The Southern Environmental Law Center is urging the Birmingham City Council to keep the special exception requirement for hyperscale data centers as it considers new regulations on the burgeoning industry.

After recently hearing testimony from dozens of concerned residents, the council voted unanimously to postpone a decision to early June, time enough for another round of deliberation before implementing the draft rules.

A major component of the proposed regulations would require hyperscalers that wish to develop in mixed-use development and light industrial zoned areas to go through a special exception process. As part of that process, law generally requires public hearings for zoning changes and variances, allowing public participation in the decision.

During the April 28 council meeting, Mayor Randall Woodfin and City Councilor Hunter Williams expressed opposition to this special exception requirement for hyperscale data centers, suggesting it was being ‘politicized.’

“I do think that, you know, there’s one thing that I think about the exception language,” Williams said. “I think that there’s ways that we can come to an agreement to do it where it’s nonpolitical, or we can have some other solutions.”

Woodfin said the special exception requirement “unintentionally politicizes” the process of gaining approval for data centers. “I think it can be seen as anti-growth,” the mayor said.

These comments have spurred worries among advocates such as Ryan Anderson, legal adviser for the SELC, who drafted an open letter to Williams urging the council to keep the special exception requirement in the proposed regulations.

“Data centers are an increasingly prominent part of our digital economy, and they can provide valuable benefits. But these facilities can also significantly impair residents’ quality of life, harm their health and severely harm the environment,” Anderson said.

“This provision is not ‘anti-growth;’ it is a key protection for residents and the city. Special uses are considered to have a potentially greater impact on neighboring properties or the public than uses permitted by right, so a public review process and a decision by a local governmental body is required before they may be built.”

Woodfin and Williams did not respond to requests for clarification on the special exception rules.

Rick Journey, director of communications for the mayor, said in a statement that staff are seeking administrative review over the special exception process.

“The intent is to strike the right balance,” Journey said, strong protections for residents and efficient permitting for developers.

Staffers are considering suggesting a requirement that developers provide direct notice to adjacent property owners.

“The discussion around the ‘special exception’ requirement is less about avoiding public input and more about ensuring a clear, consistent and predictable process,” Journey said. “While that process includes public hearings, it can also introduce uncertainty and extend timelines, even when a project already meets all established standards.”

Anderson contested Journey’s statement, saying, “Balance would be giving residents a seat at the table when the city makes impactful and important decisions about development in their neighborhoods.

“The possibility of extended timelines and uncertainty is a small sacrifice compared to the long-term impacts residents could face when a hyperscale data center comes to their neighborhood.”

The proposed shift from special exception to administrative review for data center development would eliminate a public process in favor of a governmental checklist, reducing residents’ ability to legally challenge projects by limiting their role to receiving notice, rather than participating in hearings.

As of this time, Journey indicated, no final decisions have been made about what rules would be resubmitted to the council. The new draft is expected to be released next week. Because the version the council considers must be publicly available for at least four weeks before a vote, the soonest the council could approve regulations would be in June.

Data centers have become a major conversation nationally as the industry expands to handle the growing AI sector. Locally, the BHM01 data center project in Oxmoor has for months drawn widespread consternation from a concerned public, as has the Project Marvel data center in Bessemer.

GBHS Lawsuits Argue City Undermined Special Exception Process

Lawyers for the Greater Birmingham Humane Society argues in court filings that the city has undermined the special exception process.

Despite intense public opposition and a failed vote on special exceptions, construction for BHM01 is underway. An April 9 memo from City Attorney Nicole King provided a crucial legal interpretation that allowed the project to move forward without obtaining special exceptions.

Now, GBHS, which has been developing a medical-model facility at 1052 Sydney Drive, the same corporate park as BHM01, is suing to reverse the memo and halt construction.

GBHS filed two appeals on April 24, the first arguing that BHM01 represents ‘incompatible adjacent development,’ according to language of the current zoning ordinance, and that the memo should be overturned.

The core legal controversy is whether a switching station and a substation planned for the BHM01 project, being developed by Nebius, qualify as ‘neighborhood facilities.’

What Nebius says it is doing does not align with what it actually is doing, the GBHS lawsuit contends.

“Nebius cannot hold itself out as a neighbor when doing so serves its interests and then, when the zoning ordinance imposes obligations, (claim) that it has no neighbors and is not part of the neighborhood,” it states.

The city attorney’s memo states that, because the substation and switching station are designed to serve only the Nebius project and not the surrounding residential area, they are not ‘neighborhood facilities’ but rather private industrial infrastructure. Moreover, Nebius must still comply with the zoning ordinance and demonstrate it will not damage the ‘value and integrity’ of neighboring properties.

For months, GBHS has submitted complaints to the city alleging risks posed by the BHM01 project.

The noise studies provided to the Zoning Board of Adjustment only cover Phase I of the project rather than the full buildout; the studies reportedly fail to cover all sound frequencies that can be heard by animals, which is a major concern for the animal care facility. Nebius has not provided the detailed data GBHS would need to conduct independent studies or reviews of potential impacts.

The first appeal also argues that the city violated proper procedure, undermined the authority of the ZBA and sidestepped a public forum.

GBHS argues that, under state law, the authority to hear appeals and grant special exceptions or variances is specifically vested in the Board of Zoning Adjustment, not in the city council or city attorney. According to state law, ZBA decisions can only be reversed through two channels, either by appeal by the same board or judicial review in a circuit court; a legal memorandum is not one of these conditions.

The second appeal alleges that the building permit creates a nonconforming use and requests that the ZBA temporarily suspend building permits for the switching station and substation or issue a stop-work order pending GBHS’ appeal to the city attorney.

The second appeal also alleges the city did not follow adequate procedures. Because the building permits were predicated on the memo that nullified the need for special exceptions, if the memo were overturned, the stations would constitute nonconforming use.

GBHS is arguing that the city violated the Technical Code of the City of Birmingham and its due process rights.

The Planning Department began reviewing the plan on April 9, the same date as King’s memo, and issued the building permit on April 15, before the appeal period in the memo expired on April 24. GBHS contends that to persevere its right to appeal, the city should not have allowed a permit conditioned on the memo during the time for appeal.

“The city attorney memo is the result of an obvious effort, by its own admission crafted by representatives of the Nebius Project, to benefit a single property owner unable to secure required special exceptions from the ZBA to supply electricity for a use strongly opposed by the Sand Ridge Neighborhood, the public at large, and harming GBHS as an adjacent landowner.”