Google is planting a massive new data center on the north edge of Pine Island, just outside Rochester, in a move that has local leaders buzzing about jobs and tax revenue while opponents gear up for a prolonged fight.
The company plans a roughly 250,000-square-foot facility on about 88 acres as part of Ryan Companies’ larger Project Skyway technology campus. The site would include a 35,000-square-foot office building. City officials say the development will mean hundreds of construction jobs and about 100 permanent positions, along with a high-profile corporate neighbor tied to a major clean-energy deal. It is already drawing pointed criticism from residents and environmental advocates who worry about the project’s scale and impacts. The agreement with Xcel Energy connects the data center to a large clean-power purchase Xcel says is structured so current customers do not see higher electric bills.
According to Star Tribune, what began as a 482-acre study area was narrowed to a roughly 88-acre initial site that will host a single data center and office in the first phase of Project Skyway. The outlet reports Google emerged as the tenant after months of behind-the-scenes planning, with Ryan Companies leading the push to market and prep the land for a so-called hyperscale user.
Xcel Energy says its electric-service agreement with Google includes a Clean Energy Accelerator Charge that would add 1,400 megawatts of wind power, 200 megawatts of solar and a 300-megawatt long-duration battery system. Google, not existing ratepayers, would pay the new-service costs so current Xcel customers "do not see increased rates," according to Xcel Energy. The utility describes the package as about 1,900 megawatts of new clean capacity in all and says the Electric Service Agreement will be filed with the Minnesota Public Utilities Commission for regulatory review.
What Project Skyway Would Include
Ryan Companies pitches Project Skyway as a multi-phase technology park that comes with significant infrastructure upgrades, all paid for by the developer. Plans call for more than $20 million in road and utility work, 18 to 18.5 acres dedicated to stormwater treatment and tens of millions of dollars in projected property-tax revenue to support schools and public services over time.
Industry coverage and planning documents indicate the full campus could eventually hold up to about 3 million square feet of development across multiple parcels. The initial Google build is pegged at roughly 250,000 square feet on about 88 acres, with green space and pollinator plantings included as part of efforts to soften the environmental footprint, according to Data Center Dynamics.
Local Reaction and Tax Breaks
The Pine Island City Council signed off in early February on a financial incentive package that would abate up to roughly $36.6 million in property taxes over as many as 28 years to support Project Skyway, as reported by Post Bulletin. Council documents show the deal is structured so the city would still collect an estimated $131 million in new property taxes over the life of the abatement, while the developer commits to contributions for city and school funds and to local infrastructure.
Not everyone is sold. The Minnesota Center for Environmental Advocacy filed an appeal in October 2025 targeting the city’s environmental review for Project Skyway, arguing it was inadequate. The group later asked the courts to pause permitting while the case plays out, according to Minnesota Center for Environmental Advocacy. The challenge has fed tense public meetings and sharpened opposition during town halls and planning sessions, and the project has already come under procedural scrutiny as it works through the permitting maze.
Legal Implications
Xcel says the Electric Service Agreement will go before the Minnesota Public Utilities Commission, giving regulators power to scrutinize the Clean Energy Accelerator Charge, consumer protections and grid upgrades before anything is locked in, according to Xcel Energy. If the Minnesota Center for Environmental Advocacy lawsuit succeeds, or if judges order a more extensive environmental review, the project could face new studies and delayed permits, which would in turn alter the timetable for lining up the wind, solar and long-duration storage envisioned in the utility agreement.
Ryan Companies and city officials say construction could start this year or in 2026. The developer and Google have also rolled out promises of local benefits, including a $25 million Panther Program for Pine Island schools and additional community funds, according to Post Bulletin. In the coming months, residents and officials will be watching closely to see whether the clean-energy guarantees, job commitments and community payments are enough to outweigh environmental worries and questions about day-to-day quality of life.
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