How We Found Eight Data Center Community Benefit Agreements and Why It Matters
These days, data centers are the hot-button topic in policy circles everywhere. Between the explosion of AI and the sheer scale of some of these facilities, it seems like people cannot go a single day without hearing them come up in some capacity.
Communities weighing a data center project are considering real opportunities: construction jobs, new tax revenue, and the promise of economic development that comes with a major capital investment landing in town. But they are also considering real costs. Data centers bring elevated noise, especially for homes sitting close to a facility; they also can consume significant amounts of water and energy, affecting rates and the energy grid. And the tax breaks that some of the data centers receive could outweigh any financial benefits the community gets in return.
Local governments face a surmounting number of questions, with best practices not readily available. The policy decisions we make today will affect much of the work that comes tomorrow and the decades after that. Beginning in early 2026, FAS began interviewing experts in the field, as well as searching for executed agreements on data center developments that were difficult to find. This included tracking local government ordinances as well as finding Community Benefit Agreements (CBAs).
Many times, the negotiations between data center developers and officials from the municipality or county are conducted behind closed doors, protected by non-disclosure agreements (NDAs). As a result, community members have significantly fewer opportunities to influence the terms by which the data center should abide by as a fixture in the community.
In the spirit of increased transparency, FAS wants to share our experience of “flipping over rocks” and discovering the hard-to-find contract. This is how we discovered eight community benefit agreements and why it matters.
Local Policy Levers: The Ordinance and The Contract
Generally, local governments have two enforceable levers to create policies around data centers. First, an ordinance considers issues such as zoning, land use requirements, and other permitting features – ultimately providing a pathway to allowable activities (and specific limitations). The ordinance process includes a public comment period, and it applies to all projects that qualify under the definition of a “data center.”
A CBA involves the power of contract law, crafting and entering into binding bilateral (or sometimes multilateral) agreements that dictate the expectations of each party. CBAs are helpful in cases where existing zoning and permitting do not specifically identify “data centers” as a specific type of property to regulate (this is most frequent as the proliferation of data centers is so new). However, CBAs can be negotiated with fewer public comment opportunities, and they are required on a case-by-case basis.
CBAs are not a new legal concept, and they have been used for large scale projects before on major development projects, like airports or energy generation infrastructure. They very recently started to be used in the context of data centers, after the explosion in usage of AI. Thus, FAS went searching for every agreement that fit the CBA model.
As of the time of this writing, only one fully executed and publicly posted CBA exists that pertains to data centers: The Lancaster AI Hub agreement entered into by the City of Lancaster, Pennsylvania and the developers of two large data center campuses in the city. Lancaster’s CBA contains many terms and conditions that are beneficial to a data center agreement with the host community. It covers community transparency, water use, energy, noise restrictions, funding for public works, decommissioning, and many more. However, this agreement appears to leave much of the substance to be decided later on. Oftentimes, it requires the parties to submit separate plans to the city which detail the specifics of how the developers will conduct themselves.
Finding Agreements: Discovering CBAs
Finding executed CBAs took expertise, a concentrated effort, and follow-up. To expand beyond the Lancaster CBA, FAS first turned to blog posts that mentioned CBAs from sources like the Brookings Institution and Columbia University to see if there were any stories about localities that are negotiating terms with data center developers, or that have already done so. Initially, that is how FAS found Cedar Rapids, IA, St. Louis, MO, and El Paso, TX. Then, we looked for news articles referencing data center construction in these cities to see if they mentioned anything about an agreement between the city and the developers. If the terms of the agreement, or even discussion about its existence, were covered in these articles, that was where we knew we had to dig deeper.
While the majority of agreements found were publicly available, the only way to obtain some of them was through a public records request. Thankfully, most states did not have such broad prohibitions on what can be public record, allowing FAS to uncover more contracts to serve as references.
Over the summer of 2026, seven other agreements were uncovered besides the one in Lancaster between cities, counties, and data center developers that mention community benefits:
During the search for more agreements, FAS was making note of the trends in each one, and comparing trends among the different agreements. Many of these agreements contain a heavy focus on money and taxes. Tax abatements, exemptions, and Payment in Lieu of Taxes (PILOT) schemes served as incentives for the data centers to be built in various communities. In total, we found the following policy areas considered across multiple CBAs:
FAS’ Forthcoming Analysis + Next Steps
By putting a light on the language of multiple CBAs, we can start to understand what is commonplace, what sections need to be tailored to local needs, and where there is a need to consider more comprehensive policy requirements (e-waste, for example). In late Summer 2026, FAS will publish a report analyzing and comparing the various sections of each CBA. The report will also include a template CBA for the taking, and a summary of recent trends in local ordinances.
In the meantime, we hope that others will continue to look for these agreements, and apply pressure to private partners in providing them. How can we have an informed debate, when we don’t know what’s on the table?
If your community or local government has an executed CBA, please send it to metrolab@fas.org.
This will enable us to build best practices and inform communities nationwide on how local governments are crafting policies. Every community is different, and will therefore have different needs, underscoring the necessity for thoughtful decision making, not hasty and impulsive actions. It is also imperative to learn from these early agreements. Comparing them against each other allows us to understand early norms, “extreme” ranges, and expected outcomes from various projects. And by having these baseline terms, governments can enter into agreements with data centers with a clearer sense of what can be negotiated on a local level, what is reasonable to require, which policy areas need strengthening, and how to enforce these agreements over time.
Often negotiations between data center developers and local officials are conducted behind closed doors, protected by NDAs. How can we have an informed debate, when we don’t know what’s on the table?
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