As demand for cloud services, artificial intelligence workloads, and hyperscale infrastructure accelerates, the Lehigh Valley has emerged as an attractive region for new data center development. Its access to transportation networks, proximity to major East Coast metros, and relatively affordable industrial land make it competitive. However, developers must navigate a wide array of data center zoning issues to earn a greenlight for their project.
Site suitability for high utility demands
The Lehigh Valley’s strongest sites for data centers are those that can secure reliable, high-capacity electric service. A recent article shared that a single data mega center can use as much power as 500,000 homes. Transmission availability and the ability to scale power over time remain critical gating issues. Developers should conduct early coordination with utilities to confirm load availability, required upgrades, and interconnection timelines. It’s worth noting that the interconnection process involves an analysis of the project on the existing electric system. Large projects impacting the transmission system require approval from the regional grid operator (in Pennsylvania, PJM Interconnection) and involve feasibility, system impact, and facility design studies, often taking several years for approval.
Water availability is also relevant for projects planning liquid-based or hybrid cooling. While many operators are moving toward air-cooled or closed-loop systems, municipalities and utilities in the region still pay close attention to water withdrawal, redundancy, and any impact on system capacity. Early engineering and utility studies, including geotechnical studies, hydrological reports and others, help streamline zoning and land development approvals and reduce the risk of redesigns.
In other states like Virginia and Oregon, some data center developers are constructing their own geothermal, closed loop and onsite energy generation systems to ensure needs are met, as well as reduce their costs of operation and strain on local communities.
Zoning trends for data centers
Our team is beginning to see data centers regulated under specific overlays and criteria that designate certain requirements such as buffering, setbacks, noise, and other environmental considerations. These regulations are being implemented to ensure that data centers operate in a manner that minimizes their impact on surrounding communities and the environment.
For instance, buffering requirements may mandate the inclusion of green spaces or barriers to reduce visual and noise pollution, while setbacks ensure that data centers are located at a safe distance from residential areas. Noise regulations are also crucial, as they limit the amount of noise that data centers can produce, thereby protecting the quality of life for nearby residents.
Overall, these regulations are essential for balancing the growth of data centers with the need to protect the environment and maintain community standards.
Environmental considerations: generators, water usage, and noise
Another data center zoning concern is the environmental impact, notably when in a residential area. Anticipate a zoning board or officers scrutinizing these common elements of your build:
- Backup generators (diesel or natural gas) – these can trigger review of emissions, fuel storage, spill prevention, and noise; municipal codes or supplemental standards may dictate enclosure types, permitted decibel levels at the property line, and minimum setbacks for safety.
- Cooling and water use – in addition to the utility considerations, municipalities and water authorities may impose monitoring, usage caps, or require high-efficiency or closed-loop systems to protect local water resources
- Noise and aesthetic controls – exterior mechanical equipment, HVAC units, and loading areas may be mitigated with robust screening and landscaping; building these into your presentation or application may help strengthen favorability
Similarly to adaptive reuse projects, a well-prepared environmental impact narrative — addressing emissions controls, generator testing cycles, noise modeling, and stormwater management — can avoid delays and demonstrate a commitment to responsible design.
Permitting pathway: by-right vs. conditional use
For developers, the classification of a data center within the zoning code determines predictability:
- A by-right use allows a project to move directly into land development and building permitting if it meets all ordinance standards. This path offers the most certainty and speed.
- A conditional use (or special exception) requires a public hearing and allows the municipality to impose conditions. These conditions typically address noise, screening, traffic, generator placement, and environmental performance.
Many municipalities fail to address data centers in their zoning codes. In absence of code, approvals often hinge on how terms like industrial, utility, or technology facility are interpreted. In the Lehigh Valley, the Lehigh Valley Planning Commission is working on an Industrial Land Use Guide to help municipalities with potential code updates and allow for a shift to allow digital infrastructure-based operations. Developers, investors, and lenders should consider obtaining zoning opinions when available or other supporting legal analysis to confirm the approval and land use status of a given site before development commences.
Legal support for data center zoning matters
If you are a developer looking to invest in a Lehigh Valley or PA data center, there are a wide array of tax incentives which may benefit you. Most notably is Pennsylvania’s Computer Data Center Equipment Exemption Program, which provides a state-level sales and use tax exemption for qualifying data center equipment to reduce upfront costs. The Lehigh Valley Economic Development Center also offers development incentives and financing opportunities to some local business developers.
Municipalities tend to prioritize projects that incorporate sustainable design, energy-efficient cooling technologies, and proximity to renewable energy sources or on-site generation. Developers who integrate green design and emissions-reduction strategies early often gain an advantage in securing incentives and community support, while gaining zoning approvals.
For a customized legal strategy for your unique data center project, connect with a member of our Energy & Infrastructure team. Beyond zoning and land use needs, we provide counsel in permitting & interconnections, financing, corporate & tax incentives, and eminent domain & litigation.
