Developer of Lexington data center did not apply for permit to operate. Now they can’t
The company that bought a former Lexmark data center with hopes of increasing power capacity and serving artificial intelligence customers did not apply for the necessary approvals needed to operate before Lexington-Fayette Urban County Council put a moratorium on issuing them.
In an email, Department of Planning and Preservation Commissioner Keith Horn told the Herald-Leader that without a zoning compliance permit and certificate of occupancy, DartPoints cannot operate.
No applications have been filed, he said.
“They would also need a permit to do any remodeling,” Horn said. “As you know, the moratorium applies to all permits, approvals or authorizations.”
A spokesperson for DartPoints who works with a marketing firm specializing in data centers did not respond to multiple requests for comment in time for publication.
DartPoints is the data center provider and development company that bought a $29 million Lexmark property on New Circle Road in mid-May.
In an announcement sharing details of the property acquisition, the company said it would redevelop the existing data center site to support AI and believed it could scale power capacity to 70 megawatts, or the electricity equivalent of that needed to power around 70,000 homes at once.
One of two buildings at 745 W. New Circle Road is formerly IBM data center space. It already has cooling and power management equipment in place in addition to backup generators. There is a Kentucky Utilities sub station on site.
While the announcement of the property acquisition said “Lexington stood out for its combination of existing data center infrastructure, utility support, zoning readiness and room for expansion,” it was scant on details of what scaling the site might look like and how long it would take.
The Lexmark property is more than 345,000 square feet of space across nearly 30 acres and two buildings, one of which — approximately 81,600 square feet — was previously used as a data center. The other was partially leased to a variety of tenants, including a call center, logistics service business and financial planning office.
It has more than 600 surface parking spaces, according to a property listing that advertised the feature as land for future expansion.
“Lexington gives us a rare combination of existing infrastructure, a supportive power environment and the ability to scale in a meaningful way,” said DartPoints President and CEO Scott Willis in the announcement. “As AI, neo-cloud and hyperscale demand continue to reshape the market, customers need sites that can support larger power footprints, denser deployments and long-term growth. Lexington gives us that platform.”
Once the property sale became public June 3, Lexington residents shared in the days following on social media and in a neighborhood meeting their opposition to growth at the site.
Lexington Mayor Linda Gorton said she supported “tight controls” on data center development and District 1 Councilmember Tyler Morton said the site could be better utilized as affordable housing or something that creates more jobs.
At its June 9 meeting, Council approved two walk-on resolutions restricting data centers.
The first was a moratorium related to data centers in Fayette County that is in place until Oct. 31. The other initiated the process for a zoning ordinance text amendment which will guide future development of data centers, if any.
The moratorium applies to:
- Council’s acceptance and processing of applications for zone map amendments that seek to change zoning of any property in Lexington or in Fayette County when the application includes a preliminary development plan with a data center as the proposed use
- Council’s acceptance and review of development plans for data centers in any zone
- Council’s issuance of permits, approvals and authorizations to the operation of data centers in any zone
The moratorium, which is a temporary suspension of government activity, would give council the time it needs to examine and review regulations that fit “so that it may ensure the proper integration of these uses into the adopted land use and zoning scheme,” said District 5 Councilmember Liz Sheehan.
It will also give the Lexington Planning Commission time to draft a data center related zoning ordinance text amendment. The body decided at its last meeting to host a public hearing July 30 for the amendment and said it would take potential action at that meeting.
Sheehan — who sponsored resolutions putting the moratorium in place and initiating the amendment process — said the hope is that in the fall, some of the city’s existing code will finally consider data centers, including in sections that detail permitted use of space and other sections related to the requirements and procedures for approving development plans.
Prior to the DartPoints sale becoming public, council and the planning commission were already working on changing the city’s code to consider data centers as a separate issue and as part of the Blue Sky Small Area Plan.
The planning commission adopted a resolution last week amending the city’s comprehensive plan with a more up-to-date direction for how it should develop industrial land it added to its urban service boundary around Athens Boonesboro Road and Interstate 75.
The area, while already zoned industrial, does need additional clarity from the city’s rules in order to grow. A consultant who worked on the Blue Sky Small Area Plan, Caleb Racicot, said a zoning ordinance text amendment was in the draft stages.
The zoning code currently lacks what the amendment would define and put use standards on, especially in industrial districts. That includes for things like data centers, research and development centers, self storage, storage yards and for waste-related uses.
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