Gibraltar passes data center moratorium: Facility proposed at former McLouth Steel site

A proposed 100-megawatt data center at the former McLouth Steel site in Gibraltar hit a potential roadblock on Monday when the city council passed a one-year data center moratorium.

Project developer Raeden is moving forward with a Wednesday night community meeting, according to Gibraltar City Administrator Rachel Witherspoon. 

Gibraltar City Councilmember Kathy LaPointe said at Monday’s council meeting that many communities have been caught flat footed by data center proposals, and a moratorium allows the city to plan for the facilities and do its due diligence.

“We need to make sure that our planning commission has sufficient time to do their due diligence and not get pressured into making a fast-track decision to get this off and running, which I know the developer is anxious to do,” she said.

The moratorium text said it’s a “blanket prohibition” on the establishment, use, and approval of data centers in the city effective immediately.

Raeden submitted a site plan that will be reviewed by the planning commission for compliance with Gibraltar’s zoning ordinance, according to the city. The data center is not being reviewed for its land use, as the zoning of the property permits a data center, a city fact sheet said. 

The city has yet to establish any specific standards for data centers in its zoning ordinances, the data center moratorium said.

Downriver activists said a waiver provision in the moratorium could allow the project to move forward.

The group Indivisible: Downriver United 734 will hold a protest outside Gil Talbert Community Center in Gibraltar at 4:30 pm Wednesday ahead of the meeting at the community center scheduled for 5:30 p.m.-8 p.m.

Ashley Perry, Downriver United 734 cofounder and a resident of nearby Riverview, told Planet Detroit she’s concerned the data center could increase already high electric bills.

DTE spokesperson Ryan Lowry said DTE Energy is focused on keeping bills as low as possible and is confident data center developments will not increase rates.

Data center proposal targets former industrial site, Superfund property

Raeden’s Gibraltar project differs from most Michigan data center proposals because it’s redeveloping an industrial site and using an existing building, located at 27800 W. Jefferson Ave. 

The company proposes addressing contamination at an adjacent Superfund property at 28000 W. Jefferson and developing “non-nuclear” generation at this site in partnership with DTE Energy, according to a presentation from the company.

The city’s Witherspoon said the generation source would be natural gas.

The McLouth Steel plant that is now a Superfund site operated from the early 1950s to 1996, according to the Environmental Protection Agency. 

In the debate over data center development in Michigan, some have suggested industrialized sites are a better location for data centers than agricultural land, where many projects have been proposed. 

Perry said the Gibraltar site is inappropriate due to its location next to the Humbug Marsh, part of the Detroit River International Wildlife Refuge.

“Replacing one heavy industry with another that strains power, water, and wildlife is not responsible redevelopment,” she said.

Raeden declined to comment for this article.

Data center could bring new gas generation

The facilities’ 100 megawatts of energy use, specified in a city announcement, puts it on the low end of what is considered a “hyperscale” data center. This is roughly equivalent to the energy used by 80,000 homes.  

The data center would employ a closed-loop cooling system and use as much as 600 gallons of water a day, Raeden Co-Founder and Chief Operating Officer Jason Green said during Monday’s council meeting. The facility would employ 60 to 200 people, he said.

Green did not identify what kind of backup generators the facility would use.

The proposed facility is an inference data center, which powers the real-world usage of trained artificial intelligence models to generate outputs like photos or text, according to Google Cloud.

No inference data centers presently exist in Metro Detroit, according to Raeden. 

In downtown Detroit, Raeden has partnered with Bedrock, the real estate firm founded by Dan Gilbert, and his Rock Family of Companies since 2020 to provide technical data center and internet solutions according to its presentation. 

Witherspoon told Planet Detroit no city officials signed nondisclosure agreements related to the project.

Joanna Whaley, a candidate for the Michigan House of Representatives and a member of Downriver United 734, said Gibraltar’s data center proposal adds to the environmental and ratepayer threats posed by a flood of recent projects.

The demand from data centers could force utilities to build more fossil fuel power plants, Whaley said.

An “off ramp” provision in Michigan’s 2023 renewable energy law allows utilities to keep fossil fuel generation online if there’s not enough capacity to meet demand.

Whaley said data centers are an issue that crosses party lines because everyone pays utility bills that are continuing to increase.  

“We cannot afford it.”