When Salem, Oregon, officials announced over the summer that a new tech facility might soon be built nearby, residents packed a council meeting to voice strong objections.
For over a year, city leadership had secretly negotiated with a California-based technology firm named Verrus regarding the initiative. Many attendees expressed anger upon learning this, with one local resident labeling the hidden non-disclosure agreement (NDA) a “definitive blow to our trust.” Additional concerns included constant, low-frequency humming that could threaten both human and animal health, as well as the risk of surging electricity bills.
Even members of the city government were left in the dark; Salem council member Vanessa Nordyke stated she had no idea the NDA existed until that very month.
The city manager originally signed the agreement with Verrus back in March 2025. Following that, the developer collaborated quietly with municipal staff to evaluate site viability, utility availability, and environmental factors. Verrus only granted permission to make the plans public once it was ready to advance, eventually filing a land use application near the end of July.
As reliance on artificial intelligence grows for everyday digital tasks, the demand has skyrocketed for large-scale facilities capable of housing the massive arrays of computers required to run these systems.
Consequently, the debate over whether to approve these infrastructure projects—and how political candidates plan to shield local communities from utility price spikes—has emerged as a major flashpoint in current elections.
Previous reporting outlined how these computer hubs function and the impact of AI on their expansion. Now, the focus shifts to who holds the authority to approve them, the motivations behind municipal secrecy, and the rising trend of temporary halts on active construction.
@politifact What are data centers and why is everyone talking about them? Data centers power almost all of our online activity. They’ve sparked fierce debates around the U.S. as the AI industry grows and plans to build more of them. Supporters say they will create jobs and tax revenues, while opponents say they will drain local water and hike up electric bills. At PolitiFact, we understand that sometimes you just want the facts. So in our new series, we’re breaking down what to know about data centers — what they do, how they operate and what it means if one opens near you. #datacenters #ai #politics #facts
Who decides if a data center can open?
Final authorization for new digital infrastructure typically rests with local municipal leaders. Nearby residents frequently remain unaware of developments until late in the process because governments often enter into comprehensive nondisclosure agreements. These contracts conceal critical early details regarding financial incentives, zoning adjustments, utility consumption, and overall project expenses, sometimes even barring officials from admitting the agreement exists.
According to Eric Bonds, a sociology associate professor at the University of Mary Washington, the specific public officials involved can range from municipal attorneys and economic development directors to elected county representatives.
In Louisiana, for instance, where Meta is constructing one of the planet’s largest AI infrastructure hubs, state and regional leaders—along with the governor—relied on NDAs with corporate entities to bypass local pushback and fast-track approvals, reporting by The New York Times reveals. The arrangement was quietly negotiated over nine months without public knowledge until deals were fully locked in.
Similar confidentiality tactics involving Amazon, Google, and xAI have surfaced in states like Virginia, Arizona, and Tennessee regarding prospective and active sites.
@politifact AI data centers can be… kinda needy. The computers in these centers need lots of electricity to run constantly. They also need fresh water from local systems to keep the equipment from overheating. A typical AI data center can consume as much electricity annually as 100,000 households. The largest data centers under construction will demand 20 times that amount. Why do data centers for AI need so much more energy? Follow our page for the next video diving into that question. datacenters ai electricity watersupply
Why companies request NDAs and why some experts think it’s problematic
Jon Hukill, communications vice president for the industry advocacy group Data Center Coalition, argues that without confidentiality clauses, rival tech enterprises would hesitate to disclose sensitive operational details to municipal bodies while searching for development sites.
Conversely, Hannah Wiseman, a Penn State University law professor specializing in energy and environmental regulations, notes that companies utilize these agreements to sidestep intense pushback amid widespread public skepticism. She highlighted a summer study by the University of Pennsylvania’s Annenberg Public Policy Center showing that a clear majority of 1,320 surveyed individuals opposed building new server farms in their neighborhoods.
According to David Cuillier, director of the Joseph L. Brechner Freedom of Information Project at the University of Florida, certain NDAs compel municipal governments to obstruct records requests, forcing citizens into costly legal battles just to secure public information.
“They muzzle local officials, preventing them from speaking out to their constituents,” Cuillier noted, emphasizing that local residents deserve a voice in these developments.
Bonds echoed these concerns, stating that such pacts are frequently leveraged to improperly evade transparency mandates mandated by open records laws and freedom of information acts.
Bonds encountered these exact hurdles while researching the prevalence of NDAs alongside a colleague. Out of 31 Virginia municipalities contacted between 2024 and the following year, 25 confirmed they had entered into such secrecy pacts.
Comprehensive figures regarding water consumption were only secured in two Virginia counties after filing formal FOIA appeals and threatening legal action.
In Virginia, if land is designated as a “technology district,” facilities can often move forward without public input unless officials explicitly carve out exemptions for server farms, though community influence varies by region.
Regulatory pushback has begun to mount. On August 18, Pennsylvania Governor Josh Shapiro issued an executive order prohibiting the use of NDAs for digital infrastructure projects.
Similarly, Salem’s city council banned similar agreements on September 14. Just a week later, the city instituted a four-month moratorium on all related construction citywide, effectively halting Verrus’s local project until the restriction lifts, as noted by the city attorney.
@politifact If we use data centers for almost every kind of online activity, why are so many conversations about them focused on AI? Experts told us AI has changed the scale of computing. Training a large AI model can involve thousands of computers working together for a long time. And if everybody is sending requests to AI chatbots expecting a fast response, it requires much more computing power from data centers. This is one part of our series breaking down the facts about data centers. Head to our page to learn more. datacenters ai energy computing
Why are local governments proposing moratoriums?
Temporary freezes generally suspend permit issuances, expansions, and new approvals rather than terminating active corporate talks or wiping out legacy nondisclosure agreements, Wiseman explained.
Texas, New York, and multiple jurisdictions in Florida have enacted year-long pauses to evaluate community impacts, with various other states reviewing similar measures.
Across the country, at least 300 municipalities have paused approvals while determining utility strain, cooling methodologies, tax implications, and water requirements.
Governments are auditing electrical grids to see if local power lines can support the load or require reinforcement. The International Energy Agency reports that while an average AI facility demands as much power annually as 100,000 homes, the largest projects currently underway will require twenty times that amount.
Bonds suggests these pauses give municipalities breathing room to establish policies that balance commercial growth with environmental safeguards and community well-being.
“And help local officials understand,” he added, “at what point enough is enough and data center development is no longer desirable.”
PolitiFact Researcher Caryn Baird contributed to this report.
RELATED: Did you know most of your daily online activities rely on data centers? Here’s how it works