HERMANTOWN, Minn. (Minnesota Reformer) – Leaders in small Minnesota communities are helping big tech companies dot the state with gigantic computers used to power AI, often under the cloak of code names and nondisclosure agreements — which legal experts and residents say is damaging public trust.
City councilors, mayors and other elected officials across the state have been aware for months, even years, of various massive AI data center proposals, while sharing little to no information publicly until the projects are set in motion — often bound by secrecy agreements.
The City of Hermantown, muzzled by nondisclosure agreements, called a proposal “Project Loon” in early planning documents. If approved, the project would comprise over 200 acres of the wooded Duluth suburb with 1.8 million square feet worth of AI data processors.
Power and water consumption — and even the identity of the company that will use the campus — are still under wraps even as the project reaches the permitting stage.
Jane Kirtley, a professor of media law and ethics at the University of Minnesota, said the phenomenon of elected officials signing secrecy agreements isn’t entirely surprising: “Many of them are willing to sign their lives away in order to lure the businesses to their area.”
Still, Kirtley said, the non-disclosure agreements are “extremely problematic” because they compound the problem of opaque local government: “In smaller communities where there’s often less oversight, where fewer media are paying attention to it and fewer citizens participating, councils can get away with an awful lot of secrecy for a very long time without anybody complaining about it,” she said.
The jurisdictions cooperating with the tech behemoths say they’re in fierce competition with rival cities, counties and states and want to be able to negotiate privately, while the companies say they are guarding proprietary information and need the secrecy that an NDA guarantees.
The data centers provide jobs to construction workers who build and maintain them, and piles of property tax money for often cash-starved local governments.
Some elected officials have had enough, however, and are refusing to go along, while a state lawmaker wants to make these nondisclosure agreements illegal for elected officials.
When St. Louis County Commissioner Ashley Grimm heard her colleagues knew about the proposed Hermantown campus a full six months before the public, she said she was “shocked.”
Hermantown is in southern St. Louis County.
“To say that we would sign away our rights to talk to our constituents about that (data center project) is a total disservice to our office,” she said. Grimm scoffed at the idea that constituents had to file public records requests to get information.
Much of the available information related to the Hermantown proposal was made public recently through a Data Practices Act request — which is Minnesota’s version of a public records request and named after the state’s open records law — filed by Minnesota Center for Environmental Advocacy, or MCEA.
The records include hundreds of pages of correspondence between consultants, city staffers and local elected officials regarding “Project Loon,” some dating back more than a year.
Grimm said the secrecy surrounding Project Loon motivated her to propose a prohibition on commissioners signing nondisclosure agreements when big data center projects come to town.
Her proposal was quickly rejected during a heated commission meeting earlier this month.
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