Data center developer, local SC government skirted public input, residents suit says

A group of residents sued a data center developer and the Spartanburg County government Monday, alleging necessary public input and transparency measures were sidestepped while seeking permission to build.

The same organization of Upstate residents has also asked South Carolina’s utility regulators to evaluate whether the developer’s plan to power the data center with about 450 megawatts of its own natural gas meets state legal requirements.

Residents and local governments across South Carolina and the country have pushed back against rapid data center development, often citing concerns that the infrastructure needed to power AI and other digital services could use too much water, raise power bills or lead to noise pollution in rural communities.

The lawsuit alleges Valara Holdings, the developer, applied for two minor land development permits instead of a major land development permit typically required for projects like industrial parks, big-box retail stores or apartment buildings.

The two smaller permits allowed the data center project to evade public scrutiny, said Frank Holleman, a senior attorney with the Southern Environmental Law Center. Holleman is representing the Spartanburg County residents.

“Many people in Spartanburg feel they were not given full information, did not know what was happening until later in the process,” Holleman said in an interview.

Unlike smaller projects, a major land development in Spartanburg County requires a public panel to approve the permit, according to the local government’s ordinance. Four buildings in the development will near 500,000 square feet, according to a permit application description.

The first application, filed and approved in summer 2025, requested redevelopment of a former industrial plant on the site, including “interior demolition and remodeling of the current infrastructure” and “the addition of associated exterior equipment.”

The second pending application, submitted in April, includes four proposed buildings, a power yard, internal roadways, a site access road, electrical equipment houses and other updates, according to a permit description.

The plaintiff, Concerned Citizens of Spartanburg County, wants the data center to obtain a major land development permit, rather than two for a minor development.

Valara Holdings, Spartanburg County and Spartanburg County’s administrator are named as defendants in the lawsuit.

A spokesperson for Spartanburg County did not respond to a call and email requesting more information.

A message requesting more information sent to the email on NorthMark Strategies’ website was not returned. NorthMark Strategies is the parent company of Valara Holdings.

The company answered questions from the public and journalists about the Spartanburg data center last month. When asked why the scope of the data center wasn’t initially communicated, a speaker identified as just “Mike” said the company properly notified governmental agencies about the size of the project.

“Maybe the message didn’t get out properly,” he said. “I don’t know. Our initial submittal indicated such.”

The Spartanburg Herald-Journal identified the speaker as Mike Dobeck, vice president of real estate development with NorthMark.

Sarah Knox, director of external affairs for NorthMark, then said the company was trying to improve its communication with the public.

“Mike’s 100% right that it’s been communicated to some of the decision makers in the very beginning,” Knox said. “But part of the reason I’m here is to make sure that it gets communicated to you folks around town.”

The lawsuit names three property owners living near the data center who it alleges are harmed by the development. One is Mark Felk, who has lived in his home 1,500 feet away from the proposed site for more than three decades. If given the opportunity to give public input, Felk and other Spartanburg County residents would have participated, the lawsuit reads.

Felk hasn’t understood the full scope of the project due to how Valara attempted to permit the site, according to court filings.

“Not knowing this information causes Mr. Felk significant concern and takes away from his peace and solace,” the lawsuit reads.

The $2.8 billion development project is being built at 4000 Pine Street in Spartanburg County, with construction continuing through 2028, according to news releases. The project, announced in April 2025, will create 150 permanent on-site jobs, according to a May 2026 news release from NorthMark. But an April 2025 announcement from Gov. Henry McMaster said the development would create “at least 27 new jobs.”

Residents seek more scrutiny over natural gas

Concerned Citizens of Spartanburg County, represented by the Southern Environmental Law Center, also want the state’s utility regulators to scrutinize planned natural gas generators and turbines on the site.

NorthMark said in a news release it will generate power using natural gas on-site for its data center.

Alongside the data center, Valara Holdings also wants to operate 45 natural gas-fuel generators and 11 natural gas turbines, according to permit applications with the state Department of Environmental Services. The turbines will generate more than 400 megawatts of electricity, and the permanent generators will create about 50 megawatts.

The group of residents, alongside the Southern Alliance for Clean Energy, said the planned natural gas generators and turbines require approval from the Public Service Commission under state law.

The organizations asked the Public Service Commission to require Valara Holdings to obtain a certificate of environmental compatibility and public convenience and necessity from regulators before continuing construction.

Valara Holdings asked for separate air permits for its natural gas projects in applications to the state Department of Environmental Services in 2025 and 2026.

Valara Holdings initially only asked the state Department of Environmental Services for a permit for 24 generators in 2025, totalling about 50 megawatts of power. The permit was approved in September 2025, according to the state agency. The developer then amended its request this spring to operate 21 temporary generators.

Then, Valara Holdings filed an application for another permit to build natural gas turbines, generating about 400 megawatts of power, in March 2026.

The generators and turbines will emit pollutants, including particulate matter, carbon monoxide and nitrogen oxide, according to a state Department of Environmental Services fact sheet.