Michigan Township Approves $16 Billion AI Data Center

Saline Township, Michigan, rejected a proposal in September to rezone 575 acres of prime farmland for a 21-million-square-foot AI data center, the largest construction project in state history. The township board voted 4-1 against the plan, citing conflicts with agricultural zoning, the community's master plan, potential noise and environmental impacts, and near-universal opposition from residents who attended public meetings with "no data center" signs.

Two days after the denial, the developer Related Digital and the landowners sued the township, arguing that its lack of any industrially zoned land amounted to exclusionary zoning under Michigan law. The suit claimed a data center qualified as a necessary land use that could not be barred entirely.

Township officials, advised that prolonged litigation would be costly and unlikely to succeed, settled the case within weeks. The settlement allowed construction to begin in November. In exchange, the township received approximately $14 million in community benefits, more than 10 times its annual budget of roughly $1 million.

The package funds farmland preservation, local projects, fire departments, and imposes limits on water use, noise, expansion, and preserved agricultural land. The $16 billion project is part of OpenAI and Oracle’s Stargate AI infrastructure initiative.

Related Digital announced in April that it had secured financing. The facility is expected to require 1.4 gigawatts of electricity, an amount comparable to a nuclear power plant, supplied by DTE Energy.

Gretchen Whitmer has actively courted hyperscalers building data centers since late 2024. Her office contacted OpenAI in February 2025 shortly after President Trump’s inauguration and the announcement of the Stargate initiative. A virtual meeting later occurred between Whitmer and OpenAI CEO Sam Altman, along with representatives from DTE and Related Digital.

The Trump administration issued an executive order in July 2025 streamlining permitting for data center projects over 100 megawatts or $500 million. Big Tech hyperscalers are projected to invest $630 billion to $700 billion in AI-related infrastructure in 2026, with capital expenditures expected to reach $5.2 trillion by 2030.

Developers had identified at least 16 potential data center sites across 10 counties in Michigan’s Lower Peninsula. Related Digital evaluated four sites in the state with DTE Energy and Walbridge before selecting the Saline location, citing access to power and existing transmission lines with excess capacity.

A DTE Energy spokesperson confirmed the utility evaluated the site’s potential for electrical connection in spring 2025. Regulators and consumer advocates have raised concerns that special contracts between utilities and data center developers could shift costs to other ratepayers and strain the grid.

Residents of the agricultural community, known for red barns and dirt roads, picketed meetings and expressed fears about construction traffic, electricity demand, and environmental effects. Kathryn Haushalter, a 42-year-old former U.S. Marine living across from the site in a 200-year-old farmhouse, said she and her husband understand the scale of such projects from their construction backgrounds.

>"I feel like people don’t understand what’s coming. " — Kathryn Haushalter (Fortune Magazine) Barry Lonik, a Michigan land preservation consultant, noted that no other industrial project had previously targeted the area. He said rural townships with small boards and limited resources are vulnerable because data centers seek large contiguous acres and high-voltage transmission lines rarely available in urban zones.

Township attorney Fred Lucas said board members did not want the project and had not invited or encouraged it. After the lawsuit, officials concluded they were "between a rock and a hard place" with few good options. University of Michigan professor Sarah Mills, who studies land use planning, said state law strictly controls what local governments can achieve through zoning and that defending such suits is expensive for cash-strapped municipalities.

Haushalter attempted to intervene in the lawsuit as a defendant, arguing the township approved the settlement without a proper public meeting as required by state law. She and other residents also filed an appeal with the township zoning board contesting the issuance of permits.

One resident launched a recall effort against three township board members, citing insufficient resistance to the project. The landowners who sold the property to Related Digital stated in a letter to a local paper that they no longer intended to farm and might otherwise have sold the land for solar power or large-scale housing, neither of which would have required a zoning change.

Construction activity has included hundreds of trucks hauling dirt, with Haushalter reporting visible bright lights from her bedroom window before sunrise and hearing backup alarms throughout the day. The project highlights the broader challenge facing rural communities as the AI boom shifts from software to physical infrastructure.

Once projects of this scale gain momentum, backed by companies with substantial resources and political support, local governments often find their leverage constrained by zoning laws, financial risks, and legal realities.