New Lexington data center won’t get city money. Mayor supports ‘tight controls’
The developer that recently bought a former Lexmark data center property in Lexington and plans to expand it likely won’t get financial support from the city to do so.
In a statement to the Herald-Leader, Lexington Mayor Linda Gorton said her office was not made aware of the DartPoints Operating Company purchase of the property until the private sale was complete. The city did not need to rezone the property because it’s already zoned in a way that data centers can operate on the property.
“We have informed them that we will not support public incentives for this project,” she said. “While this project is permitted under the current zone, we will be taking a close look at regulations controlling these types of developments.
“I support very tight controls,” Gorton said.
Lexington’s comprehensive plan, which guides development; and its zoning ordinances, which define what businesses can go where; are largely silent on data centers, city officials said earlier this spring.
Local governments across the Bluegrass State — and lawmakers in Frankfort — have dragged their feet on implementing policy related to data centers aside from implementing moratoriums on their development or giving them sales and use tax exemptions.
Gorton, who is running for reelection, said, “we need to think very carefully about data centers. They do not produce many jobs, and have the potential to increase utility costs on local residents.”
In a statement posted to social media June 5, District 1 Councilmember Tyler Morton said he also was not made aware of the property sale or proposed use of the site until it was made public. He said council is exploring “all available options within the City’s authority related to data centers.”
The former Lexmark and now DartPoints property is in Morton’s district.
“While I understand that a portion of the property has been used as a data center in the past, I have thoughts and concerns regarding large-scale data centers and their potential effects on surrounding neighborhoods, infrastructure, utility demands, and long-term land use planning,” Morton said in the statement, suggesting the site be instead utilized for affordable housing or something that creates more jobs.
Lexmark data center property
The $29 million sale of 745 W. New Circle Road closed May 15, according to the Fayette County Property Valuation Administrator, and changed hands to DartPoints, a Dallas-based business that operated almost a dozen data centers across the country.
The site adds a “strategically located expansion platform” for the company and is expected to play an important role in its broader growth strategy as it looks to serve larger, more power-intensive customers, DartPoints said in an announcement of the acquisition.
The company will develop the site to support a broad mix of customers and uses, including for the support of different types of artificial intelligence. The site, as is, has an approximately 20 megawatt to 30 megawatt capacity, though DartPoints said there is long-term expansion potential to 70 MW.
The more than 345,000 square feet of space across nearly 30 acres and two buildings was listed for sale for seven months before closing. One building was partially leased to a variety of tenants while the other includes more than 81,600 square feet of former IBM data center space.
Zoning amendment to define data center
In an April 30 Planning Commission work session, a consultant working on the Blue Sky Small Area Plan said he was preparing a zoning ordinance amendment to define and regulate data centers in the city’s code.
The Blue Sky Small Area Plan proposes uses for and suggests what types of commercial development should be built on the roughly 300 acres around Athens Boonesboro Road and Interstate 75 which was added to the city’s urban service area in October 2023.
At the work session, Caleb Racicot, the consultant from an Atlanta-based planning and architecture firm, said the amendment would define minor and major data centers as those that are less than 50,000 square feet and those that are larger, respectively.
Major data centers larger than 50,000 square feet would not be allowed in industrial districts under the amendment Racicot said he was drafting. Making the change to the code as it applies to the Blue Sky Small Area Plan gives the city an opportunity to take action, he said.
The Planning Commission’s next meeting, where it will hear public input on the draft of the Blue Sky Small Area Plan, is June 11.
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