noted above, a named buyer can inflate land prices, so a limited period of confidentiality may serve landowners. We would limit it to land transactions and end it before any public vote.
- The jobs numbers are disputed. A Maryland Tech Council study, for example, estimated that a typical 800,000-square-foot data center would support nearly 500 permanent jobs, a far higher figure than other studies, according to one review of the evidence, which also cites a Virginia state audit that found far fewer.
- Many deals are fine. Some projects are welcomed by communities and deliver what they promise. The goal is not to stop deals but to make sure the public can see them before they close.
What to do with this
If you serve on a council or board, ask where your community is in this sequence, and who has signed what. If you are a resident, request the NDAs and incentive agreements under your state’s public records law. And if you are a candidate, tell voters who in your government is responsible for each of these eight steps. Right now, the honest answer in most places is that nobody is responsible for all of them. Our proposal is at department.technology/.