What is the Future of Data Centers in Salem?
Hi folks,
Welcome back to another special edition of the North Salem / W6 Newsletter. I'm hoping to use this opportunity to put some of my own thoughts to (digital) paper about one of the big topics on this season of Salem City Council... Data Centers.
At the time of writing, we may be on the path to allow data centers to be built in Salem, despite significant community outcry.
Intro
Modern data centers have existed for decades, but there has been a significant change in the last few years as big tech companies like NVIDIA are pumping trillions of dollars into the market. This has led to a significant increase in building infrastructure i.e. data centers.
These new AI data centers consume higher-than-average power per square foot compared to existing data centers (historically used for things like cloud computing, storage, and infrastructure for the internet to function). All of this has lead to significant national backlash against these data centers being built in existing communities where the residents are forced to deal with the externalities (heat, noise, water consumption, etc.) with no real means to mitigate them. The most effective strategy has been, in my opinion, preventing data centers from being built in the first place.
Why are we all suddenly talking about data centers in Salem?
Someone tried to build one, of course! The saga has a few twists and turns and spans several months. Rather than reiterate the whole thing here please feel welcome to check out this article on the subject. I'm sure there are others, I just found this one quickly.
The quick quick story (or TL;DR, if you would) of all of this is that Prime Group was (repeatidly) denied the ability to create a data center in Salem based on 1 key legal fun fact:
Our current zoning prohibits the construction of data centers as a principle use.
In parallel to this saga, and perhaps motivated by it, the Mayor submitted a zoning amendment change to the council to explicitly prohibit data centers from being built. My understanding of the original goal was to make it more clear to potential data center developers that they shouldn't try to build one here, even though they already aren't allowed.
I sat through 3.5 hours of a Zoning Board of Appeals meeting so you didn't have to
Actually, over 200 other community members joined for at least part of that meeting, which according to ZBA members, was sort of a lot for them! In this meeting the ZBA reiterated clearly that, given that "data center" is not defined as a permissible use, they are prohibited. That's how zoning code works, if its not explicitly allowed, then it is not allowed. So here's the good news, our zoning process clearly worked with Prime, AND through that process we got to hear the strong sentiment from the community to prohibit data centers in our city. The bad news begins with an important question from the dozens of folks who regularly watch our City Council meetings:
Why did I vote against a data center ban at the last Council meeting?
The simple answer is that, immediately prior to the vote on first passage of the zoning amendment, what started as a data center "ban" became legislation to take the first step to allow data centers in Salem, not prevent them.
On September 9th the City Council and the Planning Board held a joint public hearing to discuss the proposed zoning amendment from the Mayor to ban data centers. After that meeting, the Planning Board met to discuss their recommendation which included a critical amendment that they offered back to the Council. That a data center be defined as having "... and aggregated power demand of 2 megawatts or higher." The Council overwhelmingly voted in favor of this amendment with Councillor Hapworth and I being the only two opposed. With this amendment in place I could not in good faith vote for first passage of a zoning ordinance that I strongly believe is worse than doing nothing, and I feel equally strongly that this ordinance should not pass with this language. Let's get into why.
You can't fight thermodynamics, trust me, we've tried
The particularly damaging aspect of data center functionality that we need to be aware of is that, contrary to many other commercial or industrial uses, nearly 100% of the energy consumed by a data center is converted into heat, and regardless of method the data center is cooled that heat needs to go somewhere. Somewhere being directly into our neighborhoods and our ecosystem. If you've ever stood outside of an air conditioner that is moving the heat from the cold inside to the warm outside, you know something about how thermodynamics works. Congrats! Now imagine standing next to the hot end of 4500 air conditioners. That's something close to 2MW of heat. I know that's not something that people want to live near, and frankly, they shouldn't have to.
Who Wants to be a Zoning Nerd?
What does it mean if we accept the language of the amendment and define data centers in the way that the Planning Board recommended? Let's be clear, data centers with 2MW or less power would still not be allowed without additional language that expressly permits them. Remember, that was a key finding of the Zoning Officer & ZBA in dealing with Prime.
It begs the question, what would this new language look like, if not an allowance of data centers under 2MW? I believe that this amendment language came from a good place:
How do we ensure that the Hospital or other businesses can have a server room, something that could look quite similar to a small-scale data center.
I appreciate the question but I strongly disagree that the solution should be this amendment language. Remember, we're talking about primary uses which effectively means "its the main thing going on there". No one would reasonably consider the server room of a hospital to be the principle use; that's definitely the big building with doctors, not the computers.
What is equally troubling for me is that 2MW capacity on a 100,000 sqft lot feels a lot different than 2MW on a 10,000 sqft one, and we need to recognize that our zoning is still somewhat nonsensical across the city. We have small Industrial zones in areas like along Mason St. that could be redeveloped into a data center spitting out 2MW of heat, if we're not incredibly careful with this language. There may be ways to mitigate the issues I've identified here, but I'll admit that I'm skeptical that it can be done effectively.
Why are we really talking about data centers?
At the end of the day I believe that this all comes back to money. Folks with more experience than I in finance speculation have valued the AI industry at hundreds of billions of dollars in 2026 and suspect that could grow by 20%+ per year for the next 10 years. Other folks see this as a financial bubble, that will burst immanently, similar to the .com bubble in the early 2000s or the housing bubble in the late 2000s, both of which caused a significant recession. Either way, its clear to be that folks with investment money are seeing this as a cash grab and they're not really interested in the impact that their business has on the host community, or frankly, the environment or the economy. We pretty much heard exactly that from Prime earlier this month.
There's real concern that we should have when dealing with this amount of money. Prime was willing to appeal a use-based decision from our Zoning Officer, something which no one has recent memory of happening in Salem. If we open ourselves up to allowing data centers "with limitations" we run the real risk of people trying to stretch those limitations via litigation against the city. Do we really want to open ourselves up to that legal liability? That's time and money that we could (and should!) be spent on improving the quality of life of residents, not fighting billionaires in court.
What's next?
The City Council Committee on Ordinances, Licenses and Legal Affairs co-posted with
the Committee of the Whole will meet in person on Wednesday September 30, 2026, at
6:00 PM for the purpose of discussing an Ordinance to Amend Ordinance relative to
Zoning – Data Centers. In this meeting we will discuss what language we include in this zoning ordinance and if it moves forward. This conversation will be the tipping point that determines if the city prohibits all data centers or if we allow them with limitations.
Conclusion
So, dear reader, I'll leave you with my final thoughts on this. What do we have to gain from passing a zoning amendment? Probably not a lot, maybe nothing at all. The city has laid down the law that data centers of any kind are not allowed in Salem, given our existing zoning laws. I fear that we have much more to lose from passing a zoning amendment that allows the "limited" use, especially with an allowance up to 2MW of energy consumption. That level of heat & noise is unacceptable to neighbors, not to mention that this language could facilitate a legal process where companies with much to gain from the AI market could make life really hard for the city and its residents. We need to remember that the time to fight this is now because if any of these things are built, it'll likely be too late to do anything about the consequences of them. If you'd like, you are always welcome to attend the meeting to give public comment, as well as email the City Councillors at CityCouncilors@Salem.com
And to the folks who are worried about limiting the good things that come with this technology: I'm not saying we never allow this sort of thing in Salem. I'm saying that right now, in this market, its too risky to open this path forward. I'd propose we need to allow for 2 key milestones to occur before we allow any data centers in Salem:
The market needs to cool down and and the demand for AI infrastructure needs to stabilize. Right now we're dealing with companies that could easily find it worth their money to litigate our zoning laws, and we've already seen this happen in Salem! I suspect that once the AI bubble bursts that we'll enter a more reasonable phase of AI development and that will allow the city a better footing to explore how we can adequately allow for this use in our city.
The AI industry needs to deal with that pesky issue where it consumes egregious amounts of energy. That happened with the cryptocurrency, Etherium, and I hope that this can happen with AI, especially if we all refuse to accept the negative consequences of the industry as it currently stands and use our market power to demand a significant change in energy consumption. It can happen and it needs to happen for the sake of our climate, and you know, our future as a species...
Until then, I firmly believe that allowing any data centers in Salem, as a primary use, is both premature and potentially damaging to the quality of life that folks have entrusted the Council to safeguard.
I hope this clears up my position on this topic and I appreciate the time that you (yes, you!) put into reading this all the way through.
Cheers,
Katelyn
