Michigan Township's 'No' Didn't Stop $16 Billion AI Data Center
Saline Township, Michigan rejected a proposal to build a 21 million square-foot data center in September. The township board voted 4-1 against rezoning 575 acres of farmland for the project. Two days later, the developer sued.
By November, construction began. The settlement that allowed it cost the township nothing in legal fees but also left residents with limited recourse.
The Saline Township project-part of OpenAI and Oracle's Stargate AI infrastructure initiative-illustrates a widening gap between what local governments can do and what they can actually stop. As AI data centers proliferate across the country, rural communities are discovering that municipal zoning power, while theoretically absolute, often crumbles under legal and financial pressure from well-resourced developers.
How a lawsuit overturned a local vote
Related Digital, the developer, filed suit alleging "exclusionary zoning." Michigan law requires municipalities to have substantive reasons to deny land-use requests. Saying "we don't want it" is not enough.
The township's attorney advised that the municipality would likely lose if the case went to trial. Related Digital could also pursue approval through other channels-partnering with an institution like the nearby University of Michigan, which operates outside local zoning restrictions. A prolonged legal battle risked tens of thousands in tax assessments to defend against a company with a formidable legal team.
The township settled within weeks. In exchange for allowing construction, Related Digital committed roughly $14 million in community benefits-more than 10 times the township's annual budget, but a fraction of the project's $16 billion cost. The agreement included funding for farmland preservation, environmental limits on water use and noise, and restrictions on expansion.
Kelly Marion, the township clerk and sole board member who voted yes, said the decision came down to math. "They were pulling permits. They had this all prepared," she said of the developer's lawsuit filing two days after the board vote.
The deal was made before the township saw the proposal
The speed of approval obscured months of behind-the-scenes negotiations. Michigan Governor Gretchen Whitmer's office reached out to OpenAI in February 2025, weeks after the company announced the Stargate initiative. She wanted to discuss hosting a site in Michigan.
By spring, Related Digital had evaluated four potential Michigan locations with DTE Energy and construction firm Walbridge. Saline Township was selected partly for its access to power infrastructure and transmission lines with excess capacity to serve a data center.
By May, Related Digital had purchased the site from three local landowners-descendants of farmers who said they had no intention of farming again. The deal was done before the township formally received the rezoning proposal in late summer.
Whitmer's office said the governor welcomes such projects "as long as they're done in an environmentally responsible way." The statement did not address her office's role in recruiting OpenAI or the timing of negotiations relative to the Saline Township acquisition.
Residents have few tools left to fight
Kathryn Haushalter, a former U.S. Marine and mother of five living in a 200-year-old farmhouse across from the site, has pursued multiple legal challenges. In December, she attempted to insert herself into the lawsuit as a defendant, arguing that township officials approved the settlement without holding a proper public meeting as required under Michigan law.
A Washtenaw County judge rejected her motion in February, citing its late timing and the difficulty of undoing an agreement already in motion. Haushalter is planning an appeal.
She also filed an appeal with the township's zoning board, arguing that permits were issued improperly because the land remains zoned for agriculture. Under Michigan law, such an appeal can trigger an automatic stay on construction. Despite this, she said, residents have not been given a hearing and construction has continued.
Haushalter's concerns center on water management. Covering hundreds of acres with buildings and pavement changes how water moves through land. Rain that once filtered into soil will run off into surrounding areas, increasing flood risk. In an area relying on private wells with no municipal water system, residents worry that a data center drawing large amounts of groundwater could affect supply over time.
Related Digital disputes these concerns. A company spokesperson said the facility will use a closed-loop cooling system that does not consume large amounts of water. Ongoing water use will be comparable to a standard office building, the company said, and the project includes stormwater management improvements designed to better control runoff.
What comes next
Saline will not be the only Michigan AI data center. Anthropic is the intended end user of a proposed data center in Lyon Township, an hour northeast of Saline. Google is considering a one-gigawatt campus in Van Buren Township, near Detroit.
Washtenaw County, where Saline Township is located, approved a resolution this month supporting local municipalities considering temporary moratoriums on new data center development. The move came too late for Saline Township, where the project is already underway.
Residents are now focused on farmland preservation. The settlement includes roughly $4 million for conservation easements that could protect some 1,000 acres from future industrial development. Barry Lonik, a Michigan-based land preservation consultant, said that if enough landowners acted together, they could place legal restrictions on their property to prevent future data center projects.
But Lonik acknowledged that conservation easements, while they add hurdles for developers, cannot guarantee that more industry will not come. Zoning rules are temporary and can be changed by new administrations.
Joshua LeBaron, a resident opposing the project, said the opposition group's options have become very limited. "An AI stock market crash is probably the only thing that could stop it now," he said.
Haushalter continues to appeal her case while watching the facility rise. She said she has learned more about ordinances, state law, and zoning than she expected. "They can upend your whole community," she said of the rules that seemed boring until they mattered.
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